Tuesday, March 27, 2007

The Newspaper Lament

I had a comment (which I HUGELY appreciate) suggesting I read a column and rebuttal by David Lazarus that appeared the San Francisco Chronicle to get a feeling for how people in the industry feel about the same kind of things I’ve been saying about their industry.

I think the author is feeling a little depressed about the kind of things that people said and rightly so. I would have been devastated by the things the clueless idiots were saying. But he is still wrong.

But these articles say it’s really all about paper and the business model that has grown up around it. It’s absolutely fascinating reading, especially by us online types that have created large web sites.

Here are some of the most relevant quotes:

"The main point of my earlier column was that newspaper content has value. Once you acknowledge that, you have to acknowledge that newspaper Web sites are giving away something valuable in exchange for ... what? "

I acknowledge that. I'm a huge fan, especially of reporters and editors. If my life had run a little bit differently it might have been a journalism major in college. My browser’s home page is the Seattle Times, so I generally read it several times a day. I acknowledge my local paper as THE best site for quality local content. I acknowledge the sacred trust you hold in your hands and understand that this must be a heavy burden to bear for a lifetime.

But I don't agree with the rest of this statement, but let me rebut it in a second.

“The harsh reality, though, is that most newspaper Web sites account for only about 5 percent of total revenue. That means a news organization that relies primarily on the Internet couldn't possibly support a newsroom as large or resourceful as what the paid-for print product allows.”

Two points here:

1 – This is a self fulfilling point. The companies that make their money from publishing on dead trees make their money by publishing on dead trees. The delivery method doesn’t make a difference to the content or the quality of the content (Layout yes, functionality yes, content no.) And the Seattle Times costs around fifty cents a day. I doubt that with all the costs from pringing and deliver they make much money off of this, but rather the advertising that goes onto the pulp.

2 - Another harsh reality; just because YOUR online revenue is 5%, it does not follow that:

a) it has to stay that low

b) YOU couldn’t be replaced by a different news site who does as good a job delivering high quality content. Somebody else could hire reporters and have a sustainable online profit margin with free content. Imagine a newspaper where everybody works from home, with no printing costs and hence no printing office space. I’m not saying that this is what I want, but their bottom line would be substantially lower with out a drop in the quality of the content. After all, this is the model that “foreign correspondents” used to create their great content and they have broken many an important story.

Compare the amount and quality of the online advertising on the Seattle Times and an offbeat local newspaper called The Stranger. I bet the Stranger makes more that 5% of its revenue from online advertising. (But I don’t know for sure.).

“And that means this glorious new paradigm of content that's not worth paying for would allow news organizations to be capable of doing only a fraction of the investigative and watchdog work they currently perform.

The stakes couldn't be higher -- that is, unless bloggers and cyberreaders are satisfied to accept the words of Washington politicians, or companies like Halliburton and Enron, at face value.”

Again, you are right.

And I’m very sad about it. Especially when we are talking about the old quasi-National pages that are in very deep trouble now. They were the ones with the deep pockets and super contacts to really protect the world. But the sacred trust that professional journalist have isn’t going to go away no matter if it’s pulp or bits. And news companies are just going to have to find new ways to accomplish this if they want to stay competitive.

I also reject your assumption that online newspapers will never make enough money to support a large staff. So you make 95% of your profit on the pulp side now. It doesn’t mean that there isn’t another 95% to make from the online side. Maybe you will be able to do more. Maybe the disaster that was the build up to the Iraq war would never be able to happen in the new world.

Perhaps newspapers will need to join together to investigate and break big stories. Maybe a reporter working for the Seattle Times could partner with somebody from the SF Chronicle and NY Times to expose a scandal. This could create an army of smaller newspapers who currently don’t have the resources to play on the big stage. Maybe they could even partner with the best of bloggers. Maybe instead of two reporters breaking Watergate, it could have been 6 and they could have ferreted out the details in half the time.

On a side note, I do agree with you about 99% of the bloggers out there. They are like eager puppies that really don’t have a clue about “real” reporting. But that doesn’t mean that you couldn’t train them or find some other clever ways to use them. That’s what Editors are for, isn’t it? A lot of reporting is dull drudge work, if you could offload some of this from your reporters or rely less on wire services; the quality of news could go up, not down.

Rather than lamenting that the Internet was invented, newspaper companies need to be asking themselves how they can take advantage of it.

"… I suggested in my earlier column that another, albeit temporary, remedy may lie in seeking an exemption to antitrust laws so that newspapers as an industry can unite in charging for some or all online content."

You go to antitrust laws for your answer? That’s your answer to this huge opportunity? Not to join the 21st century and innovate but instead to have the government protect your right to carry on like you used to? And even if you get the government to protect you, it doesn’t take a newspaper company to put quality news on the internet. MSNBC – a web site with no newspaper has over 3 million visitors a day and doesn’t charge for content. TV stations are putting more and more local content on their web sites and have unparalleled free advertisements. If the newspaper industry creates a vacuum for free, quality, local content, somebody else will just fill it.

It will always be about quality content no matter if it’s delivered on pulp, bits or both. The business model and monetization for the online segment must change. The online experience for the Seattle Times is not as high quality as the print version and I resent that. If I had a better local choice, they would be my home page.

But, what if the best seller’s list had links to a book seller that was willing to give the newspaper a cut. What if they got a cut from coupons (thanks anonymous comment person!) What if this “get a cut” model was available to almost every ad in the paper? What about for links in the main stories and columns? What if when the newspaper published a map to a location, the map showed some advertisements for businesses that were along the way? What if, what if, what if, I could go on and on. The world has already changed and most newspaper companies are not taking advantage of it.

These are exactly the kinds of things that people mean when they say the Newspaper industry needs to change. Just because the news world used to work a certain way, it doesn’t mean that it still should in the future. Radio didn’t kill all newspapers, but it did change them. TV didn’t kill all newspapers, but they did have to differentiate themselves from them. I don’t believe the Internet is going to kill all newspapers either, but the newspaper industry must again embrace change. They are still thinking in pulp terms and I don’t think that will win in the long run.

The question really is: Will it be an existing pulp newspaper company that is up for the challenge or somebody else?

In a year, will it be my local newspaper company that is my home page or will I have found somebody else that works better online for me? I would be sad to change away from the Seattle Times, but it wouldn’t take much to entice me to switch to a new source that has embraced the 21st Century.


Anonymous said...

Old Media is called that for a reason. They are like a cranky old man yelling about the kids on his yard.

Bloggers Rule!

Brandy Galos said...

I think that both are needed.

I believe that old media has a lot they could teach bloggers (at least a 4-year degree's worth).

I believe that the bloggers could teach the current news companies a lot too. Interaction is the biggest.

But I believe that if you took the best bloggers and the best old media people and sat down them all down for a beer, they would find out that they really like each other. They really respect each other and that fundamentally, they believe most of the same things about the flow of information.

But I bet the bloggers would have the best tatoos.