With just two weeks of cash left, Frédéric Filloux described the crisis at Le Monde as “the textbook example of the evolution of French press over the last years”. He then went point-by-point the problems afflicting Le Monde in particular but the French press in general:
Most of these problems are not unique to the French press. The erosion of readership has afflicted the press in most of the western, developed world. A recent OECD report found that since 2007, newspaper circulation had declined by 30% in the US and by 25% in the UK. Before I moved to the UK in 2005, people always said that the problems afflicting the US press could never happen here because of the newspaper-reading culture. Only Japan’s newspaper market seems to have remained resilient.
In terms of a lack of budget discipline, I would only point to the industry in the US giving bonuses to execs while the companies were entering or operating under bankruptcy. As Robert Picard pointed out a year ago:
The Tribune Co. is trying to pay out $13 million in bonuses, the Journal Registers Co. is trying to pay $2 million, and Philadelphia Newspapers has already given hundreds of thousands in bonuses to its corporate officers.
The Tribune Co. is planning to put a cherry on top of the bonus sundae this year. They have already asked a bankruptcy court to approve $42.9m in bonuses and want to add an additional $16.2m in bonuses for execs when they exit bankruptcy protection. Of course, US media companies are not alone in providing bonuses to execs who preside over companies in financial distress. There are a few well known newspaper groups in the UK that have paid out bonuses to execs recently after announcing eye-watering losses.
As for lack of support in the core newsroom for digital strategies, I’d suggest that the current problem exist in a layer of powerful editors who believe they have the most to lose in any change. Rather than fully understand, much less support, the digital strategy of their organisations, they see it in their own best interest to protect the status quo and obstruct change, even as it leads to job losses and uncertainty over their own future. It is self-interest and short-sightedness to the extreme, but for them, it seems a rational decision.
Ah, the belief in the beauty of the brand, it is so endemic in media organisations that they can’t understand why their circulation is in decline. Surely in this age of a multitude of media choices, our brand, our quality will prevail, they say. Look at your books and your circulation, how’s that working for ya? Only a fool clings to a failing strategy, and the industry has more than enough fools to fill a ship.
Difficulty investing in the future, to experiment with new ideas, expensive investments in the past. Yes, yes, yes. It’s a textbook for more than France. About the only one that stands out as not generally applicable is the subsidy, and for those in the US and the UK looking for their own government bailout, it is instructive that while subsidies might help for a while, they are not a long term solution.
The industry has resisted fundamental change for so long. They believed that they could outrun the future with their brand, their quality and their market position, but they can’t. It is adapt or die, and if you wait long enough, you’ll be in the same position as Le Monde, with only two weeks of cash left and suddenly a room empty of suitors.
I honestly don’t believe most in the newspaper industry have the ability to make the changes necessary. They certainly haven’t demonstrated that in the past. In terms of the business of newspapers, they have proven that they can milk the business model for a little bit longer through cuts and consolidation. Bankruptcy will given them another go around, but it won’t fundamentally change the business environment that caused the collapse in the first place. The process will enrich a few but leave many journalists looking for something else to do.
As for me, I love journalism too much. I wasn’t going to wait around and watch anymore of this slow motion disaster. There are other ways to create a future in journalism and a future for journalism, and I’m loving have a chance to explore them.
I will admit that it’s a bit cheeky quoting myself, but as I was watching the flow of posts and conversation on journalism blogs today, and specifically in response to Adam Tinworth’s excellent post Complexity is the New Reality, I wound up Tweeting “Silver bullets are the talisman of the desperate”. Adam was commenting on a good rant by Paul Bradshaw titled Let’s stop this ‘Curation is King’ crap right now.
…if curation is king in online journalism I guess I missed the coronation. Curation is a usurper, here to distract us from the bloody mess we’re in with the message ‘Business as usual’.
The future of journalism and publishing will not be curation, aggregation, the iPad OR mobile. It will be a strategic mix of these things and more depending on the market and the audience. As Adam says:
There is no easy answer, otherwise we’d have found it after over a decade. Complexity is the new reality. Clichés are just a crutch.
