A prescriptive look at the news business

The clip above came to mind while scrolling through comments on Dean Starkman’s CJR piece, Confidence Game: The limited vision of the news gurus.

As Starkman points out, there’s two camps in the game of predicting where the news game is going and how it will survive.  There’s the Future of News Crowd, a group of academics and business elite who proclaim everything is changing, the world is falling apart and the old models will not work in the fully digital future.  The other camp is the Journalism for Democracy gang (Starkman’s phrase).  This is the group that us digital types have often dismissed as “printies,” dinosaurs who decry the changes in media markets and demand, “somebody must pay.”

I believe in, more than ever, the middle ground.

There will be no radical shift in the news business (though, I myself, fretted about it in my newspaper company executive days).  There is an evolution going on, not revolution.  Newspapers may die (and maybe they won’t), but the news business, and journalism, will survive.

The main thing both the FON and JFD groups miss is a sense of history, hence the Bogart clip.

Since early in the 19th Century, the news business has been constantly evolving, and each step of the way, there has been somebody to mourn the passing of an era, from the six-penny publishers losing out to the penny newspapers, from the muckrakers being superseded by the professional journalists, and then you had the advent of radio and TV and the death of evening newspapers, and finally, the digital age.

Each step of the way, the old school reacted with fear and loathing.

But somehow, each step of the way, new and better forms of journalism emerged.

Some of the greatest work in newspaper history came after broadcasters began competing for listener and viewer attention and local advertising dollars.

If you study the charts on newspaper readership and circulation declines, newspapers have suffered more from the changing demographics of America and changes in their own business structure than the rise of new technology.

Newspapers have been hurt by three things:

  • World Wars.  Both the first and second big wars caused great migrations around the country, mostly toward the west, as workers went to factories to find wartime jobs and military personnel found new ports of call on the coasts.  This created a less rooted society, which hurt local newspapers as people felt less connected to their communities, and therefore less interested in what the local daily or weekly had to offer.
  • Professionalization.  The rise of journalism schools and the sense that all reporters and editors needed to be “professional journalists” turned newspapers away from being interwoven in the fabric of their communities toward disconnected observers that need not be troubled with the consequences of what is covered, or not; and, more so, gave a sense of entitlement to reporters that they need not bother with the trifles of community life.
  • Chains and IPOs. Once a newspaper (or radio or television station) becomes part of a chain, it’s profits are no longer its own.  A certain layer of revenue gets sent back to corporate HQ to cover corporate expenses (corporate HQs are by definition incapable of generating revenue to support their own operations) and the local profits must be shared with corporate overlords. This means money that once stayed in the community to reinvest in journalism is now ripped away from the place where it could do most good for the health of the community and the news organization.  The introduction of publicly traded newspaper companies in the 1970s brought a whole next level of evil in the chain ownership structure.  With shareholders to please, insane profit margins needed to be maintained.  The news business — and it is a business — is not of sufficient structure to make rapid enough change or introduce new quickly commoditized products (the way a traditional manufacturer can) to maintain those profit margins.  The best newspapers can do are invest in themselves to improve and maintain quality.  In the publicly traded world, that’s not possible.

The news business was in decline before the Web came along.  Like the proverbial frog in hot water, nobody noticed how these structural changes to the news business were leading to irreversible long-term declines.  In fact, it looked like things such as chain structure (so bean counters could create “efficiencies of scale”) and a more professional work force (which also made reporters more like factory workers, more interchangeable), were in some ways beneficial (professional reporting is better, after all, than gossip mongering).

If my thesis is true — and obviously, I believe that it is — then digital represents more of an opportunity than a threat.

And the opportunity lies with those businesses that are addressing the structural flaws in the American media landscape.

  1. Local ownership.  Only local owners can address two of root causes of the news business decline. First is a connection to the community and a commitment to the community. Second is that revenue is not frittered away on support of a wasteful corporate infrastructure.  So called “scale” has no place in the news business. Local news operations by their most eloquent definition can’t scale.  Regionalism is one thing, national scale is a pipe dream.
  2. Start ups.  A start up doesn’t have the baggage that goes with legacy.  A start up can come out as a pure digital play and build a business around realistic cost and revenue projections. Digital is a different medium from paper or air. It calls for a different approach to news and business. The start up owner has the flexibility to experiment and fashion a structure that better fits the environment.
  3. Reinvent journalism. The independent editor has the freedom to change the rules of the game, re-evaluate all of the sacred cows that have been erected in the high church of journalism and decide what makes sense and what doesn’t.  The reinvented journalist can once again be a booster for his or her community, can care about the health of the local business community, can more effectively point out the rights and the wrongs in the civic sphere, and can engage his or her community in ways that are meaningful and hopefully attract more people into a new engagement with the very places they live and work.

There’s a lot of talk in the pundit class about the “sustainability” of local online journalism.  To me, it’s a ridiculous topic to theorize about.  Of course, local online journalism will be sustainable.  Each stage of journalism, from the penny press to the arrival of television, local journalism has remained sustainable.  Those who navel gaze lack a sense of history.

