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A Nemo blog. Dealing with uncommon cents.

[*NB: The idea of the collapse of newspapers is moving at the speed of light across the 'net. In the hour since I posted this opinion I came across multiple arguments, all very succinct. Here's one from David Eaves - Newspapers' Decline is a Sign of Democracy's Health not a Symptom of its Death. I will attempt to keep this piece updated as the conversation rolls out.]

Jay Rosen on the Huffington Post Investigative fund.

[Latest edit March 29th 12:17PM PST]

Having spent the last decade [at least] discussing the major label recording industry’s supreme mishandling of how its customers embraced the digital music file and how they quickly became savvy internet users sharing those files with millions of other users – basically penalizing the industry for scrapping the single and charging too much for an inferior product, the CD – my interest now turns to the fate of the newspaper industry.

There are some parallels across each of these industry’s woes but it is worth pointing out that the newspaper industry is not being penalized by its customers [readers] for doing anything wrong ala the music industry [weak overpriced product, suing its customers,] rather newspapers are victims of circumstance; technology, shifting reader habits and ubiquitous access in an increasingly mobile world. Unlike the music industry they were not late to the online game even though their initial foot-dragging suggested that like the music industry they would much rather wish the internet would go away.

I must give credit to the labels as I sense that they are beginning to find new routes to profits from music sales. At a recent music industry conference in Nashville I listened to Rio Caraeff, EVP eLabs at Universal Music Group, give the keynote speech. He lamented the loss of the experiential, tactile nature of recorded music when it came in its vinyl form [his father was a famous album sleeve director.] The digital file, he argued, had stripped the experience from the music – listening to music was now a flat and unemotional activity compared with holding a well-designed sleeve filled with images, lyrics and artwork. Because of this flat experience he predicted that there was no future for selling recorded music directly to music fans.

He mentioned one area of success for Universal; the advent of the video game. An all-encompassing experiential medium that included more than just the games – the games came with a community of like-minded people and music. They also generate millions of dollars especially through the subscription fees that are required for online gaming activity.

He also said “the browser is the new iPod.”

So, how does the newspaper industry embrace the browser, what does its “video game” look like?

The first thing that they must do is abandon the old business models as an idea. Those models can not be re-created for the web. As Umair Haque writes on the Harvard Business blog – “companies and investors focused on business models are simply applying yesterday’s obsolete logic to today’s novel problems.” He goes on to point out that nowadays it is about “making something valuable” – “When we can make valuable stuff, there are a plethora of business models to choose from, some old, some new, some untested, some tried and true. When we can’t, no amount of business model innovation can save us from implosion.”

Referring to Caraeff’s contention that the experience around music is what we relate to the most, why is it that newspapers, that are experiential and tactile, are struggling to maintain readership offline while attracting millions of readers online? Maybe it is just that news is not sexy. Or as Haque points out do they need to just keep providing “valuable stuff” and scrap old business models?

Here’s the quandary – newspapers have to shoulder the enormous burden of overhead required to run a newsroom that collects the news in the first place. What is clear is that the online advertising dollars for newspapers are not filling the gap in the loss of revenue that occurred in print editions – just as digital music sales are not replacing the sales of CDs. So should newspapers start to charge for access to their websites?

I have been following the thought leader and writer Clay Shirky via his web site and Jay Rosen, who teaches journalism at NYU, via Twitter. Both of these men have strong opinions about the future of news media, note news media not necessarily newspapers. At the recent SXSW Interactive conference that I attended, Shirky showed the audience a slide that read – the internet is the largest group of people who care about reading and writing ever assembled in history…. A simple and very accurate statement. We have ubiquitous and easy access to more text now than ever; it just needs to be filtered. Which is what newspapers always did for us – as the New York Times masthead proclaims still ‘All the news that’s fit to print.’

Should newspapers be allowed to die? What would replace them?

There have been many arguments about the end of newspapers. Shirky himself has said that “we don’t need newspapers we need journalism.” Jay Rosen pointed out [Edit: Jay Rosen pointed out to me that he's not the source of this info. I'll find out who said this.] recently that there are on average about five major breaking news stories each day in the USA. These five stories are covered by all of the country’s large newspapers. [Can not find the source of this information hence the strikethrough.] If that info is true it seems to me to be a massive waste of a lot of newsroom’s energy – should there be a consolidation or does that create the risk of corruption? [Paul Starr, writing in the New Republic thinks corruption will be an issue.] In an odd twist, David Simon the creator of the TV show The Wire, accuses media owners of contempt and is also fearful of corruption in this interview in the Guardian. It’s worth noting that Simon falls foul of Umair Haque’s ‘it’s not about the business model’ credo…

“Oh, to be a state or local official in America over the next 10 to 15 years, before somebody figures out the business model,” says Simon, a former crime reporter for the Baltimore Sun. “To gambol freely across the wastelands of an American city, as a local politician! It’s got to be one of the great dreams in the history of American corruption.”

