The news business
Saturday, February 7, 2015
I was in an uncomfortable chair sitting through another boring quarterly meeting led by our publisher and his PowerPoint deck.
Some astute member of the newsroom had coined the nickname “Mojo” for him, partly as a play on his name, but more as a comment on his dreary lack of charisma. It was all EBITAs and P&Ls.
Well, not so much Ps as Ls.
He showed a 10-year chart of company earnings and it looked like an EKG right before the nurse called for a crash cart. I returned from the meeting, and a newsroom friend asked how it went.
“I basically sat in the back carving ‘No fate’ into a tabletop with a survival knife,” I replied.
Such was life in newspapers in the past decade.
Life at newspapers isn’t going to get any better soon.
The industry, as a whole, is far away from getting to any new stability. Growth that matches inflation would be very difficult; growth that matches the growth of the overall economy even tougher.
The 2008 recession had roughly the same effect on newspapers as the bus did on Regina in “Mean Girls.”
Somehow despite eroding conditions, the newspaper business in the United States made $37.5 billion in revenue in 2013. I find this figure amazing – unreal even. I marvel that newspapers make any money at all. It’s like finding out MySpace is still around or Abe Vigoda is still alive.
How is this possible, seriously? I see someone buying a print newspaper and I think “why would you do that?”
The newspaper business is shrinking and will continue to do so, as Neiman Lab lays out. Yet, the reaction to newsroom cuts and a smaller newshole is righteous outrage without acknowledging the realities causing both to shrink. This seems to be the favored reaction amongst journalistic types.
It’s also fashionable to note that newspapers “still don’t get the internet.” I’ve said it often enough myself through the years.
In the past 25 years or so I’ve worked on the print side – I was even cofounder of a small daily paper, now folded, alas – and the online side, where I was a content producer and later a UX designer and front-end developer of several news verticals.
A question I’ve thought about often is what exactly would a newspaper company that “gets it” look like? How would it work? What would it be?
My answer is right in front of us. And it means they would look not all that much like they do today, and more troublingly, not at all like something many current newspaper staffers would want.
When thinking about the news industry, an old joke comes to mind: How many psychiatrists does it take to change a light bulb?
Only one, but the light bulb has to want to change. But the fact is newspapers aren’t just going to have to want to change, they are going to have to change or die. But will they?
Newspapers are managing their decline and transition to digital as well as a Toonces the Driving Cat managed the decline of a car rolling down a cliff.
Just as AOL can’t let go of its profitable dial-up business because that’s where the money is, newspapers can’t let print and its advertising revenue go.
Maintaining this print legacy keeps alive a false premise. Newspaper employees like to lament that people “paid for news” for decades, but then the Internet came along and ruined everything. Now everybody just wants news for free now.
“What we do has value and people should be willing to pay for it,” I’ve heard an editor I like and admire say more than once.
That’s not a business model, it’s pique. It’s wishful.
Price is just a measuring device. People will pay only if they want to, not just because the seller desires them to pay.
Besides, no one paid for news. The 50 cents readers gave the scruffy moppet shouting “extry, extry” on the street corner or the $20 a month they sent to the circulation department mainly covered distribution and production costs.
Newspapers always have and continue to make the bulk of their revenue the same way Google or Facebook does: By delivering content and selling ads against it. It’s just that Google or Facebook are smart enough to let others pay the cost of creating the content.
This delivery of ads – namely a local monopoly on the delivery of ads and its attendant rates – was what the internet disrupted, not “paying for news.”
Newspapers actually sold the same thing that grocery stores and Google and a neighborhood coffee shop all sell: convenience. You don’t have to travel all the way to Colombia to get your artisanal shade-grown, cold-brewed, small-batch coffee. You walk down to the corner.
Newspapers were the best – or really – the only way many readers could get news, local and national ads, “Dear Abby”, classifieds, “Calvin & Hobbes”, a crossword, movie reviews, etc. News broadcasts, weekly magazines and the like were competition, but newspapers generally owned the market they’d staked out.
As business analyst Benedict Evans points out, newspapers are not, by strict definition, media companies. They are organized and operate more like light manufacturing companies.
The internet disrupted the newspaper industry’s monopoly by removing manufacturing as a barrier to entry. Previously, to have the influence and reach of a major media company would cost tens of millions of dollars for a printing plant, paper and ink, a fleet of trucks, bribes for union officials, etc.
