Filed under: Media
Megan McArdle has an excellent, excellent post up on the very real problem of the death of the business model that supports news reporting. When I say “excellent, excellent,” I may be somewhat influenced by the fact that I just drank two Hoegaarden witbiers while sitting out on the Museumplein watching the 10:30 pm sunset. But even discounting for the witbier factor, it’s an excellent post:
Journalism is not being brought low by excess supply of content; it’s being steadily eroded by insufficient demand for advertising pages….Even if every newspaper and magazine in the country entered into a binding cartel agreement not to put more than a smidgen of free content on their websites, newspapers would still be losing money, and closing by the dozens. It’s the economics, stupid.
We’re not witnessing the breakup of a monopoly, in which more players make more modest incomes providing more stuff, and everyone flourishes (except the monopolist). We’re witnessing the death of a business model. And no one has figured out how to pay for hard news. Hard news stories take a great deal of time to write–more time than most amateurs can afford, which is why blogs tend to do opinion rather than journalism. Moreover, they are at least greatly improved when their authors are not worried about losing their jobs if what they write pisses off a local power broker.
This is a genuine loss for the American public. Cities without newspapers seem to experience a sizeable increase in insider self-dealing and other forms of corruption–one theory as to why the Federal government is less corrupt than state and local governments is simply that it’s more thoroughly covered by the press. I am second to none in my appreciation of new media and its possibilities. But so far, it has proven more effective as a complement to old media than a replacement.
This seems exactly right to me. There are a few types of reporting that still have a solid business model going forward. The first, obviously, is financial news. The WSJ, the FT, The Economist (or at least their Intelligence Unit), Bloomberg, Dow-Jones and Reuters are all on solid footing; wealthy and powerful people need their information to make decisions about how to spend large amounts of money. The second is government-supported news services. The BBC, AFP, VOA, and of course such outfits as Russia Today, Al-Jazeera and so forth will continue to have money. Then we have the non-financial wire services — mainly AP. Their revenue model seems mostly sound for the time being (though I was surprised to learn how much of it comes from the US government as a client). And finally, we have the big-name “national” newspapers — the New York Times, the Guardian, the Washington Post. Their revenue model is not sound, but their brands are so strong that it’s hard to imagine them failing to capitalize somehow if/when the economy returns to prosperity. (Though the Post, which is failing to protect its brand, is looking shaky lately.)
I’m not sure there’s a single other English-language news outlet, certainly not in the US, that’s definitely going to exist in 5 or 10 years. Increasingly, what we think of as “news” today is going to be produced by public relations companies, advocacy organizations, think tanks, and political parties, trying to get their messages out. There will be fewer and fewer impartial news organizations that make money simply by getting people to pay attention to important or juicy news stories. This is a loss for the American public, as Megan says, and it’s really not clear how to overcome it.
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