Saving the newspaper industry is not the point
2009-02-23 by Roger Black
Saving the newspaper industry is not the point
Google has 81 million results for the search, "saving the newspaper industry," which may be part of the problem. (Favorite Google link: "Can French Teenagers Save the Newspaper Industry?")
Everyone has an idea of how to save the business, but the problem is that we are still thinking of it as an industry like automobiles or real estate development—all now whining for bailouts.
After all, tax authorities classify newspapers as manufacturers. News gathering at the big dailies only counts for about 10 percent of their costs; most of the money goes to paper, printing and distribution. So, if we cut out the industry part, wouldn't online readers still support newsrooms? Well, no. The way the Internet has developed, people have come to expect their news free of charge. Like broadcast TV. In the 100 years of the mass media—roughly the 20th Century before globalization and the simultaneous growth of cultural diversity in cities—the business model was overtaken by mass advertising. The formula was keep the CPMs low, and the ads would pay for everything. The bigger the circulation the better. So what if you didn't make any money on subscriptions?
The model dissolved even before the meltdown. Companies stopped spending so much of their budget on advertising. Media channels were breaking into a thousand verticals as the mass market itself disintegrated. (Maybe it was always a myth.) So now a big metro daily is like the Airbus that ran into a big flock of geese. The engines have lost all power.
The question is, where is the Hudson River?
Walter Isaacson, on the cover of Time, suggested that we could go to a system of micro-payments to pay for each story. Like iTunes, this might work, but it would favor page views the way web advertising and might tend to crowd out investigative reporting.
Better to go back to the idea of subscriptions for an entire web site, where subscribers a bit of continuity in the editorial budgeting. After taking over the Wall Street Journal, Rupert Murdoch considered making their site free, but abandoned the idea as advertising vanished and he realized they were bringing in real money, if not enough to pay for the newsroom.
David Swensen, the chief investment officer at Yale, and his colleague Michael Schmidt suggested in the Times that newspapers should be endowed, like colleges. During a big recession, this model may not work for the news any more than it is working for the ballet, but some news sites could attract underwriting. Cases in point: the Christian Science Monitor and The Washington Times (founded by the Rev. Moon). Whatever you think of the owners' religions, you could not say that either paper is beset by the kind of "political correctness" that has distracted private universities.
Bloggers often cite BBC as a model—with a mandatory license for anyone who has a set. After years of cuts, a typical PBS show limps in with a 1.4 Nielsen rating, compared to, say, 14 for an episode of "American Idol." So this doesn't have much chance of working, even if a bill could get through the U.S. Congress. Might was well ask for a bailout. Hell, nationalize them, like the banks!
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No, there has to be a free market model for news if the news is going to survive. The question is do people have to run out of news before we want to pay for it? The way we are going, we may find out soon. Michael Hirschorn, in The Atlantic, suggested archly that the New York Times could cease publication this May, as if that institution could do anything that quickly. David Berlow of the Font Bureau suggested a later date for the end of newspapers: 2014. (This was at a Poynter Insititute conference in 1989!)
Whenever it comes, we know the end of the newspaper model is near. . . . but not the news. The recent uptick in news audiences during the election and the meltdown may suggests that Americans might value the press, even if the price is not "free." In India and other places where the quality of life is a lot less certain, people are starting new newspapers and news sites, and creating a truly free press.
As life gets more uncertain here, the news gets more important. But it still won't be easy to convince people to pay for subscriptions. We need a breakthough, and I don't think it's Amazon's Kindle or news tablet, although if you combined iPhone apps like Bloomberg with "Classics" you get the idea.
We have to look at the content of the news, and think of the business as a service, not an industry. To use again Gordon Bethune's famous quote, "You can take so much cheese off the pizza nobody will eat it." He was right about his own industry, airlines. The same happened in Detroit, and no bailout will fix a Dodge that can't compete with a Toyota.
Newspapers have been removing the dough as well as the protein. Plus, they've been cooking up web sites that look confusing or generic—or both. Google's links take you to landing pages that all look alike. No wonder people don't stay on the sites.
What we need is great content that you can kick back and enjoy. Let's go back to the basic advantage of the printed form of journalism: stories. Web sites, driven by hyperlinks, excel at providing a rich cloud of data points and news items—but the story is in the user's mind, not the producer's. If we put a richer narrative media object on newspaper web sites, that might be get people to subscribe. It would have to be fresh, interactive and flexible.
As it happens, Danilo Black USA has designed just such an object. Check out Flyp. It's still in beta, still a bit too much of a weekly newsmagazine but they're working to bring in more updates, more frequent posts and comments and to build a community. The kernel of the future of online news media may well be here.
Now let's see what happens when they start charging for subscriptions.
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Idle question: What happened to all that money the publishers made during the 50-year boom? Didn't they save any of it?
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