Friday, July 1, 2011

Morning Brief: Dramatic shift in trial could put the focus back on the media; the newspaper vendor is disappearing

The New York Times today is reporting that the sexual assault case against Dominique Strauss-Kahn, who was the head of the IMF, and the presumed future head of the French Socialist Party, is "on the verge of collapse as investigators have uncovered major holes in the credibility of the housekeeper who charged that he attacked her in his Manhattan hotel suite in May."

The problem for prosecutors appears to be the credibility of the accuser, a Guinean woman who was working as a maid at the Sofitel hotel in NYC. According to media reports, the woman phone a friend who was in jail to ask for advice. Because the man was in jail the call was taped. It was also discovered that the woman has "unattributed money deposited in the bank accounts" in several states, according to the Christian Science Monitor.

While the news certainly may have political ramifications, in that Strauss-Kahn may be able to resurrect his career if charges are dropped, the case also will focus on the press's habit of jumping to judgment.

As for the politics of its all, that depends on one's perspective, but the NYT quotes Claude Bartolone, a Socialist legislator, as saying last night “I think Sarkozy and his friends are going to have a very unpleasant morning.”

The BBC wrote last night about the end of newspaper street vending in Wales, quoting The Guardian's Roy Greenslade as saying the move was "sad but inevitable in the circumstances".
"Distribution is one of the most expensive parts of the costs of producing newspapers," Greenslade said. "And it's natural enough in such circumstances that you drive down and reduce costs where you can."

True enough, but the old fashioned and unique methods some newspapers have used to distribute their newspapers are more than mere "distribution". By ending the practice of street vending, or boys on bikes delivering the newspaper, the industry has done more than simply cut costs, they have also done great damage to their marketing efforts.

I am reminded of the conversation that went on years ago when Apple started building retail outlets. At the time Apple could look at competitors like Gateway and see that retail outlets were not cost effective from a purely sales perspective. But Apple went forward anyway because they felt that the branded retail experience would prove to be of great importance to the brands, and a great place to introduce new products.

But the retail stores would all be shuttered today if Apple measured their effectiveness as Gateway did, or how the newspaper industry looks at its old distribution methods. For Apple, their retail stores are part of their marketing efforts, which is why they have cut down in marketing on some other areas like MacWorld. Apple doesn't measure the effectiveness of the stores solely in terms of a retail P&L.

Likewise, looking at street vendors simply from the circulation department's perspective misses the marketing advantages of being closer to their customers. If some of the cost of the distribution was shifted to marketing then maybe the conclusion changes. But, of course, that assumes the newspaper has much of a marketing budget in the first place – but we'll leave that discuss for another time.