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Publishers Don’t Have the Solutions

May 20, 2009 By massmarrier

I don't believe that newspapers as we know them will be essential for newsgathering to continue. Replacement with new, more nimble organizations is likely if papers implode.

Over at Marry in Massachusetts, I have a two-part rant on this, here and here. As a former newspaper and magazine guy, I get emotionally as welll as intellectually involved in such matters. Those posts are a bit long and wordy for here.

A key implication of the big issue though is that newspaper owners and editors as welll as investors and would-be providers are looking and waiting. They want a genius to provide the right answers to the questions of:

  • How do they turn a profit from online news delivery?
  • How do they also justify paying new gathers and analyzers?
  • How do they get enough verifiable readers to recapture ad revenue?
  • Can they construct a micro-payment or subscription model as easy and attractive as iTunes?

 A challenge thrown out to a recent conference of journalists I attended was that the someone at least needed to figure out how trained journalists can make a living online. Lucy Dalglish of the Reporters Committee said the person who figures that out will have fortune and fame. 

Newspaper bigshots have been like Pooh. Think. Think. Think. Yet they may not be the bears to find those answers. 

I'd welcome flashes of brilliance on these from BMGers.

Please share widely!
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Filed Under: User Tagged With: advertising, micro-payments, national, newpapers, reporters, revenue

Comments

  1. jimc says

    May 20, 2009 at 11:14 am

    That is one of the more interesting ideas I’ve heard. In the short term, of course, it would be a minor cataclysm, flooding us with Britney Spears news. But if the serious reporters could hold on for a month or so, I’d be willing to bet there would be a steady, reliable market for serious news.

    <

    p>Count me in.

  2. noternie says

    May 21, 2009 at 12:21 pm

    You’re snarking at newspaper publishers is cute and fits a certain stereotype, but I don’t think it’s accurate. Newspapers were some of the earliest users of the internet that I recall, aside from companies using it as an extension of their “branding campaigns” (PepsiWorld comes to mind) or individuals using them the way blogs are used now.

    <

    p>While they aren’t at the cutting edge all the time, I think they’ve all tried to adapt to the introductions of blogs, Twitter, etc. They haven’t been waiting, in my mind.

    <

    p>Papers have also tried to use online subscriptions to support the newsgathering operation. That met with great resistance each time and was usually ended pretty quickly. Too quickly, in my mind. I think Murdoch is right that paying for news wherever it is is the only model that could work.

    <

    p>Dan Kennedy may be able to cite examples, but to my mind there aren’t any if many online only operations that have been able to both produce consistent professional level journalism while also paying the bills. But I think that’s as much a function of the market as the efforts of publishers.

    <

    p>I think the answers have not been found because they may not exist. For years–before the internet was commonly used by the public–newspaper subscriptions and viewership of local and national news waned. The business has tried to chase the audience in ways both good and bad. We have more immediate news, but we also have much more sensational, shallow news. Often news that has no relevance to its audience other than curiosity.

    <

    p>I fear the better elements of the business have or will go away permanently on a large scale and it makes me sad. But I don’t lay that entirely on the business itself any more than I blame the healthy restaurant for going out of business while the McDonald’s next door thrives.

    • somervilletom says

      May 21, 2009 at 1:42 pm

      The “healthy restaurant” versus “McDonald’s next door” is a false dichotomy. The hard-copy newspaper business is not “healthy”, nor does it necessarily even offer “healthy food” (see the Boston Herald and New York Post). The alternative is not a “McDonalds” — in fact, we don’t even know what the alternative is.

      <

      p>Perhaps a more apt dichotomy is between “Bill’s Fresh Corn Diner”, a restaurant offering fresh sweet corn in the midst of thousands of acres of haphazardly-fenced cornfields, and a group of new farmstands.

      <

      p>The restaurant has been the only game in town, and makes sure to tell all its patrons about the hazards of buying “un-inspected” and “uncooked” corn. The restaurant owners are careful to plaster the walls and menu with posters describing the horrible fate that befell John and Martha who suffered food poisoning after they ate corn they bought at a locally-infamous farmstand long known for selling stolen and often adulterated cow-corn.

      <

      p>The restaurant patrons have discovered that they don’t need to buy pre-cooked corn at the restaurant, and — even worse — they’ve discovered that the corn they are served is actually several days old and has been for years. Rumors start to circulate that some of Bill’s corn dishes even use frozen and canned corn. Some of the patrons have actually paid a farmer directly, and eaten ears of corn that they watched the farmer pick and bring directly to them. They told all their friends “I bought the most amazing corn yesterday, it’s NOTHING like I’ve been getting at Bill’s.”

