Former CEO of Village Voice: A World without Newspapers

28 02 2010

Feeling curmudgeonly today. I agree with every point David Schneiderman makes here, but I don’t like it one bit.

His conclusions prove that revolutions do not equal progress, and technological advances are separate from quality improvements.

In the case of the Internet spelling the death of newspapers, technology is accelerating the arrival of the lowest common denominator in news and information: tabloid-style “journalism” and opinion undifferentiated from news, delivered not by institutions with time-tested credibility but by news celebrities with personal brands who can gain prominence virtually overnight, particularly if they are edgy and sensational.

It’s a good read, though, and a useful primer on the information revolution.





Kinsley: Verbosity killing newspapers

7 01 2010

I was on my way out of newspapers when “context” was on its way in. Don’t just tell readers what happened, tell them what it means. The original movement surely intended journalists to show how events would affect the readers’ everyday lives. But few journalists understood their readers enough to interpret the impact on those lives, and they soon perverted the concept to report on the only impact they really cared about: politics.

Thus, the principal impacts of healthcare reform are not take-home pay for wage earners, security for people changing jobs, or assurance for those with a history of illness (the dreaded “pre-existing condition”). No, in journalists’ minds, the major impacts are the 2010 elections and the daily or hourly approval ratings of the president and the major parties.

But as Michael Kinsley notes in the Atlantic, this trend also brought about newspaper prose that is more tortuous, bloviated, and overstated. News via the Internet, which already has many reader advantages, is cleaner, pithier, and more inviting.

But providing “context,” as it was known, has become an invitation to hype. In this case, it’s the lowest form of hype—it’s horse-race hype—which actually diminishes a story rather than enhancing it. Surely if this event is such a big, big deal—“sweeping” and “defining” its way into our awareness—then its effect on the next election is one of the less important things about it.

Most grievous, in my opinion, is campaign coverage that, rather than informing the electorate about candidates’ positions, their feasibility and practical implications, consists almost entirely of who’s up and who’s down starting years from election day. All media are guilty of this, but newspapers cannot make the claim that they lack the space for such coverage. They are devoting thousands of words to political horse-race speculation rather than exposition of what it all really means for our lives.

And over the years, the public has responded with a massive “Who cares!”

Thus the only people still reading newspapers are political junkies, and because those readers are the ones closest to reporters’ and editors’ social circles, the newspaper people can’t understand their withering circulation.





Thomas Frank: Political diversity won’t save newspapers

16 12 2009

Thomas Frank, author of “What’s the Matter with Kansas” and the Wall Street Journal’s one liberal columnist, challenges the Washington Post’s notion that adding more conservatives would stave off the newspaper’s rapid demise. He makes the case that the two biggest journalistic failures of recent years can hardly be blamed for lack of conservative ideology in the newsroom.

Craziest of all, though, is the prospect of the Post ditching its decades-long pursuit of the grail of objectivity . . . because it got scooped on the Acorn story. If that is all it takes to reduce the Washington Post’s vaunted editorial philosophy to ashes, what is the newspaper industry planning to do to atone for its far more consequential failures?

Remember, this disastrous decade saw two of them: First, the news media’s failure to look critically at the Bush administration’s rationale for the Iraq War; and then, the business press’s failure to understand the depth of the subprime mortgage problem and to anticipate its massive consequences.

… The problem, in each of these massive failures, wasn’t really ideological at all. The people who got it right, in both cases, were the ones willing to hold power accountable, to directly challenge the conventional wisdom.

What the Post seems to be after is the opposite: A form of journalism that offends nobody, that comes crawling to the powerful, that mirrors the partisan breakdown of the population as a whole. If that’s the future of journalism, we can be certain that ever more catastrophic failures await.





