UPDATE (Oct 9 2012): Following the reviews of a collection of journalism students, as well as other topical events, I’ve written a follow-up piece here.
Listening to news executives talk about micropayments, Kindles, public subsidies, micropayments, collusion, blocking Google and anything else that might save their businesses, it occurs to me that they may have missed some developments in, ah, well, the past ten years. For those and anyone else who is interested, I offer the following primer on how things have changed.
Any attempt to create a viable news operation needs to recognise and take advantage of these changes. I will probably have missed some – I’m hoping you can add them.
UPDATE: Jay Rosen suggests reading this post alongside this one by David Sull: “newspapers are essentially a logistics business that happens to employ journalists”. He’s right – it makes some great points.
1. Atomisation of news consumption
In the physical world news came as a generic package. You had your politics with your sport; finance news next to film reviews. You might buy a paper for one match report. No longer.
It’s probably no coincidence that majority news consumption recently shifted from regular consumption to sporadic ‘grazing‘.
2. Measurability of users
If you placed an ad on page 3 in a newspaper with a circulation of 100,000 or a broadcast watched by 5million, you didn’t think about the readers who only bought that paper for the sport; or the viewers who popped out to put the kettle on – and that’s before we talk about circulation figures inflated by the assumption that every paper was read by 3 or 4 people.
Online you know exactly how many have looked at a specific page. Not only that, you know exactly how many have clicked on an ad. And you know exactly how many made a purchase (etc.) as a result.
There’s more: you know what page the user was coming from and went to; you know what search terms they were using; you know what country they are in, how high spec their computer; and depending on how much data they’re provided, a whole lot more besides.
There are two huge implications of this measurability (which many advertisers are only just waking up to).
Firstly, advertisers expect more. Online, advertising has moved from a print/broadcast model of paying per thousand viewers (CPM) to paying per thousand clicks (CPC) to paying per action – i.e. purchases, etc. (CPA).
Secondly, it means that editors and managers now know in much more detail not only what readers actually read – but what they want to read (what they are searching for). My name’s Britney Spears, by the way.
3. Mutually conflicting business models
In print you could have your cover price and your ads; online, any paywall means vastly reduced readership because you are cutting out distribution channels – not just Google, but the readers themselves who would otherwise pass it on, link to it and blog about it. You either square that circle, or look for other revenue streams.
4. Reduced cost of newsgathering and production
The technologies were dropping in price long before the internet – satellite technologies , desktop publishing. But the web – and now mobile – technology has reduced the cost of newsgathering, production and distribution to almost nil. And new tools are being made all the time that reduce the cost in time even further. When publishing is as easy as making a phonecall, that causes problems for any business that has to maintain or pay debts on costly legacy production systems.
UPDATE: Robert Brand takes me to task on this one in the comments but also on his blog, where I have responded in more detail.
5. End of scarcity of time and space
Sometimes people need reminding of the basic laws of supply and demand. From a limited availability of journalism to more than you can ever read, any attempt to ‘sell content’ must come up against this basic problem.
6. Devaluation of certain types of journalism
If a reader wants a book review most will go to Amazon. Music? Your social networks, Last.fm, iTunes or MySpace. Sport – any forum. Anyone producing journalism in those or similar areas faces a real issue.
7. The end of monopolies
Just as the scarcity of space has been broken; the scarcity of distribution networks has been blown apart. To distribute information in a pre-web era required significant investment. To distribute information in the web era requires an email account or a mobile phone. Social networks are more powerful and efficient than delivery vans, and you don’t need to sell a certain amount of information to make them viable.
Oh yes, and that makes news even more perishable than it was before.
Meanwhile, the monopoly on advertising has gone. Where before an advertiser might have had a choice between you and a local freesheet, now they can choose from dozens of local media outlets, national directories, international outlets, search engines, social networks, or spending money on becoming media producers themselves. This competition has driven the cost down and innovation up. What have you done to stay competitive?
8. Cutting out middlemen
Because anyone can publish and anyone can distribute, retailers can talk to customers directly. If Threshers can release a money off voucher directly to customers and it become wildly (too) successful, why should they advertise in a newspaper or magazine? If councils can publish news on their own website, or indeed publish and distribute their own publications, why should they publish announcements in a newspaper? If Coca-Cola can create a ‘brand experience’ on its website, and gather consumer data at the same time, why should they limit themselves to 30 seconds in the middle of Britain’s Got Talent?
