Newspaper Folks Go Crying To Congress For Help
from the oh-please dept
Let's just get two points out of the way here before getting on with this post, because they're important, and they're repeatedly ignored by journalists and newspaper folks who want to play the victim, rather than recognize the future (I'm not saying all newspaper folks are like this...):- Advertising has been the real business model for newspapers for ages. Subscriptions have really only covered (maybe/barely) the cost of printing and delivering the paper.
- The biggest problem facing newspapers going into bankruptcy or shutting down these days is not a lack of subscriber revenue, or even a downturn in advertising (though, there has been a downturn), but the fact that they had massive debt, because they borrowed way too much money. Many, many, many newspapers are still quite profitable -- but not profitable enough to service the massive debt taken on by management.
Oddly, David Simon was asked to speak. It's not clear why Simon was asked to speak. He hasn't worked in the newspaper business in 14 years, though he did write a fictional TV show, The Wire, about a newspaper. Somehow that makes him qualified to speak about the industry. Now, Simon's a smart, thoughtful guy, but when it comes to this subject, he consistently seems to get the details wrong, even to the point of disproving his own points. In his testimony before Congress (pdf) he lashes out at the internet, aggregators and blogs for no clear reason:
The internet is a marvelous tool and clearly it is the informational delivery system of our future, but thus far it does not deliver much first-generation reporting. Instead, it leeches that reporting from mainstream news publications, whereupon aggregating websites and bloggers contribute little more than repetition, commentary and froth. Meanwhile, readers acquire news from the aggregators and abandon its point of origin -- namely the newspapers themselves.First, Simon seems to be confusing a number of different things here. He's flat-out wrong that not much first-generation reporting is delivered online. Plenty of it is. It's almost silly to have to start pulling out examples. Second, "it" (being the internet) doesn't "leech" anything. "It" is just a delivery mechanism, just like "paper" is a delivery mechanism. Again, if the internet "leeches" reporting, that's no different (and no less ridiculous) than claiming that reporters "leech" off the people they write about. Third, while some bloggers and aggregators may just repeat stuff, not all of them do. Simon seems to be making the classic mistake that if lots of bloggers do one thing he doesn't like, then it means no bloggers do stuff he does like. That's a pretty basic logical fallacy that you would think such a "great thinker" on these issues wouldn't make. Fourth, even if many bloggers do just repeat stuff, that can actually be quite a valuable service in spreading the news and getting it more attention. Fifth, what's wrong with adding commentary? Isn't that what Simon himself is doing? Sixth, I think plenty of people would argue that the mainstream press is known for churning up plenty of froth itself. Seventh, aggregators send traffic to sites. People don't acquire the news directly at the aggregator, but through the aggregator. Eighth, it's not a "parasitic" relationship if the sites get something back (such as traffic).
In short, the parasite is slowly killing the host.
See? It's amazing how much he gets wrong in three short sentences. And yet he's the expert?
You do not -- in my city -- run into bloggers... at City Hall, or in the courthouse hallways or at the bars and union halls where police officers gather. You do not see them consistently nurturing and then pressing sources. You do not see them holding institutions accountable on a daily basis.Actually, I do see that all the time. Simon apparently doesn't know where to look. Perhaps it's true that not every city has that going on yet, but that's a huge opportunity for organizations to step in. We're seeing it all over the place.
Why? Because high-end journalism -- that which acquires essential information about our government and society in the first place -- is a profession; it requires daily, full-time commitment by trained men and women who return to the same beats day in and day out until the best of them know everything with which a given institution is contending.First, how often is that actually true of newspaper reporters? Yes, there are some, but there are many reporters who don't actually seem to really know much about the beat they're covering or end up getting played by those they do cover.
But, more importantly, Simon still doesn't seem to be reading the right sites. There are some astounding blogs out there that are full-time jobs, that involve people returning to the same beat day in and day out until they know everything. He seems to once again be assuming that "journalist" can only mean "writes for a newspaper" and not "writes for a blog." It's just a delivery mechanism.
