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News Distribution and Revenue-Generation in the Internet Era
-- By SamSalyer - 07 Dec 2011 | |
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< | It is no secret that the Internet Era has hit news organizations hard; the death of newspapers has, of course, been a widely reported phenomenon. As more people access news though free online sources, fewer are inclined to pay for newspapers or magazines, transforming the once wildly profitable newsprint industry into one that struggles to stay in the black. Nationally, the number of newsroom staff has shrunk by a quarter over the last five years, as newspapers lay off reporters and copywriters to combat sharp declines in circulation and advertising revenue. As the revenue generated by print editions shrinks and online revenue growth stagnates, news organizations must adapt quickly or go under. The way news is distributed and funded is rapidly changing. | >
> | It is no secret that the Internet Era has hit news organizations hard; the death of newspapers has, of course, been a widely reported phenomenon. As more people access news though free online sources, fewer are inclined to pay for newspapers or magazines, transforming the once wildly profitable newsprint industry into one that struggles to stay in the black.
What "wildly profitable
newsprint industry"? Are you actually talking about the newsprint
industry, the people who make the paper? You can't be talking about
newspaper publishers, who have been going out of business and
consolidating for fifty years now. No one was making good money out
of newspapers before the Internet.
Nor has this anything to do with free information sources. People
are rarely driven out of business by someone competing with them on
their costs. Usually what hurts a business is competition with how it
makes its money. What the Internet did to newspapers was that it
created Google and Craigslist. If we're going to talk about the
business of newspapers, please let's at least try to remember what the
business was.
Nationally, the number of newsroom staff has shrunk by a quarter over the last five years, as newspapers lay off reporters and copywriters to combat sharp declines in circulation and advertising revenue. As the revenue generated by print editions shrinks and online revenue growth stagnates, news organizations must adapt quickly or go under. The way news is distributed and funded is rapidly changing. | | | Why Newspapers are Dying | | | Traditionally, the bulk of newspaper revenue came from advertisements: car dealerships, retailers, listings for homes, and job openings. These businesses advertised in newspapers because of their wide circulation to people who mainly wanted to read about celebrities and sports. Their money funded the “serious” journalism that fewer people paid attention to. This was the old newspaper model, as stated by Clay Shirky: “[w]riting about the Dallas Cowboys in order to take money from Ford and give it to the guy on the City Desk.” | |
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> | There's lots of things
Clay is smart about. Why quote him about something obvious?
| | | But now the web provides better celebrity and sports news for free so people are canceling their subscriptions. Car dealers have learned that most people spend several hours researching a potential car purchase online, so they send more advertising dollars to cars.com instead. | |
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> | Umm, cars.com is not
really the point here. Why are we discussing not the elephants, but
the tick living on the back end of the mouse? | | | It’s important to recognize that “serious” newsgathering has always been subsidized by something else. With the demise of the newspapers model, that subsidy is going to have to come from new sources.
A New Distribution Model | |
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< | Many have begun to suggest that newspapers adopt a non-profit model, using extensive endowments to fund their operations. While this is a viable option for well-known newspapers which could attract the sort of massive endowments that would be required (an estimated $5 billion for the NY Times) it doesn’t seem realistic that money could be found to endow newspapers around the country. There is a necessity for a nationwide network of reporters sharing content, so that there will be someone on the ground when a tornado hits Iowa, or reporters from Anchorage who can inform the country about the back-story of the newest Vice-Presidential candidate. | >
> | Many have begun to suggest that newspapers adopt a non-profit model, using extensive endowments to fund their operations. While this is a viable option for well-known newspapers which could attract the sort of massive endowments that would be required (an estimated $5 billion for the NY Times) it doesn’t seem realistic that money could be found to endow newspapers around the country.
Umm, when you're not actually printing anything on, like, paper, what's this "around the country" thing? These aren't baseball teams playing in stadiums, they're "heads of ecosystems," like National Public Radio, Wikipedia, MIT, or archive.org. I assume the survival of "New York Times" as a generic designation, but they are in fact a network of reporters sharing content, and they will become more so as the cooperatives from which they presently consume grow in importance.
