What really happened that caused traditional media to shrink so much over the past decade – and why are so many still struggling to come back?
That’s the subject of this presentation, which I’ve given several times over the past few years.
Tag: journalism
Names make news (2.0)
Two years out of college, as a young reporter for a business weekly in Upstate New York, I met the crusty old publisher of the Pacific Business News – a business journal in Honolulu. I didn’t like him much. I was idealistic and ready to change the world. I was living in the snow belt and learning how businesses work. I was reporting on Michael Milken (a Master of the Universe, the junk-bond king, deal-maker supreme) and leveraged buyouts. I was writing about how empires were made, how old cities were rebuilt, how capitalism made the world turn.
This old guy, meanwhile, was living in paradise and frustratingly pragmatic. Standing before a room full of wide-eyed people like me, he was asked to dispense some advice to us young guns. After something like 50 years in business, you know what he came up with?
“Names make news,” he said. That was it.
To look at his newspaper was to understand how this pedestrian philosophy played out in the real world. While it has been updated over the past 25 years to get ahead of changing times, the product I saw that day was gray and cheap. Articles were short, reading as if written by flacks and hacks. Every person’s name that was mentioned – there were a lot of them – was bold-faced. Some articles seemed concocted for the specific purpose of highlighting a large roster of names.
I was unimpressed. I promptly forgot that old publisher’s name and promised myself I’d forget his tired old advice too.
What I discounted was his experience. He’d been running the same publication for something like 50 years. It’s possible, I now realize, he had learned and discarded many other truths along the way – distilling his success into one rule of thumb that fostered success for his product in his market at his time.
Names make news.
I never did manage to forget that advice. While it’s not the only rule I’ve lived by over the years, I’ve had many occasions to apply it, and it has never failed me.
It came back in a rush this morning when Seth Godin’s most recent blog post came through my e-mail. Seth is a marketing guru; he dispenses more good advice in a week than many of us dispense in a lifetime.
Seth’s advice on the subject doesn’t come across like that of a crusty old publisher marking time in Hawaii. It’s contemporary, directed at social media marketers, online journalists, bloggers – would-be masters of the new digital universe.
But it’s equally concise and to the point. When people look at photo albums, he says, they go directly to pictures of themselves.
He writes:
Knowing that, the question is: how often are you featuring the photo, name, needs or wants of your customers where everyone (or at least the person you’re catering to) can see them?
So listen up Internet 2.0ers. Your self-indulgent rants, your complex business models, your highly-designed user experiences are all well and good. But as media change, some things don’t. Names make news. They always have and they always will.
Image courtesy of graur razvan ionut; FreeDigitalPhotos.net
A bit more on the royal nuptials
The royal engagement and authenticity in the media
Why do the breathless reports of Prince William’s engagement to Kate Middleton have such a negative impact on me?
I have no ill will toward the couple; they are charming, attractive and – considering the circumstances – appear humble and likeable. In England, where the royal family is some kind of national treasure, I might understand such over-the-top, second-to-second pursuit of each detail as they proceed toward a royal wedding.
But here in America, Will and Kate are not our own; interest in their nuptials strikes me as being borne of respect for our longstanding relationship with England as a friend and ally. Does it require sending squads of journalists to stand outside the gates of Buckingham Palace to get weepy and about the storybook nature of their love?
Simply: No. It doesn’t have the same meaning in England and America. There it’s a fairy tale; here it’s a pleasant news item. The mass media’s effort to transport the fairy tale aspect of it across the ocean and across cultures is not reporting; it’s editorializing.
It’s not journalism; it’s distortion. And it’s part of that problematic blurring between news and entertainment that seems to have infected all for-profit media.
What’s the economic value of a journalist?
Journalists are historically thick about the notion that they are part of a business model; that they are employed not so much for the public good but because somebody has figured out how to make more money from their work than it costs to produce. That thickness is part of what makes them good at what they do; good journalists tend to follow the trail of information regardless of how they fit into someone else’s profit motive. It’s also why the outsider complaint — “The reporter only wrote that story to sell papers” — never gets any traction.
But the business model under which most journalists have always worked is under attack right now, and that’s changing the very basics of the job: who wants to hire them, what the job requires, and how much it pays.
In recent good times, a newspaper would bring in about $1.35 in revenue for every $1 spent to run the place. That includes such inelastic expenses as distribution and printing. If you eliminate those expenses from the equation (which an economist wouldn’t do, but this is a journalist-centric view, in which the value of a newspaper to its readers and advertisers is directly proportional to the quality of its reportage) then the economic value of a journalist is at least 1.35 times salary and benefits.