Editor & Publisher magazine goes under

10 12 2009

Sad, sad news. After 125 years as a watchdog of the newspaper industry, E&P is closing shop. Over the last decade, it has been an excellent chronicler of the death spiral of journalism as we once knew it. It has encouraged the transition to the Internet and criticized newspapers’ stodgy approach to it.

Most notably, E&P held newspapers accountable for their role in the run-up to the Iraq War, parroting the administration line without examination.

In a bad sign, five years ago E&P switched from weekly to monthly publication. Its own death now signals a final lap around the drain for the traditional media.

UPDATE: The Columbia Journalism Review has an interview with E&P editor Greg Mitchell here.

“We made a lot of friends and a lot of enemies, I suppose, because we really were an independent voice, and often a very critical voice. I don’t think there are too many trade publications that were as independent and critical as we are, and we made some people angry because of that. We were calling for more Web focus way before it was fashionable; we were critical of many moves the industry was making and not making, covering the warts of the industry, trying to push them to make changes—and at the same time, standing up for the First Amendment, standing up for ethics, standing up for reporters’ rights.”





Study projects dramatic shift of ad spending to online sites

13 11 2009

In a study presented today at the Yale Law School Conference on the Future of Journalism, two leading analysts of media economics say there is a wide gap between the ratio of adults who get their content online and the amount of ad spending online, and that gap is about to close. The implication for legacy news providers is dire.

Today, U.S. advertisers spend 8 percent of budgets online, while Americans consumer 30 percent oftheir content online.

If history is any indication, a more appropriate re-allocation of advertising dollars will occur in the not-too-distant future, and daily print newspapers, with declining readership and household penetration, are mostly likely to be losers.

Over the next five years, the authors say, traditional news organization must take the following steps to survive:

  • Shed legacy costs as quickly as possible
  • Re-create community online — in an attempt to regain pricing leverage
  • Build new online advertising revenue streams to replace the loss of traditional print categories

The authors are Penelope Muse Abernathy, who holds the Knight Chair in Digital Media Economics and Journalism at the School of Journalism and Mass Communication at the University of North Carolina, and Richard Foster, a former McKinsey & Company executive who is a now senior faculty fellow at the School of Management at Yale.





Nicholas Lemann on the Journalism Crisis

29 10 2009

nicholaslemannphoto_p233_crop“Journalism isn’t going away,” says Nicholas Lemann, dean of Columbia University’s Graduate School of Journalism, in an interesting interview with Spiegel Online. “But it is reconstituting itself in a pretty fundamental way.”

You would expect some optimism from someone in Lemann’s position, and he doesn’t disappoint. Confronted with plunging circulation figures among major dailies, he says, “Newspapers may have found the bottom.”

“Metro newspapers in the United States are probably not going to disappear entirely. But they’ve almost all shrunk. That doesn’t mean they’ll go away or won’t continue to be the dominant news provider in their communities.”

Spiegel frequently alludes to the recent report by Columbia Professor Michael Schudsonand Leonard Downie Jr., the former executive editor of the Washington Post, “The Reconstruction of American Journalism.” But it returns, naturally enough, to questions about the Balloon Boy coverage and its implications for the future of journalism.

“This is something I found a little frustrating. If you have a pure market-based journalism system, then stories like Balloon Boy will inevitably rise to the top. [!] The reason is that there are pure market forces at work, and this is what people apparently want. So if you say on the one hand that public support for journalism is unthinkable and that journalism must live entirely in the market system, but then on the other hand you reject the results as worthless, that puts us in a bind.”





Counterpoint to death watch for newspapers

28 10 2009

Jonathan Knee of the Media Program at Columbia Business School opines in Barron’s that newspapers are doing just fine.

Until recently, many newspapers had profit margins exceeding 30%. By 2008, the industry’s average margin had fallen to the mid-teens. The speed and magnitude of this decline have resulted in wrenching changes in the way these historically stable businesses must operate.The continuing drama shouldn’t distract from real earnings power. Many newspapers still have almost double the profitability of other media sectors, such as movies, music and books — which have long struggled to achieve margins of even 10%.