      <

      p>Some of the farmers start to talk among themselves about the way that Bill’s has been forcing down the price of corn for years. A few of the farmers have even whispered about opening their own farmstands, but they don’t want Bill’s to find out because they still need the business.

      <

      p>What’s the point of this little fable?

      <

      p>Everybody knows that the farmers have to be paid for their corn somehow — and the world has figured out that maybe a farmstand is a better option for them than a restaurant. They don’t mind cooking their own corn.

      <

      p>The patrons get better, fresher corn. The farmers may well get a lot MORE money because farmstands can sell corn at lower prices than the restaurant (they don’t have the overhead) and still pay the farmer more for each ear. It’s a lot easier to open a farmstand than a restaurant, so the entire corn market might get a lot bigger.

      <

      p>Meanwhile, some patrons will still want to buy at restaurants — but perhaps not at “Bill’s Fresh Corn Diner”. It’s true that lots of the current employees of Bill’s might have a tough time for awhile; many of them have been shucking corn for Bill for years. There will surely be lots of heartfelt and sincere sympathy felt in town for the looming demise of Bill’s.

      <

      p>The bottom line is that the corn farmers and corn consumers might well end up in MUCH BETTER shape. Lots of new farmstand owners will prosper. The farmers will buy more combines to keep up with the increased volume, and the local consumers will rave about how much better truly fresh corn tastes.

      <

      p>I don’t think any of this will have any impact at all — up or down — on the local McDonald’s franchise.

      • noternie says

        May 22, 2009 at 11:14 am

        Whether it’s served in one of many restaurants (I assume Bill’s is the only one because the other places failed) or through a farm stand (I assume Bill has one of those, too) owned by one of many different owners, I don’t think as many people want corn grown in a field.

        <

        p>I think people are selling burgers because they taste better to people than corn. And maybe they prepare them in accordance with all the health codes, but burgers aren’t corn. They just don’t provide the same health effects that corn does.

        <

        p>Can small farmers make and sell corn as well as the big boys? Sure. Who said they can’t? Can they make enough money doing it? I don’t know, I haven’t been to Iowa lately.

        <

        p>My problem is that it’s much easier for someone with a vested interest to fool you into thinking you’re getting news when you ain’t than it is to fool a corn eater. i’m not saying the NYTimes is perfect, but you something closer to impartiality there than you do with “Bill’s Blog,” when you know nothing about Bill.

        <

        p>Yes, you can verify and cross check, but that’s adding an entirely new level to a news reading process I don’t think people are going to like. After all, they really wanted a burger in the first place, anyway.

        • somervilletom says

          May 22, 2009 at 12:25 pm

          I guess we’re all just speculating until we see how it plays out. For people who really do want burgers, McDonald’s might be good enough — they’ve put more than one private restaurant out of business. I don’t like it, but that’s the way the market works.

          <

          p>I wholeheartedly share your concerns about vested interests, cross-checking, source validation, and all that. My own intuition is that the market will grow independent solutions for those, and that online publishers will end up buying those services from independents.

          <

          p>I think the change that is unfolding is from a monolithic model, where all those functions are performed by one really big company (like NYT), into a decentralized model, where the same functions are performed by a distributed network of lighter-weight independent suppliers.

          <

          p>There are certainly advantages and disadvantages of each. It seems to me that the undeniable reality is that the current monolithic model is optimized for moving hard-copy, and the newspaper medium is similarly optimized for the printed page. For better or worse, the audience has shifted to online delivery. The distribution model is different, and the medium is different.

          <

          p>It seems to me that the question before us now is which organizational paradigm (monolithic versus decentralized) is best suited to meeting the desires and demands of the audience of today and tomorrow.

          • noternie says

            May 22, 2009 at 2:05 pm

            Call me condescending, but the market left to it’s own devices makes me worry that we’ll end up with a nation full of too many McDonald’s and not enough farm stands. Which means the figurative here will follow the literal. And dumb puts our nation at greater risk than fat.

            <

            p>The decentralization, to me, means the watering down of standards, because they won’t be reviewed. You allude to a model where larger aggregators would weed out the sloppy or overly biased stuff. But that’s not far from the monolith just making everyone independent contractors or freelancers.

            <

            p>I don’t think the format really makes a difference. I guess I tend to think the institutionalized model in this instance ensures greater reliability. At least known slants, when they exist.

            <

            p>People can’t gather the news they want individually. And it’s almost just as hard for them to seek out and verify providers when they’re decentralized. And how do you make it profitable on a smaller scale?

            <

            p>Am I advocating Wal-Marting the news? Maybe. But I hate Wal Mart, so I’m flexible on the news model.

            <

            p>My biggest concern is that the serious news business will disappear. It already has to a large extent.

