Yesterday, our fearless leader, kos, said:
With newspapers talking about starting a Craigslist competitor (HA HA HA HA HA!) and bringing back paywalls (good luck with that), it's important to note what those Big Media companies are really after. Hint, it's not "journalism".
http://www.dailykos.com/...
Not "journalism", kos? Really? Then answer me this: What were you after when you started accepting paid advertising here? Why do you accept advertising from entities whose stated goals are not progressive?
No. I'm not calling kos out for accepting advertising. The revenue from that advertising, combined with the revenue from subscriptions, pays for better servers, all that polling that's displayed in the header every day, and a few paid staffers.
I'm not against a bit of it.
What does hack me off is the assumption that the profit motive of the "corporate media" is a problem.
Disclaimer: I work for a media outlet. My salary is paid by a media corporation. I have a vested interest in the survival of the industry.
And that said, I should also say I work in a sector of the industry that probably won't survive in the long run. I know that, and I accept it. The industry is in an upheaval that will eventually leave most of the existing information infrastructure behind. The industry will, like the U.S. auto industry, emerge sometime in the future as something different than it was -- leaner, more efficient, and, hopefully, better.
But right now, what we've got is what we've got. And what we've got to do is find the least disruptive path between what we've got and what we'll have someday.
Profit is not the enemy. I'm not a worshiper of capitalism. I don't think the market is ALWAYS the best way to sort things out. But right here, right now, advertising supported information -- with all its warts and pustules -- is the best delivery system we've got. (Note: I said "advertising supported" not "dead tree journalism". This is about how you pay for your information, not the technology for delivering it.)
Show me the money
Kos:
What the newspaper industry is trying to save right now isn't "journalism", it's "shareholder value".
I'm sorry. This is just Kos projecting his self-interest into other people's motives. There is a finite amount of information revenue out there. Kos wants as much of it as he can get. Nothing wrong with that. As the traditional media move into the electronic arena, they are creating more competition for the available revenue.
Let's be clear. Right now, in most major media companies, there isn't any shareholder value to protect today. The industry, just like GM, is bankrupt. Lack of money is one of the major reasons for the decline of quality in newspapers, television and radio journalism. Journalism hasn't declined because of the big money involved. Journalism has declined because the money went away.
Back in the '80s, newspapers were a high-profit investment. A lot of investors who didn't have a good understanding of the industry jumped in with both feet. The high profits were an attractive nuisance. You got a lot of people with money to burn (generated by the 80s bubble), who bought media companies.
Then, in the late '80s there was a crash. It was the first of several that culminated, 20 years later, in the really big crash we had last fall.
The stockmarket crash of 1987 sent a shiver through the business world (naturally). It accelerated the trend of media consolidation. Newspapers changed hands like cards in a game of Fish.
Profits were tanking, and the new owners -- many with little experience in the industry -- hired "experts" to cut the fat and make their investments profitable again.
The experts made a lot of stupid mistakes. What works to get your widget factory back in the black, isn't necessarily going to work to get your media outlet making money again.
The strategies that were tried and true in manufacturing, in fact, put media companies in a worse position. The mantra of the '80s was "cut workforce, invest in more efficient means of production." So big, expensive new offset presses were built. Reporting staff was cut.
Another mantra of the '80s was "bigger is better." So media companies devoured one another.
The problem is, in journalism, reporting staff IS the means of production. The offset press and the broadcasting transmitter are about as important as the staplers at GM headquarters. GM put its money in the wrong places in the '90s and the first decade of the 21st century. So did media companies.
Offset presses are obsolete today. They're as obsolete as the press Ben Franklin used to print the Pennsylvania Gazette. They're as obsolete as the Hummer.
But newspapers everywhere are saddled with these expensive behemoths. It takes a crew of skilled tradesmen to run one. They require tons of paper (made from wood pulp, an over-extended resource) a week. The product has to be trucked away from the plant (using scarce fossil fuel), and driven to delivery points (newspaper boxes) and individual homes (home delivery).
In short, the entire process of producing and delivering a paper newspaper is rooted what made sense in the 19th and 20th centuries.
The one segment of the process that needs to survive is reporting. And expanded reporting is a hard thing to sell to the money managers as important, because it doesn't directly generate revenue.
Right now, if newspapers can't find a way to generate some revenue, somehow, they are going to close their doors. They won't make it across the gap to the new age of journalism. This is true for the New York Times, the LA Times, the Washington Post, the Chicago Tribune and the community newspaper in your hometown.