Clichés are much worse than that. Seemingly easy answers too often win internal debates, especially as Paul points out, some of these messages convey that ‘business as usual’ is an acceptable course of action.
Earlier this week, I wrote a post about multi-facted digital strategies that are generating growth for both the print and the digital for forward-thinking publications like the Christian Science Monitor and The Atlantic. The first comment on that post was “one word – iPAD!” The commenter isn’t alone: Mathias Döpfner, the head of German power publisher Axel Springer had this recommendation for his colleagues in the corner office:
Sit down once a day and pray to thank Steve Jobs that he is saving the publishing industry.
That’s the problem. Senior leaders in the industry aren’t looking for strategies, they are looking for a saviour. They want some supernatural – or in lieu of that, legislative – power to turn back the clock, put the genie back in the bottle, tax the internet and go back to the good old days when money just fell from the sky into their coffers. News flash: It’s too late. The good old days aren’t coming back. Anyone who tells you that you can continue doing what you’ve always done and that the solution is easy is lying. They care more about their current position than they do the future of journalism.
If you walk into a newspaper newsroom, you will hear something said over and over: “You can’t make money online”. It’s closely followed by grumbles of how much the company spends on digital. These are held up as some incontrovertible truth, like carrots help you see better.
Just as ‘carrots help you see better’ was propaganda spread by the British Air Ministry to conceal the military secret of radar, the ‘truth’ that there is no money to be made online is nonsense. It’s unquestioned propaganda in newspaper newsrooms where there is an unnecessary, senseless and ultimately self-destructive battle to keep the newspaper focused on paper, a battle driven by advocates of the primacy of print.
I’m not calling for the presses to be shut off. Rather, I’m calling for innovation in both print and digital. This battle to preserve the past is preventing companies from creating print and digital products that serve 21st Century audiences. Companies that are clear-headed and audience-driven are developing multi-platform strategies that are reversing decades long decline in profits and print circulation while increasing the share of revenue from digital. Those newspapers who remain focused on print are missing that opportunity.
It’s true that print makes the bulk of newspaper revenue, usually around 80%. But in focussing on outdated print strategies newspapers are creating a self-fulfilling prophecy: By not investing in digital, they ensure that digital revenues remain small in comparison to print.
In the US, Outsell found that in the news segment, largely made up of newspapers, only 11% of their revenues were from digital. In comparison, B2B publishers made 36% of their revenues from digital. Outsell analyst Ken Doctor said, “Simply put, the news industry has so far failed to make the digital transition.”
Although 11% of revenue doesn’t seem a good return, they have to be viewed in context. Print revenues are declining as a decades-long circulation drops no longer make print advertising as attractive. Digital revenues have been increasing, sometimes even through the recession, but it is usually from a very low base.
Commercial departments will also often tell you that it’s just not possible to make money online. In many instances, news organisations have built up huge audiences online but have failed to translate that audience into revenue. They will even refuse to investigate the opportunities afforded by digital on the basis that it would require them to do something different.
Commercial departments who say it’s not possible to make money online need to shoulder their responsibility for their failure to help newspapers make the transition to digital. If the current commercial strategy isn’t working – and old print ad sales strategies are not working very well online – why not try a new one? As the adage goes, if you do what you’ve always done, you’ll get what you’ve always got.
There is hope, though. Folio has two great profiles of two publishers re-inventing themselves: The Christian Science Monitor and The Atlantic. Both profiles dive deep into details of the two different publications.
After rising losses, The Christian Science Monitor shifted from a daily newspaper to a web-first strategy with a weekly news magazine. One thing that stands out in the profile of the Monitor is how much audience research they have conducted and continue to conduct with more than 3,500 readers. They found out why people had stopped taking the newspaper: Cost, lack of time and a shift to getting headlines online. I really liked the way that publisher Jonathan Wells summed up how they re-thought their value proposition:
We had to think long and hard about it. Our approach is a composite of the learning economy—we’re serving people without a lot of time, who are trying to understand complex issues quickly, and contribute to a solution. As one guy here says, our mission is ‘Help me get smarter, faster.’