            <

            p>Returning to the “publishers are waiting” I still think that’s an unfair characteristic. If there were a way to reverse the decline in readership and profits, why would they hesitate? They are capitalist, publicly traded businesses after all, as the NYTimes has so forcefully reminded us.

            • somervilletom says

              May 22, 2009 at 6:11 pm

              You wrote (emphasis mine):

              Returning to the “publishers are waiting” I still think that’s an unfair characteristic. If there were a way to reverse the decline in readership and profits, why would they hesitate? They are capitalist, publicly traded businesses after all, as the NYTimes has so forcefully reminded us.

              <

              p>If you include online page views, readership is not declining. The market has already voted with its eyes (as opposed to their feet): the market is turning to online news delivery.

              <

              p>This means the publishers have to make an enormous, gut-wrenching change — thousands of jobs, enormous amounts of capital invested in physical plant devoted to hard-copy production, and so on. I think their stockholders would kill them if they moved quickly. I think, instead, that they are waiting to see a solution emerge. I think the question is whether they have the resources to wait it out — and whether they’ll be able to make the transition once the outcome becomes clear.

              <

              p>I invite you to consider the example of the American steam locomotive industry. Giants like “Baldwin” and “Alco” certainly saw the diesel revolution coming — and were destroyed by GM. ALCO, in particular, attempted to shift into the diesel business. They were too late, and failed.

              <

              p>I don’t think you’re “condescending”, at all — I share your concerns. I enthusiastically agree that “dumb puts our nation at greater risk than fat”.

              <

              p>Regarding your concerns about the decentralized versus monolithic model, it appears that the decentralized model works far better than the monolithic model for topics that change quickly. Consider, for example, “RNA interference” — a relatively new (1998) topic in biochemistry. I invite you to compare the Encyclopedia Brittancia treatment of the topic to that of Wikipedia.

              <

              p>Both approaches are imperfect; it seems to me that the question is how responsive each approach is to handling the concerns you raise (source bias, reliability, cross-checking, etc).

              <

              p>I hate WalMart as well. On the other hand, when my wife and I wanted an affordable glass-top outdoor patio set, the WalMart set (at $199) was way way more suited to our needs than anything we found at any of our local merchants.

              <

              p>I am, perhaps, more optimistic than you about the “serious news business”. I think the demand is there, and I think our capitalist economy — for all its flaws — is better at discovering how to best meet that demand than any of the alternatives I’m aware of.

    • massmarrier says

      May 21, 2009 at 3:38 pm

      I, in contrast, suspect that there are viable solutions. However, I also think they will not emerge from the existing newspaper management and ownership.

      <

      p>That’s pretty sad that otherwise bright people can’t diagnose and treat their own problems. Newspapers aren’t alone in that though.

      <

      p>Two powerhouse financial papers – WSJ and FT – are in the midst of testing models. Yet, unlike what seems to be coming out of city dailies, they don’t fantasize that capturing money by converting online readers to paid online readers will be their economic salvation. Newspapers have almost all hoped to break even on distribution by any method. They didn’t pretend that would be their main income source.

      <

      p>Unfortunately, the WSJ and FT are not typical of hard news. They have valuable info that people will pay to read. Many need the stock and other trends relating to finance info. Readers see the price of those papers are investments.

      <

      p>So, while city dailies are reducing the amount of new, unique or at least distinctive content, they suddenly want online readers to pay for this wan and diminished material. That’s not sensible marketing or customer satisfaction.

      <

      p>Those micro-payment or online subscription models won’t work unless they cough up content that readers feel they need or want badly enough. That’s why it may well take new owners, possibly even groups of displaced journalists to manifest the new pubs. They also wouldn’t have to own presses or fleets of delivery trucks. If they can spend their money on news gathering instead they might make a go of it.

      <

      p>I bet on a combination of new payments and new owners. We know the old system is badly broken.

      • somervilletom says

        May 21, 2009 at 4:45 pm

        You wrote:

        That’s why it may well take new owners, possibly even groups of displaced journalists to manifest the new pubs.

        <

        p>Exactly.

        <

        p>There are lots of excellent journalists being starved today, while the market they serve is exploding. The hard-copy newspaper biz serves to depress their wages and limit their ability to be read. This is because a significant share of the value the journalists create is being siphoned off to pay the costs of the enormous number of people dedicated to moving paper around (not to mention the executive bonuses and compensation).

        <

        p>The market wants news — and they want it online. The journalists want to provide news. The market is willing to pay (directly or through advertising) for news. The journalists are willing to work hard (they already do).

        <

        p>Of course, all this is just blowing smoke until those of us who feel this way — and have the chutzpah to act on it — demonstrate a better model. That’s why I’m not commenting as much these days — I’m busy trying to get something like this going.

  3. ryepower12 says

    May 22, 2009 at 6:26 pm

    about the Globe going away.  

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