The State Of The (News) Union

Actually, more like the state of the news industry’s health. This is no small thing. From the very beginning of the republic right up until today, smart men from Jefferson to I.F. Stone to various modern figures understood that a vibrant and effective media was an essential – if unofficial – fourth branch of government. It HAD to be, if the American setup was to persevere or even simply survive.

Today’s New York Times has an article (which I obtained for free from their web site) examining what another newspaper (the venerable and top-ranked Financial Times of London) has done regarding charging its customers for access to online content. Since the Internet really started to become ubiquitous (concurrent with the rollout of fairly inexpensive broadband to most major cities in modern countries) in about the mid-to-late 1990s, various newspapers have experimented with different revenue models for online content.

In the very beginning, newspapers – like virtually all other large corporate enterprises – viewed the web with something of a jaundiced eye, or at least a “wait and see” approach. Though it seems hard to imagine today (especially if you weren’t paying attention at the time), there was a great deal of thought in the very early days that perhaps the Internet would always remain a novelty curiosity, or the nearly-exclusive domain of geeks and scientists, not interesting enough, secure enough or easy-enough-to-use to ever sustain commerce or business in general. But when it became clear that the Internet was not only not going away or fading into limited-use obscurity but was in fact the wave of the future, most companies jumped on board.

But, in those early days, there were two additional problems: there were way more companies that wanted to get in on the game than there were good web developers and even IT people, and there was also no road map or rule book for how to monetize one’s company’s business on the Internet. For corporations which sold retail goods like sweaters or books, it was comparatively easy to figure out, and the potential benefits we pretty easy to spot: doesn’t need to pay for expensive retail space in fancy shopping districts or malls throughout the country, because they’re entirely an online business. They don’t have to pay retail employees to dress correctly, operate cash registers, etc. They don’t have the lighting, heating and other bills which come with renting (or even owning) retail space. They can house their actual inventory anywhere they wish in the country (or the world), in ugly-looking warehouses in low-rent areas, and though they have to employ some people to manage the actual getting-books-in-customers’-hands operations of the business, they can all work in those central inventory locations and not in expensive retail outlets. The savings realized from not having to maintain a network of retail outlets more than makes up for the cost of having to design and maintain a secure online catalog of the physical inventory (the web site), which allows customers to “browse” right from home and make purchases, too.

Not so with newspapers. Once the Internet started taking off, newspapers began to suspect or even fear that they would be left behind if they did not grab this new method of getting their content into customers’ hands. For the first time in history, it became possible for a newspaper like the New York Times to get its content out to readers who wished to receive it, anywhere from Addis Abeba to Anchorage to Angkor Wat. Previously, widely-read papers like the times had been forced to rely upon expensive newsstands which would fly a small number of copies of top newspapers from around the globe late at night after the papers went to press, overnight and onto their newsstands by morning (or whenever). But this was very costly (both for the customer and the distributors), and inefficient. Most such large-scale newsstands were only to be found in major cities, meaning there was much of the world where you simply could not GET many newspapers that weren’t local. Some newspapers began using printing facilities in other cities and countries, and transmitting the final editions of their papers via electronic means to those locations, then printing them locally. This was somewhat cheaper than sending heavy physical papers printed in the home office, but required a whole “remote” operation which duplicated the functionality of the home office. Either way, until the Internet, it was an expensive proposition to be a newspaper that was widely available outside of a 50-mile or so radius from your home office. Even today, many major newspapers like the Washington Post is not available in print outside of their home areas. When we moved to Atlanta, I tried to get it delivered to my home, to no avail. The New York Times was available (for a ridiculous amount), but not the Post.

Enter the Internet. It promised a cheap way to get your content into the hands of people who wanted it, anywhere on the globe – at least, anywhere that had Internet access, which was still a lot more places, even in the early days, than the number of locations which had expensive and wide-ranging newsstands which carried “exotic” out-of-town papers. But the problem was – and remains, to this day – that once you put your content online, many people even within your area of delivery will prefer to access that content using their computer instead of a traditional subscription. Newspapers’ monetization models never intended to make a lot of money from the revenue generated by subscriptions. The cost to the consumer barely covered the salary of the people in the distribution chain (truck drivers, paperboys, etc.), if even that. Subscription costs were merely an attempt to make the cost of personalized distribution as close to revenue-neutral as possible. The real money in newspapers has always come from advertising. Newspapers employed armies of outside sales reps who “worked” local businesses to advertise in their pages. Sunday sections were particularly larded with advertising, but every day, the paper featured nearly as many ads as it did content, word for word. When the Internet model arose, people who traded in their subscriptions for their computer were not only lost revenue to the newspapers in terms of the price of their subscriptions, but also in terms of a smaller customer-base that the papers’ ad salespeople could brag to prospects that the paper could deliver. If the physical paper gets into fewer hands because people are choosing to access the content online, advertisers in the print edition get fewer sets of eyes potentially viewing their advertisements.