He goes on to repeat the myth that "new media" commentators believe that there is no need for professional journalists. I'm still waiting to find out who actually claims that. Almost everyone I know and read believes there's still plenty of room for professional journalists, but that they may be working in conjunction with others. The idea that jouralism or mainstream news organizations just die off is preposterous and no one is claiming that at all. It's just that they need to adapt, and if they don't, other organizations can and will take their place. Journalism will live on.
Yes, I have heard the post-modern rallying cry that information wants to be free. But information isn't. It costs money to send reporters to London, Fallujah and Capitol Hill, and to send photographers with them, and keep them there day after day. It costs money to hire the best investigators and writers and then back them up with the best editors. It costs money to do the finest kind of journalism. And how anyone can believe that the industry can fund that kind of expense by giving its product away online to aggregators and bloggers is a source of endless fascination to me. A freshman marketing major at any community college can tell you that if you don't have a product for which you can charge people, you don't actually have a product.And... so we're back to myth number 1 at the top of the post. The news business does have a product for which it can charge people: that product is the community of readers it brings together, who it then sells to advertisers. That's always been the business of newspapers for as long as any of us have been alive. Repeating the myth that the newspaper industry is "giving its product away" doesn't make Simon sound smart. It makes it sound like he doesn't even understand the news business.
This kind of poorly reasoned logic is coming not just out of folks like Simon, but out of folks like the CEO of Forbes -- who recently blamed Google in one of the most poorly reasoned and factually incorrect statements around. I'd dismantle that as well, except that Danny Sullivan has already done it.
So one would hope that when Google was asked to present a counterpoint to Congress, it would lay out some of these issues. Unfortunately, the actual testimony (pdf) comes off as rather weak. It basically just says "Google is a friend, we help" but doesn't actually counter the myths and falsehoods put forth by those bemoaning the troubles facing the newspaper industry.
What we're seeing before Congress is a scripted play. It's not a real discussion about the problems facing the newspapers. It's not a real discussion on how journalism will work in the future. It's not a real discussion on the role of the press in the public discourse. It's a big scripted play put on by a bunch of bad business execs who made (and continue to make) bad business decisions, failed to embrace certain opportunities, and are now hoping for a government bailout for all the mistakes they made. They don't deserve it.
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Filed Under: david simon, journalism, newspapers
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Told you
As soon as you hear the words "government bailout" EVERYONE comes rushing to the trough with their sob story.
Where is my bailout? OH thats right, I'm one of the little people. My role is to just pay pay pay more and more taxes to cover other people's shortsightedness and bad business decisions, so they can go back to their multi-million dollar mansions and yachts and live the high life.
Scumbags.
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Re: Told you
get back to work!
these taxes aren't going to pay themselves you know.
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Unions and building cars that no one wants to buy. Who is at fault? Well, the unions and government. Govt. makes them build cars that no one wants to buy (fuel efficient, little clown cars etc.)
Who know owns most of the 2 companies? The govt. and the unions. Do we see a way out here when the biggest owners of the big 2 caused their problems in the first place?
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Re:
I think you've got it backwards there buddy. The American cars no one wants to buy anymore are the gas-guzzling behemoths. GM is shutting down its Hummer division and regretting that it didn't invest sooner in hybrid technology. Toyota and Honda aren't asking for bailouts.
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Which only proves the Hummer is a great vehicle for a war zone (which is what it was designed for).
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Re:
Someone has to stand up and take some accountability. So fine, I'll do it. The auto industry is bankrupt and has not made good decisions because of me. I did not have the capacity to parent these imbeciles and teach 'em how to be intrinsically-motivated, self-reliant creative thinkers. So, since no one else had the time, the audacity, or the balls to try to make a decision, a very large portion of our economy is in despair (since before that Roger and Me movie in 1989, so really this came from out of nowhere).
Good luck, I challenge someone to step up and wrest this position of authority from me. But I don't expect any of you will have the courage to take charge or accountability.
Congratulations on your lack of initiative.
Sincerely,
Your Favorite Hero
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Along time ago, even when newspapers were doing pretty well, my boss told me "A good circulation department breaks even." Something we haven't really been doing all that much of lately.