One thing that jumped out at me was how willing they were to be nimble and to rethink not only how they worked digitally but also their print strategy. As they said, they were able to convert 93% of their print readers from the daily to weekly, and they’ve increased subscriptions by 63% since the shift. Increasing circulation going from 2009 to 2010 is something that most publishers would have killed for. They are not pursuing newsstand sales. They are focused on attracting the “right customers through controlled, targeted growth,” according to senior marketing director Susan Hackney.
They have also increased their page views by 49%, and they are looking to develop a line of digital products. This is all really smart, strategic and refreshing in an industry that seems to be mostly focused on squeezing the last bits of profit out of declining business models. That’s just a taster of an excellent article.
Folio also did an excellent profile of The Atlantic, which is managing to reverse a revenue decline that began in the 1960s. I often say that news organisations need to disrupt their business before someone else does. Atlantic Media president Justin Smith did just that, pushing for a digital-first strategy. From the Folio article:
(Smith) stressed that print is not dead, but taking this approach allowed the company to unlock its grip on traditional revenue sources. Importantly, the Web site’s overhaul was set up as an insurgency on the print brand. “If our mission was to kill the magazine, what would we do?” said Smith, who added that a digital competitor was going to do that anyway, so they did it themselves.
They are projecting that digital will account for 39% of their revenue in 2010. They not only shifted to digital first, but they also took a novel marketing approach, setting up their own marketing services division in an effort to differentiate themselves from ad networks. I’ll leave you to read the rest of the article, and I’ll give you one last reason to read the rest. After decades of decline, they looking at a profitable fourth quarter of 2010 and a multi-million profit in 2011.
To reposition themselves, these publications are looking for innovation from both print and digital but with a digital first strategy. The Monitor is using audience research to deliver products more relevant to their audiences, and they are thinking clearly about where they need to go and how nimble they need to be to achieve success.
We can rebuild businesses to support quality journalism, and here are two examples that show a few options for the way forward.
I’m at the Value of Journalism conference at LSE right now. I didn’t live blog the panels, but there were a few things that stood out for me and spurred some thoughts. There were discussions about paywalls, which I think largely reinforced my view that a very polarised, noisy media fracas obscured a much more nuanced reality in the paid content strategies of news organisations.
I did want to flag up the comments of Joanna Geary, a friend of mine, who spoke about her journey into journalism. UPDATE: Like many people, she stumbled into it. She told me afterwards that the move “was planned but knew it wasn’t perfect for what I wanted”. She says that on entering journalism she wasn’t a newspaper reader, and she definitely wasn’t someone who had specific loyalty to one newspaper. She is an information seeker. Now, she says that she regularly visits about five sites a day.
They are full of people I find interesting. They stimulate my thinking. Those are the sites that I visit the most.
This is very much the way that I consume information. I’m interested in subjects and topics, and as a networked journalist (the topic of this conference), I use personal networks and other tools to get as much information and gather as many sources about a subject that I can. As a journalist, I then try to sift, filter, highlight and verify. I also try to draw connections between these sources and bits of information. It’s very similar to traditional newsgathering, but the tools are different.
At conferences, I’m often asked about my news consumption patterns, and my standard response is: “My reading habits are voracious and promiscuous.” I find the idea quaint that I would choose a single news source for my information. Every source has it’s point of view, some more prominent than others. I feel the need to read several sources of information to get a complete view of a subject or topic.
I used to think that I was in the minority doing this, especially seeing as as a journalist, it’s part of my job to sift through a lot of information. However, this might represent a broader shift in news consumption. Gina Chen at the Nieman Lab at Harvard looked at a recent Pew Research Centre study in the US. (Caveat being that US studies aren’t necessarily applicable to all markets.) She interpreted the findings as:
But the important point is that the loyalty isn’t to the platform, the application, the delivery system, or the brand. The loyalty is to the need for the information.