It's NOT about protecting shareholder value. It's about having any shareholder value at all.
Journalism for the 21st Century
Home delivery is dying. Come back in five years and the home-delivered newspaper will be as gone as home-delivered milk.
The business model for newspapers -- up until the last couple of years -- was to sell hardcopy for less than it cost to produce and distribute, with the difference made up by advertising. For broadcast media, it was to broadcast a newscast paid for by advertising. Both models are faltering.
For broadcasters, the problem is that you can't piss off your advertisers and stay in business. The real customer for advertising-supported TV news is the advertiser, not the viewer. The viewer is the means for attracting paying advertisers.
Broadcast news is necessarily going to be biased toward business. That's why the broadcast and cable news outlets never challenged the Republican administration through the Bush years. The Bush White House was unapologetic about favoring mega-corporations, big oil and defense contractors. At the end of the day, this is who was financing NBC, ABC and CBS.
I need a new drug
So, how do we pay for reporting in the 21st century? Make no mistake, somebody has to pay for it.
Kos likes to say that bloggers are taking the place of traditional reporters. To a small extent, he's right. Huffington Post, Politico, and even DailyKos are producing a certain amount of original reporting.
But here's the catch: Right now, the vast majority of original reporting is still coming from the dying carcasses of traditional media. That will shift as time goes on. But as it shifts, there will have to be a new business model that allows Internet journalists to be paid. Not on a micro basis (like the small handful of paid staffers here at DailyKos), but on a macro basis.
You can't say "our manufacturing base isn't in any trouble. Look at all the kindergarteners pounding on toy workbenches! That's the future manufacturing." Yes, it is. But there's 20 years between now and when those kindergartners will be ready to make fuel-efficient cars. We need to rebuild our manufacturing base NOW.
There has to be a business plan that makes unbiased reporting pay. That's the only way we'll have unbiased reporting in the future.
It takes maybe 20 reporters to adequately cover the President of the United States. Providing 20 people a living to cover the president will never be a significant problem.
But how are you going to have enough reporters to cover the city council in every city, suburb and town in America? That's where the big news gap is happening -- not on the national scene.
Local reporting is important. Local reporting will all but disappear when the last newspaper shuts down.
The newspaper business model developed over several hundred years. It was based on a balance between readers handing over a dime or quarter for today's newspaper and the advertisers who paid the rest of the cost. The readers were benefiting the advertisers by viewing the ads, so the advertiser had to defer to the reader's benefit. It was a symbiosis that worked.
Today, the printing and distribution cost is so great that advertisers are shouldering the majority of the burden. If the cost was balanced between advertisers and subscriptions as in the past, readers wouldn't be able to afford a newspaper.
So the reader's interests are waning as a force behind content. At the same time, advertising is so much cheaper on the Internet that advertisers are leaving as well.
The problem for reorienting the business to the Internet is that Internet revenues are minuscule compared to the old print advertising and subscription revenues. Costs are much lower for the publisher as well, but the existing subscriber base hasn't entirely moved to the Internet, yet. Newspapers feel they still have to print and deliver to keep those readers.
Back in the early '90s, I sat through a presentation on the electronic newspaper of the future. Yes, publishing leaders were thinking about this crisis long before it happened.
The scheme presented at that session was as wrong as wrong could be. The only aspect they got right was that news in the future was going to be delivered electronically rather than by a kid on a bicycle. (They wanted to invent a device sort of like the Kindle and sell it to everybody, to get their morning newspaper delivered by dial-up. The device would have been too expensive to get a significant number of people to buy it, and we all know that dial-up is already obsolete.)
But the point is, even though publishers could see today's crisis coming, they couldn't remake their industry for it until the market was ready.
The market is ready now.
The task at hand is remaking the news industry without throwing away the baby with the bathwater.
Bloggers are the kindergartners of the news world. They have tremendous potential. But they've got to find a way to make it pay on the local level before they will offer an alternative to the current news infrastructure.
In short, there has to be a way to produce "shareholder value" in the blogosphere. Otherwise, you will continue have what we have now -- outlets that exist to put out a person's, or a small group of people's ideology. There's nothing unbiased about that.
Paywalls are one possible aspect of the solution. Online advertising is another. There's even an argument for government subsidy.
Yes, newspapers starting a Craigslist competitor is a silly idea. (There's no money to be had in running a Craigslist competitor.) But somebody has to come up with a bunch of silly ideas if we're going to have a body to pick the good ideas from.
There's little point to sneering at what's left of the old news industry. What we need are constructive ideas for retooling to serve a changing world.