Monday, May 18, 2009

Thoughts on the death of newspapers

Yesterday, I attended a great panel/workshop at Philanthropy New York, an organization of foundations and other philanthropists, on the future of the newspaper. It was titled "Internet to Newspapers - Drop Dead" but that was just the lead, teasing you in for a good discussion. The panelists were a pretty smart bunch -
  • Steve Coll, President of New America Foundation, and a staff writer at The New Yorker magazine
  • Nicholas Lemann, Dean and Henry R. Luce Professor, Graduate School of Journalism at Columbia University
  • Victor Pickard, Senior Research Fellow, Free Press
  • Vincent Stehle, Program Director, Surdna Foundation (moderator)
Although I hope they don't represent the future of newspaper's diversity as a bunch of white men (sorry, but this is an ongoing problem on these panels), I do think they had good thoughts on the future. Two of them are well respected journalists, one a leader of a big journalism school, one a leading researcher on the field, one whose organization cares greatly about the future of democracy and one who helps support all of this as a funder and advocate. The audience was a great mix (and relatively diverse) - with journalists, heads of major foundations, heads of newspapers and community leaders, so the discussion was pretty good.

Essentially, everyone seems to agree that good journalism is important to our civil society and to democracy and that it needs to exist. No one seemed to really care if that takes the form of an actual newspaper, or some new type of news organization although it seemed many in the room still like print, they're pretty much over it if need be. There's also pretty general agreement that the model of newspapers is failed. I don't think I have to summarize any of these arguments, as that's all pretty self-explanatory.

What no one can agree upon is a solution, or whether the current solutions being proposed are worth much. The most comprehensive look at possible solutions just came out last week as a report from the group FreePress and is available here as a PDF. I think it's worth a read, because many of the struggles of news organizations are the same as those faced in film. One newspaper owner in the room said that while all media is suffering, the death knell at newspapers is palpable, to which I responded that these fears are just as palpable in the film world, we just don't get to write our own news about it.

While I am greatly simplifying the possible strategies, they seem to boil down to these (mainly from the report, but some from in the room):

1. Allow new ownership structures - this would mainly allow newspapers to become nonprofit organizations and/or low-profit L3C alternatives. No one was saying that every paper should be a nonprofit, but rather that in all other media we have a mixture of both, commercial and non, for profit and non and the tax code needs to allow for this conversion in newspapers. There are some good models already, my favorite being the newspaper I grew up with, the St Petersburg Times owned by the nonprofit Poynter Institute. This would allow newspapers to get certain tax breaks, receive donations and foundation grants, etc. Many people seem to favor this model, but I am not so sure (see below). Senator Benjamin Cardin has introduced a bill that would allow this, so it's getting some traction.

2. Have the government subsidize newspapers. The government would give tax breaks and direct monetary support to the sector. This would recognize their value to our government. While this has big problems - how free would such a press be to report on said government, etc - it's being heavily promoted now and is being seriously considered. It's worth noting that government support isn't actually new - the press has been subsidized in the past, and continues to be - free airwave spectrum to broadcasters, reduced postage for mailings, etc.

3. Give incentives for divesture - this essentially means that you'd encourage local ownership, diverse ownership, and other new structures through structured bankruptcies of dying media. They may actually consider it, because the owner's shares are becoming worthless;

4. Put up a pay wall - The ongoing call for this is ridiculous, but so often repeated that I must address it here. The idea is that you'll pay a subscription or micro-payment for newspaper content. While many are skeptical this will work at all (and the Free Press report addresses these arguments well), it will definitely only work if every newspaper/print/online news org does it at the same time. This means they'll need antitrust exemptions. The newspaper owner in the room felt that nearly every paper could be saved "if only people were charged and would pay a fair price." Yep, that's exactly the dilemma... and thus far nothing has worked.

5. Fund journalism training - Train journalists better with more funding, whether they are writing for a big media company or a little blog;

6. Create an R&D fund for journalistic innovation -this idea is one I like. Essentially, government and foundations, etc would invest in experiments in new models. One major, very major, journalis funder in the room confided that he's tried to get traditional big media companies to experiment, with their underwriting, and none would do it, they're just too resistant to change. But such a fund would allow for more experimentation, and lord knows we need some new models, so this idea is great;

7. Fund new public media - transform public broadcasting by greater investment, so you ensure a robust journalistic environment. No one thought public media was doing a good job, but all thought there was a chance for some improvement.

