Two compelling speakers made the case this afternoon at ILM West that newspaper companies can successfully transform into digital media businesses. One problem is that most newspaper companies are not willing to make the tough decisions necessary for this transition.

Making the case were two respected newspaper change agents, John Paton, CEO of Digital First, and Clark Gilbert, a Harvard Business School scholar who is now president and CEO of Deseret News, part of Deseret Media Companies.

“The newspaper model is irretrievably broken,” Paton said. “It cannot be fixed in its current state.”

Paton talked about some of the radical changes his company is making to transform newspapers into a digital, social and non-paternalistic medium that is adapted to the media it is distributing content through, channeling Marshall McLuhan’s famous “medium is the message” dictum. 

Paton cited how the company newspaper in Torrington, Connecticut, has changed its newsroom “ecology” into a center of community journalism, with an open newsroom where consumers can walk in and use blogging terminals and sit in on editorial meetings (which are webcast for those who can’t make it). All online stories include a fact checking box where users can question or correct veracity of reporting.

“News organizations are no longer gatekeepers,” Paton said.

Paton also announced that his company will launch Digital First Ventures early next year to invest in content and sales related start-ups.

Gilbert, whose scholarship is in disruptive technology, shared a number of directives for traditional media companies looking to make the transition.

His big point was that transformation requires two stages: The first is to repurpose the core business, which is largely about reducing the cost base to maximize its sustainability. And the second is to build a new, separate and disruptive business.

He acknowledges that this causes massive distruptions, with many people asked to leave and others with different skills brought in. The key is never to pursue transformation from the perspective of preserving the core business. It should always involve pursuing the massive new opportunity.

The new business must focus on differentiation and specialization.

“Average loses every time on the Internet,” he said. “Average can survive in print.”

People are key to successful transformation (it’s much more important than strategy), and being bold, authentic and committed to a digital strategy is key to attracting the best people.

“You can’t attract top talent if your pitch is, ‘Oh yeah, we do some digital stuff too.”

Finally, Gibert said channels are critical. At Deseret, they have four channels touching customers, and it’s critical that the channels built for new media are overtaking the traditional channel.

“The alternative channel becomes the core channel.”