Clay Shirky has an excellent piece at CJR looking at the Washington Post’s business prospects and how it needs to reconceive itself to survive. It’s smart and interesting – and even more so when read in the context of a separate strain of discussion making the rounds, this one about the dwindling returns from online advertising.
Together, they make the best argument for why we have to rethink core parts of what we do and what we produce, and soon.
First, the advertising discussion. There’s a frightening chart (above) – frightening, at least, for newspaper publishers – showing how print captures a disproportionate percentage of advertising dollars compared to its share of audience attention. That can’t be good news for print publishers; advertisers, at least in theory, should be gravitating towards other areas – such as mobile – where people are spending more time.
But wait, it gets worse. Media critic Michael Wolff dissects the online advertising market and concludes that ad rates have only one direction to go, and that’s down.
The daily and stubborn reality for everybody building businesses on the strength of Web advertising is that the value of digital ads decreases every quarter, a consequence of their simultaneous ineffectiveness and efficiency.
As Facebook gluts an already glutted market, the fallacy of the Web as a profitable ad medium can no longer be overlooked. The crash will come. And Facebook—that putative transformer of worlds, which is, in reality, only an ad-driven site—will fall with everybody else.
OK, so it’s a bit apocalyptic; but the broad outlines of that dynamic have been clear for a while. And if online ad rates – low as they already are – keep falling, what happens to online news organizations that are building an ad-based future (and there are a fair number of them)?
Dan Kennedy, at Northeastern University, suggests a couple of fixes, including keeping the presses rolling, moving to a flat-fee ad model (ie, sponsorship), expanding non-profit journalism, and experimenting with flexible paywalls.
And indeed, more and more publishers seem to be doing that last one. Ken Doctor points out that circulation dollars are growing as a share of many media organization’s revenue – presumably both because circulation numbers are rising as well as because ad numbers are shrinking. And he asks good questions about a world where journalists are more directly paid by their readers, as opposed to by advertisers.
Will journalists feel more closely connected to their readers — and to their public service missions — if readers pay more of the cost of journalism?
The trouble, though – and this is where Shirky comes in – is that with some notable exceptions (high-end newsletters, financial news organizations like Reuters and Bloomberg, for example), circulation revenue is unlikely to be able to pay for large newsrooms. Or at least newsrooms on a scale and size we’re used to, or hoping for. People simply aren’t used to – and quite possibly never will get used to – coughing up the amount of money that news organizations used to take in from advertisers.
So if you can’t bring in the dollars you want, what can you do? You can cut costs, but that only gets you so far before the product starts to suffer.
Or at least, your traditional product starts to suffer. That is, the product – say a newspaper – that’s built around certain ways of doing things, certain structures, and certain areas of coverage.
Why not rethink all those assumptions? Shirky points to Homicide Watch, an innovative site that tracks every murder in DC, run by a husband-and-wife team on a shoestring. Never mind, for the moment, how it’s funded (his salary) or that it doesn’t have a real business model; what it does do is bring a completely different approach to coverage of crime, one much more akin to the ideas embedded in structured journalism.
As Shirky notes:
Because the content is so intertwined (the pages of multiple victims in the same assault are linked, as are the pages of the victim and the accused), Homicide Watch is more like a database than a news wire; each additional detail posted raises the value of the whole collection, a pattern that copies more from Wikipedia than from the traditional newspaper coverage.
The site may or may not make money; and if the Post took over it, it would probably cost them more to run and maintain it. On the other hand, you could make the case that it’s much more comprehensive way to cover crime, has user-friendly content, keeps its value longer, and that all it comes are a relatively lower cost that traditional coverage. Not unlike the way Politifact reinvented at least some part of political coverage.
Is there a business model here? Well, it’s at least a cheaper way of getting broader – and possibly better – coverage; and it certainly doesn’t preclude writing great stories as well.
If we accept that advertising (and circulation) revenues will never rise to the levels of the past decades – and pending the discovery/invention of new revenue streams (my money is on data) – then we need to rethink what we do and how we do it, rather than pine for the good old days, or hope for magical buckets of money to fall from the heavens.
But we shouldn’t cede that process to other people, as we’re in danger of doing. As Krishna Bharat of Google notes:
It used to be that you could focus on journalism because the technology around you was stable. You could hone your craft on top of TV or print or whatever it was, but now the technology platform on which you’re building is also changing. In order to be truly successful you can’t just wait for the technical innovations, you need to be fueling the technical innovations, which means, in turn, that you need to be hiring all these disciplines.
More than just hiring people with those skills – we have to embrace those disciplines.