Think back to the original penny press publishers — they had no concept of professional journalism and certainly couldn’t imagine paying for it with classified ads, especially with big profitable verticals in jobs, cars and real estate, nor could they imagine full page spreads from department stores, nor did they think much about special sections and Sunday morning inserts — all of the things that went into making modern newspapers powerhouses of revenue and investigative, watchdog journalism were not invented for decades after the penny press was born.

We don’t know how online journalism will evolve, but it will evolve.  It will find ways to make more and more money to pay for more and more journalism.  The audience is there for it, local businesses will always want to connect with that audience, and entrepreneurial minded people will find ways to put the pieces together.

Recommended reading (books that influenced the thinking behind this post)

11 thoughts on “A prescriptive look at the news business

  1. Howard–well said. I agree that the demand for journalism is strong despite all of the gloom and doom about our profession. one of the best examples of this is in local government. in my community, lake forest, il, the city council meetings are shown live on a local cable channel and they air in rerun on tv and on the city’s website, and in dvds at the library. you might think: who needs a reporter to cover a council meeting anymore when there are so many avenues for people to watch the meetings? but they don’t want to watch a two- (sometimes three- or four-) hour city council meeting. they want a trusted reporter to report what happened. they don’t want the reporters’ opinion about what happened so much as they just want to know what happened. This is a real opportunity for professional journalism: present the information in an unbiased manner, and let the readers drive the opinion through the comments and forums.

  2. Amen; especially on those two sets of three points. Forty years in the biz; never doubted this evolution and am delighted by the possibilities of the future of gathering, sorting, delivering and connecting news, information and advertising.

    Would add: Evolution of the biz is a lot longer than 19th century. News distribution has evolved continuously since at least the day the first cave dude (or …ette) picked up a stick and drew the day’s hunting and gathering on a cave wall. Proving, too, that the visual arts folks preceded the text folks by a few days, for sure…. Imagine how upset they were when things moved to papyrus… :-)

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  5. I love your long-term perspective. Regarding shareholders, unfortunately, U.S. companies had to ratchet up profitability to get attention and that has turned into the Achilles Heel. INMA just posted some data on historic profitability that might be of interest. In 2011, U.S. publicly traded newspapers have generated 14.9% EBITDA margin – compared with 28.5% in 1999. Context for this here: http://bit.ly/sD4Ri6.

  6. Howard –

    Strong piece in general, and I think you’re right about what has both hurt and could help.

    Here’s the thing I’m thinking about lately: what does *print* (as in the physical medium) do that can’t be well replaced by ‘newspaper by interweb.’

    Print newspapers still have the edge in portability, which I think is more important than the old ‘I can read it in the head’ meme, although tablets change that.

    Print newspapers are still a good browsing experience, maybe marginally better than the web, in that I’m still more likely to see the thing I didn’t know I was interested in. (That said, I find Twitter, of all things, is great at pointing me in loosely directed ways, toward stuff I didn’t know I care about.)

    Print newspapers can still give some of the pleasure associated with tactile experience. Lots of big words, I know, but a well designed paper can be a thing of beauty. I think about publishers, who are now trying to up their game on the physical book front by making them more beautiful. I’d like a little beauty in my life, delivered to my door every morning. That, I’d pay for.

    In keeping with that, (and professionals, please correct me where I’m wrong) it seems to me that papers can still by ‘higher resolution’ than the web, both literally and figuratively (though they have none of the advantages of moving graphics).

    The web can revise, correct, add and subtract. I want the paper to give me a ‘take’ on the subject. I want to hear the reporter’s voice. That’s the higher resolution, figurative part.

    I want big photos, in context. (Maybe from film?) Photos inherently don’t move. They are the art of choice on pages that don’t move, that don’t update.

    Unfortunately, most papers are unavoidably stuck at this point just trying to fill space. I want stories, stuff that tickles me, something between the NY Daily News during its good years, the Wall Street Journal front pagers of old, a little Sports Illustrated for seasoning.

    I want it better done, and less professional. You’re right to pinpoint professionalism as an issue: it’s helped hollow out the DIY essence of this work, made it simultaneously boring and distant.

    I want it to be high and low, instead of the all middle we’ve gotten for too long.


    Scott Atkinson

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  8. Sorry about the dp, but the thread is quiet, so I suppose no one will much mind.

    I got a partial answer about what a newspaper can be. Two years after its street date, I finally saw McSweeney’s glorious one-off, the ‘San Fransisco Panorama.’

    Somebody on the interwebs called it part-newspaper and part tribute to newspapers, and I think that’s just about right. For anyone who doesn’t know about the ‘Panorama,’ it was a 2009 experiment by McSweeney’s to see what you could do that is unique to the form of a newspaper. The economics don’t work, the pitch of the thing is too up-scale, but…

    It’s great in a whole lot of ways. I’d gladly plunk down $5 or $6 every weekend for one.

    If you have a chance, Google it for a flavor of what it was. And by all means, if you ever see a copy, read it.

    Scott A.

  9. More to your original point, I think newspapers have lost all of their advantages, especially with the arrival of the iPad. I’m old enough to have been an avid newspaper reader, but I don’t much miss not reading them now.

    A tablet gives digital news reading all of the portability and convenience of printed news, and the web, if done right, allows an immediacy and delivers a conviviality not possible with print, while retaining the pleasures of reading, even in long form.

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