Answering questions for a friend
One of the first interviews I did on State of the Media was with my old friend, Marty Weybret, publisher of the Lodi News Sentinel (which is one of the oldest family-owned daily newspapers left in America). At the time, the LNS was still doing well but Marty saw the handwriting on the wall. I've been pushing my friend to get more involved with social media and he finally got onto Facebook and is getting pretty active. He wrote a note with 10 questions on the future on journalism and asked for my input. I'm putting it up on his notes, but I thought it would be good for fodder here as well.
Does "free on the Internet" mean news now has no economic value?
The only reason free content is on the internet is because the people placing it there have not assigned value to it. Case in point is the Wall Street Journal. They still charge a subscription to see much of their content. They got a lot of flack at the beginning of Web 2.0 for doing that, but they are still standing and doing well relative to everyone else. The journalism industry has made it's own bed by not charging something for their online content and some are beginning to wake up. Even EE Times is planning on launching some level of payment for their content. In some cases it is as simple as detailed information on the reader that can be resold as marketing data to other organizations. It will be a painful transition for some people, but content can no longer be free. Someone has to pay and it is up the the journalism world to figure out what that price is.
Does the symbiosis between advertising and news mean it never had the value
most journalists assumed it had?
Does the symbiosis between advertising and news mean it never had the value
most journalists assumed it had?
The problem with advertising is that the journalism world have been telling advertising people that advertising increases sales. It doesn't and never has. The discussion of issues and concerns is what drives sales and advertising provides a suggestion about how to deal with them. Advertising only validates a decision to buy or having bought so it minimizes buyer remorse and encourages continued patronage. That is the byproduct of advertising. The PURPOSE of advertising is to fund the discussion. Journalism screwed up the relationship between ads and content and they are going to have to fix it by re-establishing a the value proposition.
Will user generated content replace a great deal of journalism?
Already has. Take a look at most trade journals and at least 50 percent is vendor-generated. Techonline is pretty much all user generated. And that's why most people are turning to social media because user/vendor-generated content is little more than marketing crap. It had it's place as a counterpoint to objective coverage, but as it continues, people are losing trust in media. Social media is becoming a replacement but only as far as it is a trusted source. But social media will die if it doesn't find a revenue source that at least covers its cost.
Will the "mainstream media," fade away or do they stand a chance of transforming themselves and becoming valuable again?
Yes, but it has to recognize the true value and purpose of the revenue stream and not set unrealistic expectations.
Given that people are paying more and more for entertainment & communication (cable TV, cell phones, online & video games, Internet connections, etc.) and less for journalism, can journalism change to the point it earns substantial revenue and still be journalism?
Given that people are paying more and more for entertainment & communication (cable TV, cell phones, online & video games, Internet connections, etc.) and less for journalism, can journalism change to the point it earns substantial revenue and still be journalism?
When Facebook, Technorati, Twitter and all these other collapse financially, there will be an enormous vacuum that will need to be filled. The weakness of socially driven media is already becoming apparent as people take civil action against social media organizations, so they will have to clean up their act. But the most important lesson to learn is that the old way of earning revenue is not going to come back. The content itself has to be directly sponsored and become the reason people contact businesses for goods and services.
Why is Internet advertising cheaper than print advertising — does it work less well or is abundance driving the price down?
It's cheaper because the journalism industry priced it cheaper. The industry thought, "Gee we don't need paper or printing presses or layout teams. Let's price it at 10 cents on the dollar and tell the advertisers the same thing: that it will drive sales." But they didn't consider server costs, or computer science gurus in the cost, and they didn't know that people could more easily ignore ads on the screen than they could on paper. Online advertising is not a bad thing, but like traditional advertising, it doesn't perform as advertised.
Is the audience for TV news declining as rapidly as newspaper circulation? If not, is the bigger audience due more to the fact that TV news is free or due to its user-friendly video-audio form?
The audience isn't declining. The availability of fee content online is driving up audiences. More people are consuming news than ever before. They just don't have to pay for it. Most of the print pubs I work with are cutting print runs not because people aren't reading, but because they can't afford to print as many copies.
Newspaper circulation is declining for many reasons — free news on the 'Net, increasing immigration from countries with poor public education, anger at the bias and ethical failings of journalism, a lack of drama and a wishy-washy focus of most news writing, America's "video generation" finds papers less user-friendly, more people are "bowling alone" & commuting more so they are less involved in community affairs. There are probably other reasons as well. In what order would you rank these causes for the decline of circulation and why?