Knee concedes that the Internet has hurt newspapers and that Web media deliver value that newspapers can’t match. But he notes that the downside to the Internet is information overload and says newspapers may or may not play a key role in guiding customers through the cacaphony. It depends on whether they join the race for solutions to finding and identifying credible, balanced, and researched content on the Web.

THE NEWSPAPER OF TOMORROW will indeed be very different in terms of how it is produced and delivered, what is in it, and how profitable it is. It will be part of a much more crowded and complex news and information ecosystem.

Operators must aggressively focus on cost and cooperation, designing truly distinctive offerings that leverage their advantages in this newly competitive landscape.

Policymakers currently have plenty of legitimate targets of their attention without worrying about the fate of newspapers or trying to keep change from happening. If they keep out of the way, news junkies in particular should anticipate an era of unprecedented plenty. And investors will be well-rewarded by backing managers who appreciate the continuing, if diminished, profit potential of this new environment.

 





Bailout for newspapers?

21 09 2009

President Obama has told editors of the Toledo Blade and Pittsburgh Post-Gazette  that he is “open” to tax breaks for newspapers that become non-profits.obama-interview

The president responded to questions about S. 673, the so-called “Newspaper Revitalization Act,” that would give outlets tax deals if they were to restructure as 501(c)(3) corporations. That bill, introduced by Sen. Ben Cardin (D-Md.),  has so far attracted one cosponsor, Cardin’s Maryland colleague Sen. Barbara Mikulski (D).

The argument, I suppose, is that news isn’t like another consumer product but is essential for a functioning democracy. No disagreement there. But as Michael Kinsley has noted, it raises the question of who gets subsidies. The New York Times? The Washington Times? You get the drift. Kinsley argues that government establishing news media would be like government establishing religion — unconstitutional.

But hasn’t the government established NPR and PBS, part of the content of which constitutes the best in broadcast journalism? Why should print be excluded from government support?

I admit I’m queasy about government involvement in news and the implications for freedom of the press and an independent media supporting an informed electorate. But no news is not good news for democracy. Subsidized news would be better than none, right?

UPDATE: I see that some on the Internet are interpreting Obama’s kind words for newspapers as a slam at blogs.

Mr. Obama said he noted the trend. “I am concerned that if the direction of the news is all blogosphere, all opinions, with no serious fact-checking, no serious attempts to put stories in context, that what you will end up getting is people shouting at each other across the void but not a lot of mutual understanding,” the President said.

Hey, if the shoe fits …

UPDATE2: Jack Shafer in Slate.com:

Saving Newspapers From Their Saviors: President Obama! Stiff-arm that “save the newspapers” legislation!

… The last thing newspapers need is the sort of help from the government that turns them into NPR, endlessly begging for contributions, pursuing wealthy philanthropists, and standing in line for government handouts. …

The best thing President Obama can do for the news business is nothing.





Consumers have never paid for news

16 08 2009

In his first of “Five Key Reasons Newspapers Are Failing,” Bill Wyman delivers a powerful argument against pay-for-content as a viable business model for newspapers: Newspapers don’t sell news; they sell readers.

The full article is a worthy treatise on the causes if not the solutions, and he admits as much at the outset:

After 30 years in the industry, I know enough to know I don’t know what it should be doing. But if we’re talking about the state of the industry, and we’re not acknowledging the issues below, we’re not fully looking at the roots of the problem.

