Lauren Rich Fine has a fairly unique perspective on
two industries which are in the midst of transformational change: news
and financial services. For nearly 20 years, she followed the
newspaper industry as a sell-side analyst at Merrill Lynch. When she
stepped down from that role two years ago, the subprime crisis was
still considered an isolated problem and private equity firms were
paying a premium for newspaper companies. What a difference 24
months makes.
More recently, Lauren has moved to the alternative media space, serving as Research Director for Content Next Media, publisher of PaidContent and related news blogs. Her latest report for Content Next is Playing a New Tune: The Music Industry’s D-I-Y Era. Fine also serves as Practitioner in Residence at Kent State University’s College of Communication and Information.
Content
Matters: The world of investment research has changed dramatically
since the Spitzer settlement. This has contributed to the emergence of
the independent analyst and the professional blogger. What do you see
ahead for investment research?
Lauren Rich Fine: I think
you will see more well known analysts hanging up their own shingle,
lilke Ivy Zelman and Meredith Whitney. I have chosen to do the part of
the job I really loved, which was forward looking industry research; I
was less interested in picking stocks so the position as Research
Director for ContentNext was perfect.
CM: In an interview
shortly after you left Merrill, you were asked what you might want to
do next. You suggested that you’d love to help Sam Zell with his then
just-acquired Tribune business. A lot has changed since then,
particularly the end of cheap credit. But, credit aside, what might you
have done to make Tribune a sustainable business?
LRF: I
would have made changes a lot faster. I would have communicated more
directly with my readers and explained the changing landscape for
newspapers. Online, I would have had the editors use quality Internet
content for nonlocal content, and even use it in print, and focus my dwindling resources on local news, particularly investigative reporting.
I would have really tried to energize my sales force, both for print
and online. There are many other things, but overall, experimenting and
moving more rapidly could have helped.
CM: Gordon Crovitz recently suggested users should pay for news with
micropayments. Newsday has announced plans to make their news available
only to paying subscribers, while US News is publishing a paid PDF
magazine. But the genie has been out of the bottle for ten years. Can
publishers (other than perhaps the FT and WSJ) really get consumers to
pay for news?
I
don’t think so. The WSJ is providing information that is required to do
a job, vs the average metropolitan papers which is read to be an
informed citizen. One produces a return on investment, and by the way,
is frequently paid for by an employer. The comparison to
iTunes is flawed as a purchase of a song can be heard over and over
again vs news which becomes stale very quickly.
CM:
We’ve seen a handful of blog acquisitions by traditional media in the
past year (including ContentNext, Ars Technical, etc), but not as many
as some of us anticipated. Why do you think that is and do you see that
changing as the ad market comes back?
LRF: It is hard to
maintain a site that is proprietary and dominant market share. The
barriers to entry are so low that when one does the build vs buy,
frequently, build wins out. It is getting harder to break through the
clutter and have a site with enough traffic to really attract
advertisers.
CM: While there’s a lot of gloom and doom
about, there are always bright spots. Weak economies bring
transformation and change. What are you optimistic about in 2009
(professionally or personally)?
LRF: Well, I for one am
happy to say goodbye to the era of excess and lack of accountability.
While I am deeply concerned about the rising unemployment rate, I don’t
mind that my five teenagers will really learn to work hard to get what
they want. Personally, I have an amazing family that I enjoy watching
mature and a few jobs (I am also a practitioner in residence at Kent
State University) that keep me fulfilled and bring me into contact with
smart, innovative people.
(Image source: farm3.static)