1. Declining advertising revenue is causing cutbacks in the quality of content which causes people to not want to read certain publications.
2. Poor reading skills make podcasting a better vehicle.
3. Poor education in history and civics make news incomprehensible
Can democracy survive a contraction of the mainstream media and an expansion of politician's Web sites and amateur blogging? Can the people influence big government armed with limited journalism?
What we call journalism today has only existed for about 50-70 years. What came before it was anything but unbiased. Andrew Jackson, for example, oversaw the operations of the Washington Globe established to promote his administrations policies to the people. What we see in social media today is not unlike what media once was. I'd like to point out that democracy was in place in many cultures long before there was a print media. What our society looks like in 20 years may be completely different than what it is now, but whether democracy survives is not based on what our media looks like. Democracy drives what media looks like and it is the peoples' decision on whether they want it.
That was an impressive core dump, Lou, but a couple of points:
ReplyDeleteAs the number of news sources has exploded, the value of each source is diluted; it's like issuing more stock, even if much of it is junk grade. When the only source of news was the local paper, people read it religiously. Now I barely look at the local Austin paper because by the time it's delivered I've read everything relevant online in the NY Times, WaPo and the Economist(not to mention the HuffPost, Politico and TPM). I'm not willing to pay for any of these because there are always multiple sources for the same story--unless it's some well-researched investigative piece in the WSJ, but that doesn't happen often enough to make me cough up a hundred bucks to read their screed for a year.
As for tech journalism, I think the future is in staking out your niche and becoming a guru in order to rise above the noise level. I agree with your assumption that content is king, but monetizing it is tricky. I also agree that publishers shot themselves in the foot by figuring online delivery was cheap, so let's start off pricing it low--in contast to the marketing rule in every other realm: start off high because your product or channel is unique (skimming the cream), because it will inevitably become a commodity later. That was stupid, but there's no going back.
It may be worth trying to revive print by reversing the way content is usually delivered. Instead of duplicating magazine content online--which is more timely and undermines the reason for reading the magazine--let's put short versions of stories online for the time- and attention-challenged and longer versions in print. This is the opposite of the current practice and would add value to print publications.
I like your suggestion about sponsoring individual content: "John's column today is brought to you by Wacky Widgets." Not overly classy, but not overly annoying either; it's the online counterpart to placing an ad next to a particular magazine section. You've got to have the credentials to be able to get backing, but this is a viable if dollars-for-dimes supplement to advertising.
"The purpose of advertising is to fund the discussion." Now THERE's an editor's point of view. The purpose of advertising is to sell--either the company ('image advertising') or products; it's all about demand creation. Most of the ads in tech trades (EDN, ED, PD) are prettied-up data sheets, showing engineers how the latest power regulator will make your next handset design a winner. You need to let people know about your product before they can buy it, then create some demand for it. If you advertise in a particular channel and it seems to work, you keep it up; if not, not. If your ads happen to keep the magazine alive, so much the better--but as a vendor that's not even a consideration.
Advertising is a push technology; Google isn't enough, especially when you've got a long design cycle and you need to get the engineer's attention--plant the seed--before the need for your product hits the critical path. Then it IS time for Google and your ads are no longer relevant.
-John Donovan
Excellent point, John. But here's something else to think about: Are you going to pick up a local paper when the NY Times, WaPo and Economist ALL start charging for information; when HuffPo, Politico and TPM are bankrupt; and when the only news you can get are news releases on Google?
ReplyDeleteThe free stuff has to be monetized and none of the of the new media sites are pulling profits, just sucking down VC money.
I certainly agree about the need to monetize online content, but I also think that newspapers are toast. The mighty NYT recently took a $250M loan from Carlos Slim--at 14% interest, more than I pay on my credit cards!--all of which is going to help pay down the $1.1B in debt they already have. There isn't a major newspaper in the U.S. that isn't teetering on the verge of bankruptcy. I think the current recession is going to force them over the edge. What will replace them remains to be seen.
ReplyDeleteOTOH I think the HuffPost is the future of newspaper journalism. Ariana's expanded way beyond the left wing political blog she started to include sports, entertainment, business, lifestyle and other sections; they're even rolling out city-specific editions. She also sells a lot of online ads, which--considering that almost all of the content is either aggregated or contributed for free--pays the bills for her small staff. While it's a private company, according to Forbes the HuffPost is making good money and even thinking of going public.
While it wouldn't be easy to replicate this business model--there's a finite supply of people worth reading who are willing to write for free--this certainly seems like a viable business model.