Nope. There’s still hope. Lots of it. Along with serious questions. Lots of them.
If you read media reports and analysis, it sounds like a “crisis” leading to Armageddon, for American democracy as well as journalism, Hamm began. It’s actually more of a business story that the reporters and editors are more interested in than their audiences, Flanders suggested.
“It’s the business model that’s restructuring, not audience consumption,” Flanders said. “There’s an insatiable appetite for information (especially about celebrities).”
As The Economist reported in “Network Effects” (subscription required) on 15 December 2009, “The internet may kill newspapers; but it is not clear if that matters. The news business will survive.” (The story is noteworthy because it reports on a similar time of technological disruption in the media business, with the commercialization of the telegraph in 1845.)
Audience interest remains high. The media and journalism will survive, though not exactly in their current form, Kern and Flanders agreed.
In Flanders’ analysis, what has brought about much of the current crisis in the newspaper business is the same thing that brought about much of the crisis in much of the economy: too much debt. As with all businesses that are essentially monopolies, the newspaper business was highly profitable for years.
Publishers were underleveraged, in the view of the finance industry, and ripe for increased borrowing. They loaded up on seemingly inexpensive debt. Now they can’t sustain the hits of the recession, and some companies are going bankrupt as a result.
With the recession, the most highly profitable part of a newspaper—classified advertising for cars, jobs, and houses—is way down. So is cash. So are profits. “If craigslist and Angie’s List hadn’t cut out the most profitable part of the business, the classified ads, there would be no problem,” said Flanders, who came to Playboy last June from Irvine, California-based Freedom Communications, Inc.
Business Model Changes
Now the entire media industry is looking for different business models, and much of the reporting on the media business centers on either the search for a business model or the potential damage to democracy with the demise of high-quality reporting.
Readers have never supported media content in the United States. Advertisers have, and at a higher percentage here than in most other parts of the world, and advertising will not likely ever subsidize American journalism at the same high rates. Online readers in particular will never be willing to pay for content that they now read for free.
What’s also becoming clear is that some readers will pay more than others depending on how they receive content. Both Playboy and The Tribune are looking to the future of mobile information consumption for additional income.
“Mobile users are conditioned to pay for content,” Flanders said. “Mobile is the place where we want to spend the most time and development.” Media companies, the good ones at least, will experiment.
The newspapers that survive will have a “diversity of portfolio,” Kern said, with various properties in print and online. The key will be “super relevant information that people cannot get anywhere else. That will be the value proposition.”
I grew up in a newspaper family, and I saw Lou Grant on TV as the epitome of the hard-bitten editor. I don’t think Lou Grant would use the term “value proposition” or the term it originated from, “unique selling proposition.” I don’t think he would talk like an online marketer, with concerns about whether “content” is “relevant.”
I’m very glad that Kern does. It’s an even better example of things that must change in journalism than either he or Flanders gave in making the point that business deals that seemed inconceivable in the past are happening today. Much of what journalists have considered to be matters of conviction are, in fact, matters of convention, Kern said, and too much convention will lead to extinction.
What also struck me is that one of the answers for media lies in tradition. News organizations must, in Kern’s words, “define what you stand for that’s better than anyone else.”
The most important defining characteristic is the one that keeps my family’s paper, The Chesterton Tribune, in business: local coverage. “The newspapers that survive will not seek to have a national or even a regional force. They will be intensely local,” Kern said.
As a reporter covering town meetings, I noticed that it was flooded basements after torrential rains that brought people out to meetings, not so much the everyday business of government. That’s intensely relevant content, Kern agreed.
Media people are intensely interested in public affairs, and it’s a good thing. Many, if not most, people are not.
We’re simply witnessing the latest chapter in the long and ongoing debate over the public interest and the media’s mission to protect it. The level of the public’s interest in public affairs (or public opinion) has always been lower than journalists think it should be. “The narcissism of professional journalism is striking to me,” Flanders remarked.
The Dollars of Sense
Yet Dean Hamm’s question and concern—who will pay for quality journalism?—remains. Early in the week, he attended the New York opening of the play Top Secret: The Battle for the Pentagon Papers, which included a post-play talkback on the work surrounding the Pentagon Papers, a secret history of the Vietnam War. The panel included several of the people involved, including former U.S. Dept. of Defense analyst, Daniel Ellsberg, who leaked the papers to The New York Times.
It’s clear, Hamm said, that today the Pentagon Papers would be posted on the internet immediately and in full.
But who would make sense of them? The New York Times paid for a team of reporters and lawyers that spent three months reviewing the papers and looking at such questions as national interest, national security, and public information. The Times’ team then digested the results into a long series of articles, fighting—and paying for—a seminal case for press freedom along the way.
Who would do that now? What do you think?
For more on the state of the media business and its economics, see: