As stories about further cutbacks and closures in the newspaper industry continue, so do discussions about what is wrong with the news industry, and what can be done to fix it. However, many of the discussions seem to be looking at the problem from the wrong end. Too many people are looking at trying to adjust the revenue stream to deal with online distribution, and too few people are talking about the product itself, the news.

The story of the demise of newspapers follows a familiar line. Something has come along to challenge the hegemony of the industry. For the newspapers, it is the Internet. Classifieds have moved to Craigslist. Subscribers are getting their news online. It reminds me an awful lot of the auto industry years ago. For them, it was Japan. Everyone was buying Japanese cars. They blamed the labor unions. They blamed heathcare costs and retirement costs. What no one was willing to talk about was the big issue, they stopped making a product that people cared about. Sounds a lot like the newspapers today.

Sure, they managed to buy some time making SUVs which people liked for a while, until gas prices went up again. Likewise, the news industry managed to buy sometime by providing entertainment in the guise of news, by focusing on personalities like O’Reilly or Olberman and not on information people needed.

When I spoke with one old newspaper man, he talked about the day when newspapers were run by local companies. They were part of the community and were something that people cared about. There was a high return on investment. So, the big investors came in and tried to run the papers. They tried to squeeze even more return out of the papers.

It was sort of like the story of the farmer and his goat. He figured that he could make more money off of his goat if he cut her food with sawdust. Slowly, he started replacing more and more of her food with sawdust. The goat’s milk production went down a little, but the farmer made up for the lost milk revenue with the savings he was getting on grain. Kept doing that until finally the goat starved to death.

That, I believe, is the real issue with both the car industry and the news industry. People have been busy saving money by delivering sawdust and calling it news. Now that the readers are leaving, people are wondering if maybe they can do something different to get readers again. The answer is simple, start producing news again.

Write about things that you care about and that your community cares about, and you’ll find readers. Until then, the discussions about revenue models are a bit like discussions of whether you try to milk your dying goat before or after you feed it more sawdust.