Posted by: structureofnews | December 12, 2010

Mistakes Were Made…

Where did we go wrong?

Its certainly true that the news business as a whole made all sorts of mistakes over the past few years.  And so it can be helpful to pick through them, because analyzing errors can help point to better paths forward.  But only if we ask the right questions.

John Morton, a consultant and former newspaper report, paints a pessimistic picture in the American Journalism Review about the errors that media companies made when the internet arrived.  Going free in the early days was a big one, he concludes:

…(the) decision made by all but a handful of papers that information posted on Web sites should be free, under the widely held belief (including initially by yours truly) that large numbers of people taking advantage of free information would attract large amounts of advertising. That didn’t happen. Lots of people came, but lots of advertising didn’t. Last year, only 10 percent of newspaper advertising revenue came from online – this after a 10-year effort.

It’s not an isolated view these days – gone now is the wide consensus, at least among journalists, that information, and news sites, should be free.  Indeed, it’s a bit of a stampede to the other side of the fence now.

This new consensus – if there’s ever such a thing among journalists – isn’t completely fresh; it includes such old standbys as the loss in quality and competitive advantage because of drastic cost newsroom cuts – cuts imposed to maintain high margins that in all likelihood are never coming back.

What the industry partly sacrificed with its cost-cutting is the one attribute that has protected it against all previous competitive threats – the overall quality of its journalism. No other form of media is organized to provide broad and deep journalism so vital to our democracy – not radio, not television, not bloggers, not even the excellent online investigative journalism operations that have sprung up

These are certainly valid points, and lots more nuance in the argument than a couple of paragraphs can convey.  But going free and cost-cutting aren’t the main causes of our current malaise; they’ll make it harder to climb out of the mess we’re in, but it’s hard to argue we’d be in all that much better shape with paywalls and bigger newsrooms.

Not that I would mind having either.  (And I should point out that the South China Morning Post has both a paywall and a reasonably-sized newsroom.) But advertising, as John points out, didn’t come to free news sites because it migrated to a host of other sites, some news-related, some not.  Going free may or may not have accelerated the trend – he picks on aggregators who freeride off news organizations – but ultimately the flood of inventory on the web is what keeps rates and ad revenues low.   Keeping behind a paywall wouldn’t have altered that fact, but it would have provided a separate – and needed – revenue stream.  So it would have helped, but not fundamentally changed the dynamics of the industry.

And there would still be huge pressures on costs in newsrooms.  True, corporate management could have made do with lower margins, but leaving newsrooms intact wouldn’t have done us much long-term good, either.  I’m not suggesting that firing lots of people was a good thing; but that it’s unlikely that newsrooms would have retooled themselves without some pressure.  In fact, arguably most newsrooms still haven’t really retooled themselves despite immense pressure.  And I don’t mean “continuous news desks” or handing out video cameras to reporters.

If our failings were not putting up paywalls and not accepting lower margins, then the fixes are fairly straightforward: Put up paywalls and accept lower margins.  Or raise non-profit or government money to help shore up revenues.  And then we can keep on practicing more or less what we’ve always done.

But if those aren’t our failings – if it’s much more a seismic shift in how people access information, in how information is created and shared, in the tools and methods available to analyze that information – well, then maybe we need to do something very different.  Like rethink the very basic model of what we make, and how we make it.


Responses

  1. Your last paragraph is great.

    How about experimenting with social payments?

    Video: http://www.youtube.com/watch?v=wKX7dPzF0o8

    Blog post: Confessions of an Anti-Paywall Revolutionista. How being Hari Seldon can save us from Info Dark Ages
    http://blog.kachingle.com/2010/10/confessions-of-an-anti-paywall-revolutionista-how-being-hari-seldon-can-save-us-from-info-dark-ages/

    Website: http://www.kachingle.com

    Cynthia at Kachingle.com
    “social cents for digital stuff”

    • Cynthia, thanks for the comment – and I confess it’s been a long time since I heard Hari Seldon’s name (being much more of a Arthur C. Clarke fan myself). Would love to hear more about how Kachingle is coming along – I’ll email you directly – and I’m certainly all for lots of different experiments, both on business models and on products. If anything, I fear we’re not experimenting enough on the product side, and that if we don’t, we won’t find a viable business model. Reg

      PS: read your post on the impact of multiple paywalls and the question of too much inventory. Interesting point and well worth looking more deeply into.

      • Hi Reg – I look forward to chatting with you.

        I tweeted this post:

        Reg Chua comments http://t.co/27IhA0E on John Morton’s article in AJR Costly Mistakes http://t.co/PKmO3J9 #paywall #journalism #newspapers

        Cynthia

  2. The right question for a business is “what opportunities do these new, disruptive technologies present for our brand.” But for more than a decade newspapers have been asking “how can we adjust our business model so we can keep doing what we’ve always been doing,” because the business side is tethered to its longtime cash cows and the editorial side has quasi-religious faith that its work is essential to democracy. Not necessarily wrong, but not the way to seize ground going forward. Even at this late date, the lesson is not fully learned, or newspaper and magazine companies would not be designing iPad apps that mimic print.

    • Andrew, couldn’t agree more. Of course, Clay Christensen predicted all this behavior, and there’s no reason we should be immune to what ailed all other industries caught by a disruptive wave. Although I suppose we could be less sanctimonious about it. And so we really do need to get a much better handle on what people really want, what we truly bring to the table, and what new products or services we might create that are valuable to society. Reg


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