It’s the new conventional wisdom: The news biz is dying. Declining circulation. Abandonment by advertisers. Falling revenues. Cuts in staffing to reduce costs. The news biz needs a new business model, the critical harpies proclaim.
But what should a new business model for an industry whose principal product is journalism look like?
It would have to recognize several new â€” and old â€” realities.
â€¢ Any new business model must generate profit.
There’s no way around this. Journalism is best sustained within a for-profit frame. A company that engages in newspaper journalism as a product is not supported by government (unlike public television) nor should it be. The same holds for commercial broadcast journalism as well. To provide news, the company must make a profit to attract investors and secure the resources to collect, report and transmit that news. A non-profit model cannot immediately match the breadth and depth of news reporting that a healthy democracy of more than 300 million citizens requires.
The industry’s nosedive to lower revenues and reduced circulation has been predicated on an ill-fated imperative: maintain the current level of profit (about 16 percent) to retain and placate short-term institutional investors. That’s unsustainable, but news corporations refuse to confront that reality.
Still, arguments about public service as a moral imperative to maintain that healthy democracy, etc., while sounding grand, must take a back seat to the fiscal imperative. A news company must earn adequate profit to be able to tell better stories.
The industry must revisit its relationships with its investors, its consumers and its advertisers to determine what level of profit is appropriate, necessary and feasible for investors as the industry seeks to provide better stories to consumers and better service to advertisers. But there must be profit to enable large-scale collection and dissemination of meaningful news stories.
For long-term gain, there will be short-term pain. It takes money, and lots of it, to tell better stories in quantity.
â€¢ Find a technological panacea that will recapture some revenue from newspaper advertising’s Big Three: classified “help wanted” and “articles for sale” ads, and classified and display ads for real estate and motor vehicles.
These are the significant revenue sources the news companies have lost to non-news, online enterprises. Those ads have all but vanished from print newspaper pages. Online ad revenue for news companies is increasing, but it remains a small share of overall revenue. Still, news companies continue to delude themselves that online ad revenue is the immediate future. But that revenue is not increasing fast enough to rescue the current, faltering business model.
Advertising’s Big Three have migrated in bulk online. If the journalism business seeks to revitalize its content, it must find a way to recapture some of that principal advertising revenue it has lost. Without new and recaptured revenue streams, the journalism industry will not be able to produce better stories for people to read to produce the increase in eyeballs â€” and the proof of greater return on investment â€” that advertisers demand. (Can you say “vicious cycle”?)
â€¢ The business model must produce a greater quantity of a higher quality of journalism.
Currently too many people (young and old alike) who would like to work in journalism think newspapers are dying. They think they’d have to be nuts to go into a business that believes 60-hour weeks without overtime should be a normal routine for an entry-level salary of about $27,000.
If the business of journalism is to survive, a better product is necessary. That means better compensation for journalists and support staff â€” and hiring more of them. It means more money spent on continual training. It means news companies must work to achieve better relationships with and provide greater financial and instructive support to journalism education. The industry needs to improve the skills and breadth of general knowledge of journalists.
The industry needs a better product than it now produces. If the industry seeks to survive on the viability of journalism as content, it must invest to improve its product and its value for consumers, advertisers and investors alike.
Simply put, the new model should recognize that better compensation and improved working environments could produce a more skilled and more motivated work force. It takes seasoned, well-trained, properly compensated journalists to tell better stories. And the industry needs an improved product â€” better stories â€” to justify claims on old and new revenue streams.
â€¢ The model must confront the related issues of “free” and “social networking.”
The younger readers the industry seeks to attract today â€” and is failing to do so â€” expects the content, the news product, to be free.
If the industry intends to charge what this important demographic now gets free, it must convince that part of its audience that the content has new, added value and can be delivered in a timely manner and through a means of the individual reader’s choosing.
That’s important. Social networking through the Facebooks and YouTubes of this world have woven a culture of pass-along and free content into the very demographic the news industry says it wants to claim as customers. This demographic, a continually changing 18- to 30-years-old constituency, has adopted information-seeking and -sharing habits that the journalism business has blithely ignored for quite some time. Simply having an online presence via a Web site is insufficient for this demographic.
