Lost amongst the angst and anger over the bankruptcies running through the news business like a cold through a kindergarten is the wisdom that a few smart voices have offered, and continue to offer, this industry. Not everyone was caught asleep by what has happened over the past few years. If the people running the nation’s newspaper companies had listened to those voices before, more newsrooms would be thriving now. If they would listen now, perhaps more newsrooms could be saved.
Here are four essential articles from the past two weeks that anyone concerned about the future of news should read. They do not speak with unanimity, but do provide a sample of the voices that ought to be leading any discussion about the future of journalism online.
Another day, another Van Winkle, Feb. 28
Everything I’ve learned since 1994 leads me to believe that business approaches built around an assumption of scarcity will not work in an economy of surplus. And imagining that newspapers have some sort of defensible monopoly on the consumer value they provide is delusional.
Yelvington destroys the argument made by the L.A. Times’ David Lazarus, among many others, that iTunes provides a compelling model for charging consumers for news stories.
Business Models of News, Feb. 23
In essence to secure the advertising for the print edition, they have in the past completely undermined the business they need to survive in the future. They have told every one of their advertisers that online adverts are not worth paying for.
The problem, Robinson writes, is not that early online newspapers gave away the content. The problem is that they gave away the ads. Now, newspaper companies, as well as their online start-up competition, are paying the price, earning less than they would for online journalism had the newspapers not “sold out” the Web in its early days.
Earl J. Wilkinson
No Iceberg: Separating Truth from Fiction About Newspapers In This Recession, Feb. 25
I’ve heard that one of the Tribune Company’s leading newspapers may have made a US$100 million profit in an otherwise horrible 2008 due to cost containment and targeting its opportunities. But put that in the context of the US$13 billion debt the Tribune Company has amassed and must service!
You can throw off impressive profits, but the way newspaper companies structured their debt to acquire other newspapers assumed they could lift 20 percent margins to 30 percent and more. Little thought was given to the idea that margins could drop from 20 percent to 10 percent or less.
That is turning into a Shakespearean miscalculation.
Wilkinson contrasts U.S. newspapers with those in Europe to portray American papers as behemoths that have borrowed too much to spend too much, focusing on their own products rather than making valuable connections with their audiences. But failure is not inevitable. Wilkinson offers broad models that he believes can help U.S. newsrooms survive this downturn.
I’m no economist, but I think the problem comes down to this: The Internet is a single, efficient market governed by the laws of supply and demand. Because there’s surplus ad inventory online — particularly low-grade inventory — prices are falling. But what if the surplus inventory is largely the result of a glut of duplicative content? Would the problem go away if news organizations simply stopped doing about half of what they do and focused on the stuff nobody else is producing?
Ulken brought it all together for us last week, offering the apparently-not-so-simple solution that should provide hope for any news publisher: If you want to have content that has value, create valuable content… and quit wasting your money and staff time creating everything else.
This is not a crisis of journalism. It is a crisis of management. Rather than hoping newsrooms burdened by corporate debt can escape bankruptcy, perhaps we should root instead for them to liquidate (and not simply to restructure) as swiftly as legally possible. Perhaps then, individual newsrooms can pass from the hands of the managers who got us into this mess into new ownership that might better respect and value its relationships with readers and advertisers.
Those who managed us into this mess have had their chance. Rather than moan about how our communities should change to save our businesses, we need new leadership that will change our businesses to help save our communities. It’s time for new voices to run journalism. If the corporate boards that oversee the industry do not identify those voices, their competitors – from online start-ups, non-profits or even partisan media – soon will.