There is a necessity for a nationwide network of reporters sharing content, so that there will be someone on the ground when a tornado hits Iowa, or reporters from Anchorage who can inform the country about the back-story of the newest Vice-Presidential candidate.
Happening. Just look
for it and you'll see it. | | | But there is no longer a need for newspapers in all these places. Since there is no longer a need to physically deliver news to subscribers, reporters are freed from word limits and news organizations are freed from the need to package wide-ranging stories together in a paper made appeal to all their subscribers. Instead, readers can use RSS to receive exactly the information that interests them. | |
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> | This conflates two
different and quite unrelated questions: the simultaneous
de-localization and re-localization of journalism that comes with the
Net, when informational friction is reduced to zero at all geographic
scales, and changes in reader habits that come from the
hyperefficient filtering of digital information streams. Both are
important, but the mash-up of the two isn't important, it's just
misleading. | | | This gives individual reporters the opportunity to develop their own audience by covering a very specific beat. A reporter could extensively cover a relatively small community in the sort of depth that is impossible in a newspaper trying to expand its circulation. Likewise, because physical distribution is no longer necessary, a reporter could thoroughly cover a topic of intense interest to a small, wide-flung group of people. By making it possible for reporters to concentrate their coverage on smaller communities, the quality of that coverage will increase. | |
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> | That's re-localization.
Sharing makes it possible, by connecting that better local coverage
to everyone, whether local or not, who would make a voluntary
micropayment to support it. | | | As public radio and the growing number of community and ethnic newspapers (the only segment of the newspaper industry currently expanding) have demonstrated, if you provide an information service of sufficient quality and value, people will pay you for it, even when it is ostensibly available for free. As Michael Goldhaber explained in "The Attention Economy and the Net", in an information economy, attention can be used to generate money. Additionally, direct funding of reporting will increase the quality of news. When a reporter’s paycheck comes directly from the community he is covering, he will be more responsive to the actual needs and interests of his readers. | |
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> | His income always comes
from the community she is covering, plus the community she is
informing. The only historical variable is how much of that support
had to be consumed in printing things on paper and delivering the
paper in trucks (answer, almost all of it), and how much of what was
left over was stolen by the publisher (answer, almost all of the
rest). Now, minimizing the remainder of the intermediation between
writer and editor, on the one hand, and reader on the other, turning
that remaining intermediation into a non-profit controlled by the
community, we secure for the writer and editor the very best deal
possible, and we give to the community covered and informed the only
thing they deserve to have: control. We can do that with Central
Park, and we can do that with Carnegie Hall, and we can do that with
National Public Radio, and we can do that with the New York Times.
What's the problem again? | | | There is also potential for investigative reporting, the most bemoaned supposed casualty of the death of newspapers, to be funded through a "Street Performer Protocol," as described by John Kelsey and Bruce Schneier. Reporters covering both local and national stories could release preliminary results, and condition further investigation on a certain level of donation from the public. This funding model would also have the twin benefits of directing reporters’ time and energy towards stories that peak the public interest, and towards investigations that show signs of bearing fruit. | |
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> | Why bother with some old
technology? All you really mean is we can PayPal? reporters who
publish things on the web that we know are valuable and that won't
get done if we don't pay for them ourselves. | | | The end of newspapers could lead to a news model based around a few endowed, national news organizations, a network of reader-supported local and community reporters, and investigative reporters or teams looking into specific stories or allegations that the public has an interest in funding. This model is enabled by the reader’s ability, in the internet age, to access exactly and only the content he is interested in, and has the potential to improve new coverage by allowing reporters to cover a more narrow beat and requiring them to be more responsive to their readers. | |
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> | What's "could"? Which
part of this hasn't already happened? If all of it has already
happened, what could we make this essay about that would push the
conversation forward, instead of suggesting that the present could
still occur one of these days? | | |
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