How to solve it? The easy answer was to begin to allow advertisers to purchase space alongside the newspapers’ online content, as well. And they did: the dominant funding model (other than bucket-loads of venture capital, which has its own built-in set of drawbacks) for Internet ventures of all kinds has been to allow banner ad space (and other ads) to offset the costs of doing business. So the newspapers followed the leads of the dot-coms, which all seemed to have sprung up out of nowhere with tons of money available, and no visible means of attracting any more money, since most of them didn’t sell any actual products online (Yahoo!, etc.), at least not initially. But, for various reasons, banner ads didn’t return nearly the revenue that traditional advertising did.

So? So things didn’t work out the way many expected them to. No problem, we’ll just start charging our customers to read the online editions of our paper, the newspapers reasoned. Sounds like a fair approach: adapting to changing circumstances or setbacks by adjusting strategy. The only problem with that was – and remains, to the newspapers’ vexation – that because they’d chosen to go with the “free content, ad-revenue” model in the beginning, when not only the newspapers but the public were getting their feet wet with this new medium and method of communication, they’d inadvertently set the expectations. While the Internet is still a relatively young medium, most of the wired world’s expectations with regard to news content online has been fixed due to the news industry’s choices in those early years: online content is free, buying a paper is not. Whether that’s a reasonable expectation or not is immaterial at this point, since – like it or not – it is the dominant one. Many news consumers feel that the difference is that you’re paying for a tree to be cut down, turned into pulp, paying for the ink to be printed onto that paper and the machinery it takes to turn newsprint into an actual newspaper, and for the guy who stands out on the corner selling the paper or the paperboy who delivers it to your home every morning. They understand THIS to be the reason that a paper copy costs money; but they believe (again, rightly or wrongly) that once the paper is written, edited and typeset, any twelve-year-old can drop articles into a web-template. Costs nothing additional, and, in the blink of an eye, the “paper” is available anywhere in the world. Therefore, many people reason, the content of the online stuff should be free.

You can see the problem with that. Or, if you can’t, the newspaper owners and publishers sure can. As more and more people turn to the Internet for their news, and advertising in print editions AND subscription revenue declines steadily, the revenue derived from online advertising simply hasn’t been able to fill the gap. Worse, one of the other major cash-cows for newspapers used to be the classified section. Anyone who’s ever placed a classified ad knows how profitable that must have been for the newspapers: you get charged $10 or $12 per line for a two or three line advertisement which runs for one week. And every day (more on Sundays), there are literally thousands upon thousands of such ads in every major newspaper in the country. It was the dominant method of non-business sales (or re-sales) for decades. But once again, the Internet has struck to deprive newspapers of much of this revenue. The advent of online sites fulfilling the same functions that the newspapers’ classifieds sections used to fulfill has decimated classified revenues for newspapers. Sites like – to name only the two biggest – ebay and craigslist – now can offer longer ads for much less money (or in craigslist’s case, often NO money), complete with full-color pictures and a host of other tools which make the old, two-line classified ad, with it’s space-induced hieroglyphic abbreviations seem a thing as ancient and quaint as the CD made the gramophone seem.

So newspapers are finding themselves increasingly stuck, partly by their own choices, partly by the relentless march of innovation and technology which has already done in more venerable institutions and industries than newspapers – the buggy-whip industry comes to mind, LOL. They’ve created an expectation in the public’s mind that online content is free, and they aren’t bringing in the money that they used to. Add to that the fact that television has gone to a 24-hour, constant news cycle, and you’ve got real problems if you’re a newspaper.

Unfortunately, though people often realize it far less, that means that the rest of us have real problems, too. Even in the days before the 24 hour cable news cycle, it was understood that TV news often got its actual news from newspapers. Certainly local stations didn’t have the budgets to have bureaus throughout the world; they depended, more often than not, on the newspapers or the wire services for that. And even the larger networks often used the wire services, even in the early days. Some larger and more prestigious newspapers maintained bureaus throughout the country and the world. A very small number still do. But their scope and the number of papers willing and able to do so keeps declining with each passing year. And the 24 hour cable news outlets? Shouldn’t they, at least, have reason enough to have bureaus throughout the world? With 24 hours a day of news airtime to fill, you’d certainly think so. But another sea-change in that market has effectively rendered the answer to that question in the negative. In the days of Edward R. Murrow and Walter Cronkite, news departments on television were not expected to be profit centers for the broadcasting corporations to which they belonged. It was assumed, again, that they were by definition revenue drains on the corporation – something the corporation provided because they knew the public wanted news, accurate news, but which would never be as prized an advertising location as would Ed Sullivan or other entertainment programming which was far more popular. The idea was to use some of the revenue from those entertainment cash-cows to fund the operations of the news department. And it worked, for quite a while.