To cite Clayton Christiansen’s disruption theory, new technology makes something previously unreachable by most suddenly cheap and simple enough that anyone can have it.
I was at a news hackathon last month and the fresh-eyed youths kept prattling on about making platforms to “democratize the news.” Finally, I said “That has already been done a long time ago.” Anyone can publish, usually for free, on Blogger, Tumblr, YouTube, Vimeo, Squarespace, Flickr, Wordpress, Twitter, etc.
That is the degree the news business has been disrupted. One guy with skill and savvy – Daring Fireball proprietor John Gruber comes to mind – can make a more interesting tech site than a staff and earn a lot more money than if he worked for an establishment publication.
Newspapers are full of information readers can easily find all over the place in better, easier, quicker formats that don’t leave ink on your hands or get thrown into a puddle by a spiteful delivery driver. And those sources don’t jam a paywall dialog box in readers’ faces every time they click a link.
Local newspapers continue to operate as if their monopoly is still in place, as if people still have to come to them for news. They remain general-interest in an era of ever-growing specificity and choice.
Have an urge to listen to a particular song? Go to Spotify and play it. Or Grooveshark. Or Rdio. That really great moment from a movie? Chances are it’s on YouTube. That great Onion story from 10 years ago? It’s a Google search away. And it’s all free.
In the face of all of this change, newspapers have taken their sprawling coverage model and transferred it online.
And they’re charging for it. After all, locking down the product worked so well for the music industry.
And the younger generation, the ones who live on social networks and Snapchat, see news as something that is everywhere, practically in the air. They care about the story not the source.
Going to a single website and paying to get in? That’s like getting a newspaper thrown onto your porch every morning.
Economic pressures alone should make a newspaper organization built for the future radically different than the sprawling operations we see now.
It’s not hard to find a suggested model to transform newspapers because it already exists: Look at any successful, growing online news operation.
You’ll generally find three things:
- The bulk of their staff is mainly devoted to the creation of content or the technology to deliver that content.
- They are built around topics that are more specific than general.
- Larger headcounts don’t result in higher hit counts.
One-man-operation sites like Daring Fireball or Drudge Report rack up hit counts that dwarf publications made by buildings full of people. As the scale increases – The Verge, Gawker, Politico, Vice, SBNation, Vox – these organizations are still mainly content operations with smallish staffs compared with their stratospheric traffic.
One of the first things a visitor to a major metro newspaper such as The Boston Globe – where I worked for a little more than two years – notices is the sheer scale of the place, not just in square feet but in manpower. What do all these people do?
An argument for each’s place on the org chart can be made, but that’s not really my point. Somewhere along the line the newspaper organizations that we see today are going to have to begin the process of looking more like online-focused news orgs.
Sure, the delivery trucks and drivers and the printing plants will eventually be gone. Everybody knows that. But much more change than that will be needed to find a way forward.
Newspapers will need a smaller staff with a laser-like focus on local and state news, local sports, local arts and culture. They’ll need to let the other stuff – national, international, technology, national arts – just go.
Someone else is already doing all those better anyway.
Newspapers have to change. Of course they do. Everybody knows that.
Projecting 50 years into the future it seems obvious that newspaper companies – if they survive at all – will be significantly different organizations than they are now.
The Google/Apple way of looking toward the future is to build it now. Someday we’ll have self-driving cars or all wear smartwatches, they reason, so let’s start working on that right now. The newspaper way is to jealously protect old models with ideas like paywalls that mainly extract money from an existing base.
Yet, some moves away from print to online-only have been tried – the New Orleans Times Picayune, Newsweek, The Christian Science Monitor, for instance – but they are often reported with a sad, end-of-an-era tone. Or misunderstood outright.
On Wednesday night, though, the Times’ David Carr reported that the Times-Picayune will go through a deep round of staff cuts and be published just two or three times a week. (Emphasis mine.) link
By moving content online, news was going to be published much more often, not less. Not being tied to a schedule mandated by a mechanical production and distribution process is a huge step forward to the future.
This is the same newspaper that, in the words of the New York Times’ David Carr, won a Pulitzer for its Hurricane Katrina coverage in part because
“The presses lost power, but the newspaper used its Web site to post updates throughout the storm.”
Imagine that. Being honored for news updates that appeared on a web site.
The assumption among longtime print veterans is that these organizations lose influence when they drop print and go online only.