Should we just turn to the aggregators and news feeds such as Reuters and AP? And of course to the blogs…

The fear of corruption spins mostly on the axis of believing our government would have nothing to fear if newspapers disappeared and therefore critical journalism went the way of the Dodo. [Although it's worth noting that those critical journalists all seemed to disappear in the run up to the last Iraq war.] It’s a plausible fear but given the advent of so much transparency and open access to information it may arguably be more difficult not less for governments to control the message. President Obama may be the first president in history to have fully embraced the internet during his election campaign and on into the White House but he will continue to be dogged forever by the blogging and tweeting classes throughout his term.

Control is an issue for newspapers today and has been since the early 90’s. Clay Shirky writes in an article Newspapers And Thinking The Unthinkable – “Back in 1993, the Knight-Ridder newspaper chain began investigating piracy of Dave Barry’s popular column, which was published by the Miami Herald and syndicated widely. In the course of tracking down the sources of unlicensed distribution, they found many things, including the copying of his column to alt.fan.dave_barry on usenet; a 2000-person strong mailing list also reading pirated versions; and a teenager in the Midwest who was doing some of the copying himself, because he loved Barry’s work so much he wanted everybody to be able to read it.

One of the people I was hanging around with online back then was Gordy Thompson, who managed internet services at the New York Times. I remember Thompson saying something to the effect of “When a 14 year old kid can blow up your business in his spare time, not because he hates you but because he loves you, then you got a problem.” I think about that conversation a lot these days.”

Rather like the music industry the newspaper industry is faced with multiple problems on many fronts – shrinking readership, ad revenue dropping and a public who feel that information should be free. Perhaps the answer rests with the idea of hyper-local news; news that is directed to people at the zip code level, news that has hyper local resonance to readers. Jay Rosen may be heading in this direction as I noticed that he is tweeting a question – How Many Homegrown News Stories Are In Your Daily Paper?

My city of Portland has two newspapers – The Oregonian that carries national stories often sourced via AP or the NYT as well as local reporting, and The Portland Tribune, a freesheet that remains hyper-local. The Oregonian is in the unfortunate position of not having its own web site, its news is buried in amongst a site called OregonLive.com yet The Portland Tribune, a smaller and perhaps more nimble operation does have a web site that is kept up to date with only local news. Both of these papers will have to contend with Yelp or Outside.in as well as other hyper-local web sites that directly compete with them for bringing up to the minute breaking news at the zip code level. I suspect that only one of our local papers can survive.

If both of my local papers are searching for monetization through jiggling the business model they will surely fail. Let’s go back to Umair Haque and his idea of new ideals based around scrapping business models:

“Monetizing” + “business models” = zombieconomy. The reason monetization is a dirty word is simple. It blinds us to value creation, at the expense of value capture. When we seek to monetize, we end up chasing the same old lame competitive advantage. I win, you (and you, and you) lose. Put another way: “monetizing” toxic junk — from CDOs, to Hummers, to McMansions, to Big Macs – is how we got into this mess.

It is by rediscovering how to make stuff that’s not toxic junk in the first place that we’ll get out of the mess lame, evil, brain-dead 20th century thinking has left us in. That’s the challenge of a new generation of revolutionaries. And it’s not about new business models: it’s about reconceiving authentic, deep, value creation.”

Finally I’ll end with another thought from Clay Shirky – “When reality is labeled unthinkable, it creates a kind of sickness in an industry. Leadership becomes faith-based, while employees who have the temerity to suggest that what seems to be happening is in fact happening are herded into Innovation Departments, where they can be ignored en masse. This shunting aside of the realists in favor of the fabulists has different effects on different industries at different times. One of the effects on the newspapers is that many of their most passionate defenders are unable, even now, to plan for a world in which the industry they knew is visibly going away.”

Other references:

Clay Shirky’s blog

Jay Rosen’s blog

Follow Jay Rosen on Twitter

Jay Rosen on mindcasting.

Umair Haque – Video presentation on Ideals

Uncle Sam The Newspaper Man

David Eaves – The Death of Journalism? [Or journalism in the Era of Open]

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Trevor Graves
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Tags: Clay Shirky, David Simon, Death of newspapers, Jay Rosen, NemoHQ, New York Times, Portland Tribune, Rio Caraeff, The Guardian, The Oregonian, The Wire, Umair Haque, Universal Music Group

This entry was posted on Saturday, March 28th, 2009 at 12:03 pm and is filed under Nemo Design, Opinion, Technology, Thinking. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.