New news business models can’t ignore new economics

Normally, I would just add this to our (almost) daily collection of links, but Vin Crosbie has said something so succinctly and clearly that it deserves a post and a full reading. At ClickZ, Vin says:

…today with newspapers, magazines, and broadcasters who clamor for the “missing” business model that will allow them to stay in business doing what they’ve always done. It will never be found because continuing to do what they’ve done no longer makes sense. There are more quick and efficient ways to produce and disseminate information.

Anyone looking for the silver bullet business model to save their old business needs to read what Vin has to say.

The internet has fundamentally changed the economics of information. Digital distribution has ended information scarcity, and much of the new talk of paywalls isn’t about making money but attempting to recreate scarcity. I seriously doubt this will work, and I seriously doubt that trying to squeeze revenue out of much of the existing information output will work. There is no business model that will allow journalists to simply continue doing what they have done. Journalists, editors and publishers need to accept this and re-make their businesses.

Chris Anderson of Wired points out that the journalism businesses of the 20th Century was built on scarcity and monopoly rents. Newspapers were once the most efficient ways for advertisers to get their messages to the public. This created media empires that could fund huge staffs of journalists. Howeveer, beginning in the 1970s and accelerating with satellite television and the internet, people had more choices for entertainment and information. As I’ve often said, information isn’t the scarce resource now. We’re fighting for attention.

This leads to a host of questions. These are just a few.

  • Accepting that information is no longer scarce, what value can journalists add for our audiences?
  • If we’re not adding value, why are we doing it? What are we going to have to stop doing?
  • What new services can we create that will support journalism?

We really need to be thinking beyond business models to support our existing business and our existing ways of doing journalism. I used to think that the efficiencies of digital production would help existing journalism organisations to jump the chasm. I’m no longer confident that this is possible.

After a very busy summer, I’ve got a backlog of blogging here on Strange Attractor and a backlog of thoughts. In addition to considering the issues of over-supply, I agree with Dan Gillmor, we’ve got a problem with the demand for news. As per usual, Dan is asking some very important questions. I am starting to think of ways that we can stimulate demand by actively working to engage our audiences. I’m excited to be plugging back into the discussion about what we journalists do next, and Suw and I are looking to move this discussion beyond the talking and into doing.

2 thoughts on “New news business models can’t ignore new economics

  1. In a sense, I’m a bit bored of discussing the problems now. On the whole, most of us are aware of exactly what the problems are.

    Every time I think the discussion is about to usefully move forward to practical solutions, it seems to get dragged backwards by another wave of journalists starting blogging and discovering, all over again, that all our old assumptions are broken.

    Time to move things forwards.

  2. Adam, I agree with you. I’m bored of discussing the problems, and I think the current paid content discussions are almost entirely pointless. Most of these discussions are about trying to generate revenue for existing services with very little discussion about new value-added services that have a much better chance of generating revenue.

    I’m increasingly focused on this line of thinking because I think its the only way forward. Fiddling around the edges, which most of the paid content ideas do, isn’t going to work. Yes, it is time to move things forward. I think I’m starting to change my ides on the best way to do this.

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