But in times like this, newspaper profits are down — which means the economic value of journalists is down too. The work of the newsroom simply produces less profit so, therefore, the value of each person in that newsroom is less.
Media companies deal with this as any business would: When profits drop, you reduce costs. Most media start with manufacturing: production, printing and distribution. (Tips for reducing production costs; 34 tips for cutting costs; United Media cost-reduction strategy.)
But when profits continue to drop, people start to lose their jobs. And despite what journalists like to think about their value, cutting reporters and editors usually stops the bleeding pretty quickly. That’s because producing news isn’t the same as producing, say, cars or other manufactured goods.
If you cut people from the auto assembly line, you can’t make as many cars. Which means you can’t sell as many cars. In a recession, that’s OK because fewer people want to buy those cars anyway; jobs get cut because there’s an imbalance between supply and demand.
But in media, you can cut an untold number of reporters and editors without actually reducing output (Journalism jobs decrease 34% Jan 08-Jun 09). The quality of the reporting might suffer; graphics might not be as well thought-out; typos and errors may increase. But the audience still gets the same quantity of news, and the advertisers still get the same audience.
When a recession ends, a car manufacturer can’t sell more cars unless it hires back workers to increase production. But a newspaper can see advertising revenues increase at the end of a recession regardless of whether it puts more people back into the newsroom. That’s why financial and spreadsheet types like investing in media; the correlation between employment and profit is indirect enough that they can choose to ignore it.
This can go on for a long time, and it has. Eventually, people start saying things like, “That newspaper is just a shadow of its former self.” And any rational explanation about declining profitability should include the long-term effect of decreasing quality and comprehensiveness.
But that’s simply not the entire reason newspapers, magazines, radio and TV are struggling; I’d argue it’s not even a major factor — just a bad symptom.
The real reason is competition. Years ago, a major metropolitan morning newspaper’s only competition was the afternoon paper. (Remember, the competition isn’t for readers; it’s for advertising revenue). Then came radio, television, cable television, city magazines, alternative weeklies, etc. They may all serve readers differently, but their money comes from the same pot of regional advertisers. More recently, add Google Ad Words, online magazines such as Slate and Huffington Post, bloggers like Matt Drudge, social networking like Facebook and Twitter, and dozens of other business models I can’t even think of. The one thing all of these have in common is that they demand a piece of the same marketing budgets that are the financial foundation of newspapers.
Many of these newer organizations pay journalists — but none pay as much for as many journalists as did the old-line media. So not only do newspapers have more competition, journalists have more competition.
All of which is a roundabout way of saying I’m not patient enough to calculate the actual economic value of a journalist. But the following items seem clear:
- Economic value and social value are separate issues.
- Traditional media still seem to be experiencing declining economic value of their journalists. For example:
Effect of mass layoffs at newspapers
New news models
Bloodletting in the newsroom
Layoff tracker - Meanwhile, types of businesses that didn’t previously value journalists now seem to be the places where the value of journalists is growing. For example:
This is what you get when you pay for reporters
The growth of brand journalism
Best job in the world
Attention corporations: Hire a journalist
Winery hires lifestyle correspondent - Entire business models that do away with the cost of journalists are emerging — and starting to attract big money. For example:
Examiner.com buys NowPublic for $25 million
www.heightsobserver.org
www.printcasting.com - Old business models are trying to revive the value of journalists by finding other revenue streams to pay for them. For example:
How newspapers that charge for content are faring
Murdoch charges for content
Electronic newspaper update
Non-profit newspapers
AP battles with news aggregators - Old-line business models that see the industry’s decline as merely a function of journalism’s decline somehow seem angry and not very realistic.
Our Hometown News, Strongsville, OH - The decline in value is related to the recession; when recovery starts in earnest, the decline will flatten out.
Cox Enterprises hopes for positive earnings - But the decline in value wasn’t caused by the recession; it was caused by huge disruption of traditional business models that involve journalists. For example:
- Journalists may be unwilling participants in the dizzying changes taking place. But those who are determined to make themselves valuable will succeed — whether or not it’s through a traditional channel.
What journalism students need today
Listen up, old-school journalists
The future of news is scarcity - I’m pretty sure the economic value of journalists isn’t declining; it’s declined among media that follow traditional business models, but that’s being offset by new models and innovations that are only now starting to emerge.