In my online news producer days I would update editors on online hit counts. At one morning meeting, I cited hits in the high thousands for a news story.
Some editor laughed and said, “Well, at least we know 200,000 people read it in the paper.”
“What makes you think everyone who subscribes to the paper read it?” I said back.
My neighbors in my co-op often provided contrary evidence to this editor’s readership theory by dumping their unread papers into the recycling bin still in their plastic delivery bags.
On many mornings one of the first things I’d do in my producer shift was pull down that day’s print lead because it was performing dismally online. As one of my former online bosses used to say, “We know what people actually read.”
Print-centric thinking was seen in the wide praise that The Orange County Register got when it clamped down on its site with hard a paywall and doubled down on print. It also cut back its online posting and canceled an iPad news app. Neiman Lab quotes its then-editor
“It does, however, mean cutting back on ‘things that seem to be distracting the staff from the basic mission, which is to increase quality first in print.’”
Print may be “where the money is,” but it is not the future and hasn’t been for a long time.
One problem facing newspapers is journalists.
I spent more than 20 years working in newsrooms, and have two gross generalizations to make:
- Newsrooms are tradition-bound and extremely resistant to change.
- Journalism draws a certain personality type that doesn’t do anything unless there’s a deadline.
Neither of these institutional personality traits lend themselves to radical remakes.
When billionaire Amazon.com founder Jeff Bezos bought the Washington Post using money he found in his couch cushions, speculation immediately turned to “What will the genius behind Amazon do to reshape the news industry?”
If it includes anything like what he does at Amazon with logistics, organizational structures, efficiencies, staffing and cost-cutting, journalists aren’t going to like it.
There’s a bit of ego in that resistance, too.
“Don’t start a fight with someone who buys ink by the barrel,” the saying goes. The implicit message is that the press has the power to ruin you.
People who work in the newspapers get a lot of prestige and power.
I found this out when I was a 22-year-old college student who two years earlier had been working as a janitor but was now getting the Illinois governor’s office to return my phone calls.
When at a party when someone would ask “What do you do?” and I would answer “I work at the Globe.” People would respond with “I bet that that’s cool” or “That’s awesome.”
I would typically sigh, “Well, you’d think …” But that’s for another chin-scratching thinkpiece.
Throw in heady First Amendment, truth-telling, Woodward-Bernstein, Edward R. Murrow crusader talk, and people who work in journalism have a high regard for what they do, something like tenured faculty.
Toward the end of my newspaper career it began to feel like newspaper journalism is an industry that’s spending an undue amount of time mourning its lost past.
This sounds, like criticism, but I get it. I do it too.
I love the romantic, bourbon and stogies “stop the presses” flavor of newspaper journalism with the presses, the inky smell and a bundle of newspapers landing with a thump on the ground.
In 2007 when we launched a new daily newspaper, we held a champagne toast and went to the plant to watch the papers come off the press. The joy of a holding those first papers – the two-story-tall press rumbling like an earthquake, the ink still sticky on my hands – has never been repeated by a half-dozen website launches I’ve done since.
It’s not easy to just let all that go.
It’s one thing to watch an industry be reshaped by forces out of your control and quite another to watch a romance whither away.
Perhaps this is is too pessimistic.
Newspaper journalism is still a vital, central part of public life and debate, as The Guardian and The Washington Post’s reporting on the Edward Snowden document leaks showed.
But the financial underpinnings of the entire industry are eroding further every year. It’s not going to stop. Billionaires such as Bezos at The Post and John Henry at the Boston Globe may buy some time, but it doesn’t change the fundamentals.
But more than that, I spent two decades in the news business. My gut tells me that it’s over. It’s a feeling I can’t quantify in a spreadsheet or a link to an industry financial report.
To quote “The Sun Also Rises”
“How did you go bankrupt?”
“Two ways. Gradually, then suddenly.”
This is what the news business feels like. Gradually, then …
Perhaps it’s unimaginable that venerable news organizations could vanish. But because something has been doesn’t mean it always will be. In 1145 A.D., the largest city in the world was Merv, Turkmenistan, a major stop on the Silk Road. It’s now gone, except for ruins.
Newspaper leadership can content themselves by saying that people like and desire what newspapers do. But it’s worth noting that the world didn’t stop wanting silk and spices and perfumes from the East. It just stopped needing the Silk Road and the residents of Merv.
The ability to vanish from the landscape is much easier than it might seem.