The means of delivery of content has become almost as important to this younger and technologically obsessive demographic as the content itself. A new business model has to think beyond mere repurposing (medium-dependent revision) of content. It must provide content of sufficient value to this segment of the audience to encourage its members to accept paying for it and to want to demonstrably circulate more of it (along with attached advertising) to other readers or viewers.
All demographic segments of the audience, including this advertiser-prized one, want better stories and brain-dead easy ways to acquire and share them. That also means newspapers must confront blogging â€” whether to, how to, why, and definition of measures indicating effectiveness. Blogs are a principal means that the industry’s desired demographic obtains and shares news. Newspapers have yet to fully develop adept, adaptable and financially and journalistically productive approaches to their own blogging capacity.
â€¢ Newspaper companies must decide what to do with their print product.
Some newspapers have begun to abandon the print product â€” but by abandoning readers. They have withdrawn from widespread regional (and rural) circulation to core areas around large municipal centers. This, too, is a short-sighted means to cut expenses. An industry that abandons customers is extraordinarily misled by its managers.
But how does this relate to keeping or killing dead-tree newspapers? Responsible corporate leaders will seek to retain readers â€” the customers â€” and acquire new ones. If a decision is made to abandon the print paper for an online version only, then newspapers should lobby for a broadband version of the Rural Electrification Act of 1936. The means to reach more readers must accompany a decision to go-it-online. Broadband must have broad, affordable reach to encompass the whole of a society. News companies should lobby Congress for government-assisted and -encouraged broadband access throughout rural America.
It is unthinkable for an industry that has its origins in defending its readers as their adversary to government to abandon those readers just because their location is geographically problematic. The public service mission of journalism ought to rule here. An industry engaged in journalism can’t be allowed to leave people behind.
â€¢ If the new business model decrees abandoning the print newspaper, its online or multimedia replacement must retain the journalistic responsibility of being the “paper of record.”
The maxim that journalism is the first, rough draft of history grew from newspapers’ legal and cultural roles as “papers of record.”
Someone has to keep track of society’s daily significant occurrences. Someone has to keep track of government meetings, deliberations and actions. Someone has to maintain a daily police log, a record of court proceedings, real-estate filings and such. Someone has to publish required “legal notices.” Few bloggers will keep track of the endless budget meetings and other factors influencing local property tax increases.
That’s what journalism does. A paper of record manned by experienced journalists does these important tasks. A new business model must allow that role of “paper of record” to remain firmly in journalism’s hands.
â€¢ Under a new business model, journalism must reconnect with what it has lost through more than a decade of slashing newsroom jobs. It must revitalize local reporting.
Read your local paper (or view its Web site). What’s not there that was a decade ago, two decades ago? Do you miss it? As newspapers have slashed reporting and support staffs, the ability to cover local news as competently and completely as in the past has diminished significantly.
Only the easier stories remain â€” the accidents, the fires, the crimes, the interesting government meetings versus the boring but complex, important ones. And sports. Has sports become the largest section of your local paper? Twenty years ago, it probably wasn’t.
News companies must find a way to reconnect with local issues, local concerns, local interests. They ought to do this in self-interest: Well-done local news breeds local advertising dollars.
Journalism is controlled by corporations whose principal motivation today is certainly not journalism as a public service but some truncated form of journalism that maximizes short-term profit.
It’s important to differentiate between journalism and the news business. Journalism represents an activity inherent in a functioning democracy that acts as a watchdog, that defends readers (and viewers and listeners), and that holds governments and corporations accountable for their actions. (Journalism even ought to entertain!) That’s the trade-off for protection against government interference provided by the First Amendment.
For journalism to retain its important democratic role, it needs a home. Ironically, that home must be a better-functioning and profitable news industry.
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Understanding how the media industry works and why it works that way is a principal reason Scholars and Rogues was founded. Much of our dialogue here centers on the role of the media in social, economic, political and cultural transformation.
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