That succinctly describes my relationship to news and information. I’m still not ready to generalise my news consumption patterns, but I do think that there are elements of my news consumption patterns that I share with digital audiences. I think that people are filtering information, consciously and unconsciously. Editorial choice and voice used to be the only filter for news, but I think that is changing. People have other tools that are proving to be better vehicles for relevance than the traditional news outlet and its manner of bundling information.
Teasing out Trust
Back to the conference which has the overarching theme of the Value of Journalism. It’s important to draw a distinction between societal value and economic sustainability. Speaking of teasing out issues, Joanna also drew a distinction between legality, accuracy and trust:
If it was illegal to be untrustworthy and wrong, a lot of journalists would be in jail.
Joanna also talked about her motivation for getting into journalism. I’m writing this part of the post a little after the panel, and I don’t want to put words into Jo’s mouth. However, it is safe to say that her motivations going in were different than the motivations that she found other journalists had. Jo said that she found that many journalists just wanted to write, to have influence and be recognised. Jo’s motivations were more based on a desire to inform. (I’ll check with Jo just to make sure that I’m not misquoting her. She did say to me after the panel that she is finding more people in journalism like her.)
Jo’s comments resonated with me. As I’ve said before, in my rather brief career thus far I’ve had the honour of working for international journalism organisations including the BBC and The Guardian. However, I got my start at a small newspaper in western Kansas, The Hays Daily News. When you’re writing for a newspaper that sells 14,000 copies to people spread across a few thousand square miles, one is aware of the limits of one’s influence.
Of course, we all want to be read or viewed. However, in terms of influence, it’s not really something that I’ve sought nor is it what gets me up in the morning. My goal is to provide people with information so that they can make decisions in a democratic society. I know that trust and credibility is the bedrock of what I do.
Engagement has been key to building trust in the journalism I do, and Jo spoke very eloquently about that during the panel. It is one of the reasons why I have been such an advocate of social media journalism. It is a chance to directly engage with our audiences and to build (or in some cases rebuild) our relationship with people.
Earlier this year Lottie Lodge knitted a pair of socks and put them up for sale on Coriandr. As any craftsperson should, she worked out the costs of her materials and time and set that as her list price. They socks worked out to be £208.70.
The disparity between the cost of creation and the price that punters are willing to pay is a significant problem for crafters. I learnt this through my jewellery making, which I had hoped would be a self-sustaining hobby rather than a new career, although it was nigh on impossible to sell enough to even be that. I still have a stock of necklaces sitting about that I just haven’t been able to sell.
The same problem affects content creators too. I have a number of friends who are professional authors. All bar one get paid less for their books than the time it takes them to write them. Most authors I know don’t even get paid that.
I suffered the same problem when I was a music journalist. Whilst I was writing for the now defunct Melody Maker, freelancers had the first pay rise the paper had enacted for ten years. Cunningly, however, they counteracted the pay rise by reducing the word count, meaning that I went from earning just over £200 per article, on average, to around £180. The music press didn’t need to pay more. Behind every eager young journalist was a long, long queue of younger, more eager journalists willing to work for less.
Whenever you have a popular activity where the number of people who want to do it exceeds the number of professional opportunities you create this imbalance. This means that the price of the socks or books or articles gets driven down even though the cost of production is going up, at the least, in line with the cost of living.
In an industrialised environment, this is what unions are good at stopping. A good union forces those who act as intermediaries between producer and consumer to pay a fair amount to the producer, which ultimately means higher costs to the consumer. (A bad union, on the other than, just goes on strike at the first sign of change and wastes everyone’s time and money.)
The internet facilitates disintermediation but that is itself a double-edged sword. Whilst a direct relationship with your buyers can result in higher quality sales, it also removes the protection from abuse that numbers, e.g. belonging to a guild or union, can (sometimes) provide.