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Full Circle
Papers were powerful in the past and have the expectation that they are somehow entitled to retain that power, regardless of 'market forces' and demand. It's as simple as that. (See: entitlement)
The Print Media industry has a fantastic opportunity here, if they can focus well enough to see it. A brand-new market has been figuratively handed to them, rife with opportunity and almost infinite scalability.
Newspapers must give up this entitlement complex and focus on it's core value: accurate and timely reporting. When revenue is the sole purpose of your organization, you cannot remain intellectually and strategically stagnant in the marketplace.
The print media has fantastic amounts of name recognition that they can capitalize upon; give the general public a reason to trust you and only you. Make me WANT to visit the AP instead of Joe the Blogger, don't demand that I do. Refocus on being a trusted and respected outlet.
You'll find that once you garner the attention, trust and respect of the 'net-aware' public, revenue and opportunity are sure to follow.
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"It costs money to send reporters to London, Fallujah and Capitol Hill, and to send photographers with them, and keep them there day after day."
I may very well be wrong, but, I am sure that everywhere in the globe, or very close by, there is a blogger, that owns a camera, or a friend that does, and can get where the news is way, way faster. And for a fraction of the money.
I don't have sources to present, but, I'm pretty sure that this is true or very close...
Instead of fighting them, or calling them names, wouldn't it be easier to embrace this, calling those that can write a piece of news, take some photos, do a quick interview, maybe even better then some hotshot reporter that isn't a local and doesn't have the feel and knowledge necessary?
But, well, that would be... smart. LOL
Just my $.02.
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Yes! Actually, I had meant to comment on that, but it slipped my mind. Thanks for reinforcing that point....
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Stupid Papers
Oh, and gov, don't give them a penny, pleaseeee don't throw away more of my tax dollars than you already do every year. Getting kind of tired of it.
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They helped Obama get in...
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Oh yeah and then there's that internet thing. Wow there's some cool things on that there internet.
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I dont get it...
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Re: I dont get it...
It was.
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Holy crap, Mike. You're a hypocrite.
Oddly, David Simon was asked to speak. It's not clear why Simon was asked to speak. He hasn't worked in the newspaper business in 14 years, though he did write a fictional TV show, The Wire, about a newspaper. Somehow that makes him qualified to speak about the industry.
Now, I'm fully expecting you to say that you've never said this, but you did (http://www.techdirt.com/articles/20090320/1150334198.shtml):
when we talk about music, we're told we can't comment because we've never sold music. When we talk about patents, we're told we can't comment because we've never received a patent. When we talk about the journalism business, we're told we can't comment because we've never been journalists. Of course, that's quite silly. It's like saying that no one who isn't an economist can comment on business models, because only economists understand business models.
So here this guy is who worked in the biz 14 years ago, and you're saying he shouldn't be allowed to comment, but you've never worked in any of these industries and you're saying it's perfectly okay if you comment.
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Re: Holy crap, Mike. You're a hypocrite.
Asking a man who hasn't been in the business in the past decade-and-a-half when these problems actually happened to speak about the problems to the government directly is different than writing commentary.
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Re: Re: Holy crap, Mike. You're a hypocrite.
Even then, if Mike is claiming to have some sort of expert insight, but that expertise isn't good enough for Congress, then his opinion is not relevant. We're not talking about his favorite flavor of icecream -- we're talking about multi-billion dollar industries that Mike has no actual experience with.
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Re: Holy crap, Mike. You're a hypocrite.
So here this guy is who worked in the biz 14 years ago, and you're saying he shouldn't be allowed to comment, but you've never worked in any of these industries and you're saying it's perfectly okay if you comment.
No. You misread what I wrote. I'm sorry if I wasn't clear, but I thought I was. I'm not saying he can't comment. He's perfectly free to comment, and I encourage him to keep commenting.
My problem was with the idea that he was invited as one of a very small number of speakers in Congress on this issue as an expert. If it was open mic night at Congress, fine. If he's doing it on the web, fine. He should be encouraged to speak out.
But testifying before Congress is different.
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Faster Horses...
