A news business with a future after all

Week of Dec. 7, 2009

Because I don’t have enough misery in my life, I decided last week to see how much I could take of the two-day Federal Trade Commission symposium in Washington with the somber title, “How will journalism survive the Internet Age?” The media circuit offers a generous number of such open-casket affairs, but the turnout for this one looked stellar, so I settled down at my desktop and clicked in to the video feed, ready for the wailing to begin.
And it wasn’t like that at all. On the contrary, although the 70-some journalists, academics, analysts, financiers, flacks and entrepreneurs didn’t agree on much, they had in common a quality of thought and depth of commitment that couldn’t fail to impress.
Headliners included Rupert Murdoch, multinational news mogul; Arianna Huffington, online diva; Leonard Downie, ex-editorial chief of the Washington Post; Jeff Jarvis, prophet of entrepreneurial journalism; Paul Steiger, head of Pro Publica, the investigative reporting startup; Steven Brill, who’s about to launch an innovative payment system; Robert Picard, an eminent media economist, and Josh Marshall, whose Talking Points Memo is one of the rare online news sites that’s both solid and solvent.
To be sure, there was the familiar litany of woes that have pushed the legacy news industry down a steep slope toward financial ruin and civic obsolescence: its ravaged advertising base, reader melt, staff and coverage cutbacks, extravagant acquisitions that crippled profitable operations with debt, a ready availability of free online alternatives.
Still, there was recognition that the winds of change that are blowing their roofs off are, to a great degree, modernizing ones. Those cloudless days of bottomless profitability were the product of industrial privilege that nobody would applaud as socially optimal: Traditional newspapers and local TV network affiliates owed their larcenous profit margins—and their teeming newsrooms—to the monopolies and near-monopolies they wielded, and to the reality that their audiences, and their advertisers, were starved of choice.
Suddenly, thanks to the Internet and the explosion of digital technologies, barriers to entry have been leveled and distribution costs slashed to zero. Anyone with a laptop and a WiFi has instantaneous access to more information than the entire Washington Post newsroom back when Nixon was facing impeachment—and can reach a vastly larger audience too.
The upshot: As one speaker noted, all those enormous fixed costs (printing presses, delivery fleets, broadcast transmitters) that once kept rivals out of the water are now, for legacy news organizations, little more than an anchor around their neck.
So now what? Paradoxically, the person at the workshop with the greatest business success in the online world was also the one with the most conventional answers. That was Rupert Murdoch, chief of News Corp., whose Wall Street Journal online operation has more than a million paying subscribers. His solutions: Invest in journalism, then invest some more; charge readers what your content is worth; keep government at bay (that, a rebuke to calls for media-friendly changes in tax laws and antitrust rules.)
And move aggressively against those who help themselves to your content, the reviled news aggregators. By that he meant both the mammoth search engines like Google and Yahoo and the purpose-built news sites that post digests and steer readers to where the news originated, such as his papers. What the aggregators do, he says, is “theft.”
This is key. Contemporary thinking about the future of journalism divides fundamentally over the question of whether online news is, or can be, owned and sold. And I’ve come to conclude that although in some cases it can—when the information is unique, time-bound or especially valuable—the overall reality is that technology has kicked down the door of the proprietary model. News will be publicly available, either in original or derivative forms, even to a public that doesn’t pay for it.
As Arianna Huffington, whose Huffpost.com relies on unpaid contributors, put it, “Free content is not without problems. But it’s here to stay, and publishers need to come to terms with that…”
And that, it seemed clear, is where the fun starts in the new news industry—in coming up with allied informational offshoots that are worth top dollar (ask newsletter publishers); in building fresh sources of cross-subsidy by creating affiliated profit centers to replace ad revenues which, even with robust online growth, will never match the treasures of the lost kingdom; in collaborating with the emerging generation of journalism irregulars who hunger to carry on traditions of civic engagement through public reporting and commentary.
So it wasn’t quite the funeral I expected.

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