The combination of a disintermediation of the production cycle alongside the industrialisation and commodification of that same production cycle creates two production pipelines:
I think this is a significant cultural problem, but not because I think that industrial processes necessarily produce inferior goods. That’s clearly not true as industrial processes often allow us to create things that are impossible any other way, and that is of massive value to society. So this isn’t an anti-industrialism rant. But what we as a society risk by expecting hand-crafted objects to be sold at the same price as mass produced goods is the squeezing out of the crafter and the resultant loss of skills. Culturally, the loss of skills such as bobbin lace making or stained glass making is a cause for concern.
The same isn’t true of content. The industrialised processes of Demand Media do not achieve something that a more considered, better paid process can’t do. The Huffington Post’s model of relying on writers willing to work for free ‘for the exposure’ is more exploitative than the music press was when I was a hack, and it puts no bread on the workers’ tables.
We need to start messing with the business models of creation. The ones we have clearly aren’t working very well and the cynical exploitation of people’s passion is turning the internet into a tool of oppression instead of freedom. Publishers need to get away from this idea that the only way to be profitable is to drive down the cost of content production by driving down their wages bill by exploiting writers.
We need to examine the role of the ad sales departments and ask whether they are doing everything they really can to place appropriate ads on the appropriate pages. Twice recently I have heard of commercial departments throwing up their hands and abandoning blogs and social media content because they ‘don’t have relationships’ with the right vendors. Well, surely it’s your job to go and create those relationships?
Now, it’s a simple repost to say that there are no successful business models for online and that there’s no way to have an online content business that isn’t predicated on making the cost of that content as close to free as possible. That too easily ignores companies like Federated Media or the specialist blogs that aggregate passionate and focused readers whose clicks are worth more to advertisers than those of a generalist publication. Sure, it’s hard work, but it is possible.
But stil,l we need to start looking outside of the traditional models that are based on mass sales and mass audiences. Good content takes time to create – and I’m not just talking about investigative journalism either! Whether it’s a well considered blog post, a feature article or a novel, the key cost to writing is time, and if we don’t start to understand and value that, we risk turning our written culture into mass-produced schlock.
Derek Powazek has an interesting analysis of the quirky quiz show on US public radio (NPR) called Wait, Wait Don’t Tell me and looks at the lessons the show provides in developing participatory media projects. What I like about this post is that he’s looking at a relatively traditional media format, the radio quiz show, through a different lens, from the point of view not of radio but of social media and gaming. I like from the start how he re-defines the term “crowdsourcing”.
For my purposes, it means collaborating with the people who used to be the silent audience to make something better than you could make alone.
I’m going to focus on two of his points and let you read the rest of the post to get the full monty. I couldn’t agree more with his second point about structuring input. You have to give crowds a goal, something to aim for.
Too many crowdsourced projects create a blank canvas and have a rather utopian view that the crowd will create a masterpiece. It just doesn’t work like that. You’ll most likely get obscene graffiti rather than a Van Gogh because not a lot of people engage with something when it isn’t clear what they are engaging with. A vacuum encourages vandals. They assume that no one is looking after your particular corner of the internet and will usually start trying to sell Viagra if you’re lucky. I still hear Field of Dreams strategies at conferences, a “build it and they will come” ethos that was discredited by anyone with credibility a decade ago. (If someone espouses such a strategy and dresses up with a lot of buzzwords stressed to impress, run away. They really are just snake oil salesman.)
I think Derek makes another good point when he says “Encourage the audience to level up”. Again, this is taking a concept from gaming and applying it to participatory media. Most people still passively consume media (although many more people are sharing and recommending media). It’s often referred to as the user-generated content pyramid or the 1-9-90 rule (although this might be changing). A participatory media project or service should give “new users a clear path, limited tools, and an awareness of that those on the next level can do”, Derek says.
Too often, media create crowdsourced projects that are akin to bad dates, they are all about us. It’s focused on what we, the media, not what we, the people, get out of it. As I’ve been saying for several years now, if user-generated content plays actually provide value to users, not just media outlets, then more people will participate. Creating levels for users and clear benefits for them as they contribute more is one solid strategy for achieving greater participation and better results.