Rats. I hate that. I have been putting faith in Walter Isaacson’s theories espoused in TIME early this year about micro-payments being the salvation of the industry. Here’s Wyman’s take on that:

It’s shocking that a fundamental lack of understanding of these aspects of the business has been the basis of some of the most high-profile writing about the state of the industry. Walter Isaacson was the managing editor of Time and the CEO of CNN; in a recent cover story for Time on the daily newspaper crisis, he based his argument on the following assertion:

“Newspapers and magazines traditionally have had three revenue sources: newsstand sales, subscriptions, and advertising. The new business model [i.e., web publishing] relies only on the last of these. That makes for a wobbly stool even when the one leg is strong. When it weakens, the stool is likely to fall.
Isaacson didn’t provide any figures. It didn’t occur to him or any of those high-paid Time editors who shepherded his essay into print that the money generated by newspaper subscriptions—$5 or $6 a week in most cities—could hardly be called a leg on a stool.”

Think about it for a moment, and you realize those paltry sums couldn’t come close to making up the cost of merely printing a newspaper and then delivering it by hand to a subscriber’s doorstep seven times during each of those weeks.

Nor can a company make money in 50-cent increments by sending union employees out in gas-guzzling trucks through gridlocked streets several times a day distributing to hundreds, even thousands, of newspaper boxes over scores, perhaps hundreds, of square miles.

That issue of Time was still on newsstands when the editor of The San Francisco Chronicle, which had been losing $1 million a week for years before the current recession hit, was telling his readers that it cost the company $10—10 dollars—to deliver a Sunday Chronicle to their homes.

He didn’t explain his math, but let’s give him the benefit of the doubt. And let’s say that the smaller average weekday paper costs less, maybe $6, to print and deliver. In other words, if we can trust his figures, it might cost the Chron at least $45 a week just to print and deliver a single subscriber’s paper. The paper is currently offering eight weeks’ delivery to new subscribers for just under $8 a week.

Back to Time magazine. Isaacson’s logic took him to this assertion:

“In an advertising-only revenue model, the incentive is perverse. It is also self-defeating, because eventually you will weaken your bond with your readers if you do not feel directly dependent upon them for your revenue. Newspapers will end up producing a lot of sections about gardening and home improvement, which advertisers want, and getting rid of their book review sections, as the Los Angeles Times and Washington Post have done.”

Isaacson, thinking he was offering an analysis of the current business situation of newspapers, was actually describing the previous one. Didn’t newspapers “end up producing” sections about gardening and home improvement decades ago? As for those book review sections, they were gone as well; the ones he mentioned were about the last two remaining of the 1400 daily papers in the U.S. In other words, that “bond with readers,” financially speaking, Isaacson talked about never existed.

It was sacrificed to Wall Street. Those book review sections were early roadkill in the companies’ drive to cut back content and prop up the industry’s comically high returns.

Of course, it’s always much safer to proclaim why things won’t work than to find something that will. Nevertheless, it’s a pretty deflating article, I found.

By the way, here are Wyman’s other four reasons newspapers are failing:

2. Newspapers are the product of monopolist thinking

3. Timidity doesn’t work on the web

4. The staffs of the papers, from management down to the reporters, deserve a big share of the blame

5. Newspaper websites suck

 





Moody’s: Newspapers should get out of printing and delivering

5 06 2009

Editor & Publisher reports that on Thursday, Moody’s Investors Service said newspapers’ credit ratings will continue to fall as long as they spend “far too much on producing and delivering a printed paper than on creating its content and selling the product.”

Moody’s calls it a “structural disconnect” with just 14% of cash operating costs, on average, devoted to content creation, while about 70% of costs are devoted to printing, distribution and corporate functions. The remaining 16% of costs are related to advertising sales — another example of devoting too few resources to the principal revenue driver.

Low credit ratings impact even the digital arms of newspapers, Moody’s noted.

“If newspapers can’t monetize the content in new digital channels at the same level as with print, or cut structural costs enough to keep up with the changing competitive environment, the prospect of additional recapitalizations or shutdowns will grow, adding further pressure to ratings,” he added.

So, newspapers need to get out of printing and delivery, meaning digital is all that’s left. And they need to find a way to pay for digital. This explains the industry’s sudden rush to paid content, including secret meetings.  Anti-trust alert!