I was not so sure any of these answers will work. My frank assessment, which I shared with the group is that if these are the best ideas we can come up with for journalism, then perhaps we should let them all fail and just invest in the new folks coming up with supportable models. As someone who runs a nonprofit, I can say that the nonprofit model is seriously broken - I continually preach that what we need more of is for-profit/nonprofit collaboration and thinking, mixing the best of both models. So sure, let's explore some hybrids, and thus the Cardin bill is a good first step, but to think that becoming nonprofit will solve your woes is wrong. If your underlying business model - using news as a way to sell cars - isn't working, then you will just as surely fail as a nonprofit as a for profit. Nonprofits also must make money, they just don't give it back to shareholders. And in case you haven't noticed, foundations are struggling so don't count on them for a bailout. On top of that, there's plenty of bad management in nonprofits, so that won't solve your management problems. Nonprofits must also raise lots of earned income - many now bring in more than 50% through sales - of tickets, tshirts, cookies, etc. So, newspapers will still need to earn a profit from some form of sales (although perhaps ancillary items, not news).

I also don't think going to the government will work so well right now. If we think of the government as the representative of the people, then you've got a lot of funders/public who think that journalism failed them recently in the lead-up to Iraq, and the lead up to the financial crisis, etc. There may be good journalism and journalists out there, but try telling that to a general public that usually rates journalists as just barely above Dick Cheney in the admiration and trust columns. Seriously, passing this by the American public won't be easy. Not to mention all those freedom of the press worries, etc. So, we should try some government subsidies, but only if they support really innovative strategies, not the status quo.

This public support will also lead to a very real question - if good journalism is so important to our democracy, important enough for the taxppayer to help foot the bill through taxes, tax breaks, etc then why do you want me to pay for it twice by then paying a micropayment or subscription? Not that I will, or that anyone likely will, but there goes that business strategy. But this is the real kicker of the whole debate - payment. Real news gathering (not the opinion pages, and the like) is expensive to produce and someone has to pay for it. The industry keeps saying the public must pay, but sorry folks, as much as we want micropayments and subscriptions to work, they just don't.

Advertising has fallen, and it may not even work very well, but this is capitalism babe, and it ain't disappearing altogether. And while people may not pay for your content the same way as before, at the same levels, they will pay for very valuable content. What's becoming increasingly clear is that journalism can survive, and even a new version of a newspaper, perhaps a news organization that uses multiple delivery mechanisms, but it may not make enough to keep a small monarchy system in place. I know that in my field, film, I could easily spend very little money and hire some of the best film writers out there and within months put the leading industry publications out of business just by being more nimble, having low overhead and by being willing to experiment more. I don't have time for that, but someone will soon. The "big media" in film, Variety and Hollywood Reporter, just can't get it right, and have bloated costs from their legacy models. If you can do this in one industry, I'm sure you could do the same for international news. Yes, you'd face the eyeball problem - getting the eyeballs that a New York Times has, but look at how quickly eyeballs have accumulated on many a start-up from YouTube to Twitter. You don't need a printing press, don't need a fancy new building, don't need a subscription team bugging me every day, don't need a network of delivery drivers who miss my delivery half the time, don't need a lot of things. I'm being very simplistic, but you get my drift.

The problems facing newspapers are not unlike those facing film and other content media. We all know the digital problems and possible solutions. But they're also similar in another way - both suffer from some incredibly bad management and inability to change. Many of the problems facing newspapers have nothing to do with digital, they are legacy problems - things like focusing on gossip instead of hard news, declining readership as people have more options, media consolidation that favored less quality work, the fact that haf of advertising doesn't work, and we're learning through better metrics what half that is, etc. Frankly, however, there's been a lot of inertia because in most towns things settled into a system where one paper ruled the day, and if you owned a printing press you could essentially print money. Lots of it. You had no reason to change, no reason to think about the future. No reason to invest in the future. And if you were making money hand over fist on soft news, who cares about the "public good" of good journalism. Now that the economy has, in the words of Warren Buffet, taken the tide out and shown us who is wearing clothes and who isn't, many a bad business model is being exposed.

I obvously don't have all the answers, and I don't expect them to have all the answers either, but this is their industry and someone in it should be able to come up with a business plan that's better than trying to put the genie in the bottle and start charging micropayments for their content. They've tried it before and failed. So if we're going to think of giving newspapers a foundation or government lifeline,then we need new thinkers with better models. I read the New York Times and the Wall Street Journal in print every morning before I start work and I care about good journalism and its importance to civil society, but I don't think we should suffer fools for long. While there are many great employees at many newspapers, there's an awful lot of bad thinking at the top (and I know there are exceptions). So that's why I think the smarter investment in our future is in the start-ups and the more nimble, usually smaller, press around the country. I don't expect all the big media to implode, and don't want some of them to go away, but I do think that the most profound changes will likely be too hard for the big guys to stomach - to embrace those changes, they'll need to undercut their existing model even more. I do think that the crisis is serious enough to warrant some intervention, but like the recent bailout, any such intervention should come with some serious strings attached that ensure that what media survives isn't just more of the same old schlock, but more of the journalism we need.

These aren't my final thoughts on the subject, just my initial ones from yesterday's conversation. Got any good ideas on what should be done? Leave some comments.

Photo Credit - Thomas Hawk

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