9. Creating new monopolies
Google rules this space, not you. Amazon rules this space. iTunes rules this space. eBay rules this space. Facebook rules this space. Craigslist rules this space. If you want to thrive in the new environments you have to understand the contexts within which users operate. Search Engine Optimisation is one aspect of that. Social Media Marketing should be another. Understand how one website’s domination of a particular space of the web impacts on your strategies, and acknowledge you no longer control your own destiny. Yep, Google stole the delivery trucks and Amazon stole the newsstand. Oh, and you gave away a whole lot more too.
10. Digitisation and convergence
When everything is digital, new things become possible. Audio, video, text, photography, animation – all becomes 1 and 0. You need to understand the efficiencies that makes possible, from broadcasting live from your mobile phone to releasing images on a Creative Commons licence or publishing raw data to allow users to add value through mashups. The value of your organisation lies not just within its walls but beyond them too.
11. The rise of the PR industry
The PR industry is often overlooked as an economic influence on the news industry. Its first influence lies in the way it has provided cheap copy for news organisations, meaning an increased reliance by news organisations on fake events, reports and releases. This will become increasingly problematic as the PR industry starts to cut out the middleman and appeal directly to audiences.
Secondly, the PR industry has an enormous effect on recruitment and retaining of talent in the news industry. In short, news organisations have become a training ground for the PR industry. Journalists who cannot live on newspaper wages have been leaving for PR for some time now, meaning increased costs of training and recruitment (partly because there are few older journalists able to train informally). Furthermore, good graduates of journalism schools are often recruited by PR even before they enter the news industry, meaning the news industry has a problem attracting the very brains that could save them.
12. A new currency
Oh yes, and that money thing? It has competition. The rise of social capital is a key development that must be considered. Anyone who thinks nonprofessional media is not important because it doesn’t have a ‘brand’ or because people will lose interest, doesn’t understand the dynamics of social capital. Many people read blogs and other UGC because they trust the person, not the ‘brand’; many people self-publish because of the benefits in terms of reputation, knowledge and connections. And many people link to news articles or contribute user generated content because a journalist invested social capital in their communities, or an organisation built a platform that helped users create it.
That’s it. Unless you can come up with some more…?
Online Journalism Blog 
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aye, and its gonna change even more in the next few years, digitalbritain has to be ready…
Quote: “But the web – and now mobile – technology has reduced the cost of newsgathering, production and distribution to almost nil.”
Mate, if you think the cost of newsgathering has been reduced to almost nil, you are sadly mistaken, unless you believe sitting behind a computer and redistributing others’ journalism is “newsgathering”.
Hi Paul, thanks for this list.
Talking about business models, I think you ought to add the increasing participation of business and political interests in old-school news production.
Whether it’s Slim’s investments in the NYT or France’s bailout program for its newspapers or China’s multibillion plan for Xhinua, much of today’s traditional journalism (and even more tomorrow) is financed by people with an agenda.
That means that mediawatchers and critical thinkers will be in need in the new information ecosystem. Hence the need for bloggers 🙂
Spot on, pal.
Guess its implicit in many of your points, but still thinking and acting – commercially and editorially – as silos, not networks doesn’t help their chances either…
Really interesting. Great piece.
Just one thing I’ll challenge you on – point 6. Being in an isolated location I get all my news online. No tv.
I also, on occasions, struggle to download music here – it takes an awfully long time.
Mostly I’ll admit that I download music I have never even heard a snippet of before. I buy based on people on Twitter or whatever telling me “this is good stuff”. But I am so short on this kind of advice that I often have to really drag suggestions out of people.
Due to my slow internet connection YouTube, LastFM, Blip etc are useless.
And, to be honest I don’t trust music reviews on the likes of Amazon. Let’s face it you only ever review something on those platforms if you love the artist and want to plug them. Hey, I bet Britney’s last album got good reviews on Amazon.
So I’d welcome more reviews. I still can’t believe there isn’t a Twitter music reviewer that just says something like:”Sounds a bit like Neil Young crossed with the Beatles. It’s a must buy. Five stars.”
That would be great for me.
If there is so many reviews available from social media sources why do I painfully slowly download Mark Kermode’s movie show on FiveLive every Friday?
I actually want my reviews to come from experts with no axe to grind or fanlove to show.
And I also think there is room in mainstream media – yes even printed material for “what’s on” type coverage but with some intelligent interviews, reviews etc to add value.
I’ve noticed in the Guardian perhaps that the kind of middle ranking level of culture that I might be interested in (guitar bands, Scorsese movies, etc) isn’t that well covered – and yet there is plenty of coverage of more mass appeal reality TV – (whoring for hits for those advertisers perhaps).
And I signed up to the @thewordmagazine twitter feed hoping for music reviews and all I got was the usual inter-celeb banal back scratching crap.