A lesson worth remembering is that at the turn of the 20th century, people had a transportation problem...and the solution turned out not to be a "faster horse"...but a Ford.
And one should note that the Ford didn't arise out of the "horse industry's" R&D efforts, nor the "Horse Industry Revitalization Act" nor the horse industry's attempts to experiment with new Business Models.
I think the future of the media business will look as different as Ford and Toyota's operations look from horse traders and blacksmiths.
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What's historically given value to editorial content is the relative scarcity of distribution versus readers (not the Kindle kind). Newspapers have historically enjoyed natural localized economic monopolies that allowed each of them to exercise monopoly control over the amount of content (and advertising) they allowed into their local marketplace.
Monopoly constraint of distribution and supply will always lead to prices (and profits) significantly above open market rates. Newspapers then built costly organizational structures commensurate with that stream of monopoly profits (think AT&T in the 1970's).
Unfortunately the Internet came along and changed all the rules!
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The dynamics of content replication and distribution on the Internet destroys this artificial constraint of distribution and re-aligns advertising (and subscription) prices back down to competitive open market rates. The often heard complaint of Internet ad rates being "too low" is inverted...the real issue is that traditional ad rates have been artificially boosted for enough decades for participants to assume this represents the long-term norm.
An individual reader now has access to essentially an infinite amount of content on any given topic or story. All those silos of isolated editorial content have been dumped into the giant Internet bucket. Once there, any given piece of content can be infinitely replicated and re-distributed to thousands of sites at zero marginal costs. This breaks the back of old media's monopoly control of distribution and supply.
To paraphrase Nietzsche, "God is dead. God remains dead. And we have killed him with the Internet..."
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The core problem for the newspapers is that in a world of infinite supply, the ability to monetize the value in any piece of editorial content will be driven to zero...infinite supply pushes price levels to zero!
What this implies is that no one can marshal enough market power to monetize the value of content in the face of such an infinite supply and such massively fragmented distribution. Pay-walls, lawsuits and ill conceived legislation won't allow the monopoly conditions to be re-constructed because only ONE VERSION each story has to leak out to start the cycle all over again.
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Another way to think about this is that once data becomes publicly visible on the Internet, its monetizable value rapidly dissipates to zero.
This is at the core of why Google can extract $25B a year from the economy without creating ANY content...what they create is meta-data about content (which CAN be monetized)...and all that meta-data remains non-visible. Only the results of decisions based on that meta-data by their search and advertising platforms is made publicly visible.
The lesson is that Google DOES NOT monetize other people's content...it monetizes its OWN meta-data. This is certainly one path to making the news profitable...not search per se...but various other approaches to the monetization of meta-data that's within the reach of publishers.
So the exquisite irony is this:
In the future, the only content that will have monetizable value is content that no one is ever allowed to read! (i.e. the meta-data)
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There are certainly ways to make online news profitable...and many of us are working to develop such approaches...but I can assure you they don't involve inventing a "faster horse"...
Dale Harrison
dale.harrison@inforda.com
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Of course, the govt. wants them to make even more small cars. With gas prices down again, will Americans buy small cars? Probably not without being forced to.
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No wonder no one can find you...
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Invisible bloggers
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Yep! Just ask Google! :D
> No wonder David Simon (and most of the rest of us) can't find the 'great' local news blogs you say are all around us. That's because the people creating them aren't professional journalists ... We need more journalists, obviously, but we are going to have to pay them, 'cause information may be free but news, the real kind, isn't.
News magazines, like Time, Business Week, and The Economist, seem to be doing well. I'm sure they follow the advertisement dollars business model, but they're examples of news sources that people actually pay for, unlike local news which people buy because they're the only source of local news.
Speaking of local news, I'd posit that local news died long ago, during the days of consolidation. Really, how many of your home town officials do you know? Could you tell me something about each of the candidates on your last home town ballot? Yeah, me neither, no thanks to the so-called "local" news. My own local news will tell you who's state governor and guide you on state propositions, but mostly covers scandals in a larger city nearby. Dunno how you define local, but, for me, that ain't it.
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