I honestly think that more online non user generated music, movies, arts reviews etc are actually needed and while the likes of the peer reviewing Amazon may have meant less coverage elsewhere, it has created a gap in the market and someone should fill it.
I should also say that it would be easy to write of my experience as one of being remote and unique (in a city ten hours from the capital iN Cameroon) but far from it. Even on my dodgy connection I “enjoy” better internet access that 80% of the world.
We should never forget that when we talk about media trends and what us and our peers are watching – that “we” are the very lucky ones and our experiences are so far from being a majority.
Time and time again when people talk about newsroom revolutions and how we’ll get all our news on handheld devices etc – where does that leave not just the developing world but also sectors of our own western societies who don’t have the resources to enjoy access to such equipment.
@Steve – I didn’t say those types of journalism had no value, but had been devalued. You only have to look at how magazines in those areas have been particularly affected by the web. I’m not suggesting there’s no business in those areas, either – but that any business has to acknowledge the fact that these are areas where users are particularly prolific. Bearded Magazine is a great example of a music publication that understands this and doesn’t rest on the laurels of its writing alone.
@Robert – you are talking about a normative idea of journalism, to use some academic jargon. If all journalists expended enormous amounts of energy researching every story they produced, this wouldn’t be an economic factor, but churnalism is a serious factor in professional journalism. To pretend otherwise would be naive. I’ll comment further on your blog post.
With the things you raise in point 2 in mind, it never seizes to puzzle me why print advertising, which is clearly less reliable and inferior in terms of measurability, brings in more revenues than online ads. Recently I’ve formed a theory that newspapers are masters of selling print ads and suck majorly at selling online advertising.
Great piece Paul. For me, point #12 is often undervalued.
Trust is key, and the walled garden approach of some newspapers is a business-centric view. If newspapers take a reader-centric approach, where they apply a content strategy that adds value to readers first, they will understand that becoming a trusted hub for information can be huge. Jeff Jarvis often talks about the importance of linking out and providing context to users. If online news sites do this (as many have started), then can become destinations as well as starting points/trusted hubs of information. This is where they can capture a lot more of the value chain.
Great list, Paul! They’re all problems, but I think #1 is the biggest issue because it’s the fundamental one. Papers’ online efforts are still largely based on recreating the print experience in online form, and it’s the only context they offer most readers — a context that, unfortunately for them, is pretty much totally broken.
So from my point of view they need to create new contexts based on the many ways readers may come to a single article — search, friend’s recommendation, etc. — in hopes of enticing readers to stay longer, read more and become the kind of engaged, loyal readers who will become part of communities, and thereby have value to advertisers and other folks who can pay the bills. It’s not the only problem, of course, but I think it’s the biggest one.
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Hi Paul, thanks for the post. Lots of good points – but for me, one big omission: the presence in the marketplace of a state broadcaster – in our case, the BBC. Wonderful though their service is for the user, I suspect we will look back on the impact that the development of BBC News online has had on the market place and realise just how important it has been in shaping online journalism in the UK.
Thanks Richard – although the BBC isn’t a new economic influence it’s a good point that its presence online is a very different and new factor – I’d probably plump that under end of scarcity of time and space.
Great piece. Good start, because I feel that at least one discussion item need more attention: the need for community building, allowing for true multi-media publishing. Not only does the inwardly focussed, change-resistant and potentially arrogant nature of most journalists need to change, we also see questions being asked here of the newspaper marketeers. To be honest, a good journalist probably needs to have a big enough ego to ensure that he feels secure enough to publish his thoughts; however it is time for the marketeers to stand up and lead the way to community-based publishing. Thought leadership is very important here!
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Much valid thinking here – but I think one needs to get beneath the layer of content per se. Dig into the infrastructural “base” beneath the superstructure, cause that’s where the gold is hoarded:
http://interimtom.blogspot.com/2009/07/haque-and-doc-on-news-evolution-and.html
you’ve certainly touched on all the factors shifting the paradigm. As for the future of hard copy newspaper, I think there will always be a market -however small- for it. After all, reading news off an LCD screen can be more taxing on eyesight that reading it off the page.
Mouli, agree completely. Newspapers are a great platform, with advantages over digital, and I expect successful newspapers to continue to play to those strengths just as they did with the advent of radio and TV. The difference is how the web changes the economies they operate in, and there’s the real difficulty, but I think some newspapers will ride that out.
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To be honest, a good journalist probably needs to have a big enough ego to ensure that he feels secure enough to publish his thoughts!!
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Yeah true but isn’t it a threat to privacy and individualism.
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