But when you’ve got an entire, 24-hours a day channel devoted exclusively to news (FOX News, CNN, MSNBC)? Then – although there might still be a generic, overall connection to a larger organization – there IS no other entertainment programming from which you can derive revenue. In short, the advent of the 24-hour news cycle has by definition forced these news stations to compete in the Nielsen ratings against other channels which are offering the modern equivalent of Ed Sullivan. And what has been the result? You tell me: instead of spending money maintaining large and expensive bureaus overseas, the need to be profitable has forced these news services increasingly to rely upon either pre-produced outside PR press-releases (which makes the content untrustworthy as news content), or upon wire services (which in effect turns the newspeople into mere news-readers instead of journalists). And, to grab ratings share away from channels offering entertainment programming, television news now (due to the 24-hour news cycle) has to come with pizazz. It has to “grab” the viewer, just like any good drama or comedy must, if they wish to retain loyal viewers (and therefore ratings-shares). And, when it comes to news, what provides “pizazz?” Is it sober, in-depth analysis of complex policy issues like health care or arms control? No. It’s “look at this plane that crashed” or “hey, a hostage negotiation at a bank in Los Angeles!” Or, even worse, it’s news-based shows (i.e. punditry) which feature an “interesting” host who has a “fresh” (read: anywhere from controversial to offensively manipulative) take on today’s top stories. It’s not even a right vs. left thing, it’s a profit thing. Think of the names: Hannity, Olbermann, O’Reilly, Maddow, Cooper, Blitzer, etc, etc….all these people are hosting hour-long (sometimes more) shows which very rarely actually do any original reporting themselves. Instead, what they do is take the work of other news organizations and filter it through the political or other biases of the hosts and/or the station’s management.

This is news?

If the 24-hour cable news channels are relying increasingly upon news content and reporting generated by other sources (and they are) at a time when a large bloc of those traditional sources (newspapers) are slowly but surely withering and contracting due to changes in delivery methods and loss of ad revenue (which they are), where is the news coming from? I ask that as a serious question, because I think it’s posing an increasingly serious problem. We’ve come smack up against the hard reality that right now, genuine news, of the kind that seeks to avoid bias and simply give the public the facts – and which uses investigative methods to ferret out those who would lie through the media to further personal financial or political ends – is simply not profitable. Perhaps it’s our dysfunction as a culture, but most people would rather get caught up in the drama of a hostage negotiation live on camera than they would read or view a meticulously-researched and reported segment on the causes and potential array of solutions to the health care crisis. Or the financial crisis. Or indeed any large, pervasive and complex issue. It requires thinking and analysis to sort through these issues. And – to be fair – it’s not really reasonable to expect a couple of hundred million news consumers to each, individually, do the same work that used to be done by the Murrows and the Cronkites and their staffs: most people have neither the time nor the inclination to make themselves experts (or at least expert enough) on health care AND high-finance AND theories of criminal justice and incarceration AND dozens of other complex issues, just to be able to sort out fact from falsehood, or relevant from irrelevant, misleading from correct.

That – in the vision of Thomas Jefferson and many others over the years – was the job of the people who get paid to do such things for a living: the news media. They have been expected to hold a sacred public trust. Not just for them to report and YOU to be forced to decide (if they’re telling the truth, if they got it correct, if they considered everything, etc.), but to be upholders of the public interest; to stand up to other large governmental or monied interests who might, left unchecked, visit upon the citizenry a host of ills, whether through mendacious greed or simple stupidity. The news media was supposed to be there to sound the alarm, to sort fact from fiction, to give the people what they needed to know to function as informed citizens in a democracy. The old saying goes that our country is supposed to function with the government making decisions in the public interest, with the consent of the governed. But I’ve always felt that the word informed should be inserted, so that it reads “with the informed consent of the governed.” Because if people are not properly informed, how can they make intelligent choices about what the government should and should not do? Unfortunately, as I’ve tried to demonstrate, that notion of “informed consent” is what the country has been steadily moving away from, and it’s due in large part to the confluence of factors I just described which are taking place in the news media, both print and broadcast. News is not – or should not be – a product to be sold by corporations who are all vying to see who can wring the most profit-per-unit out of it, so that they can increase their market share and be a successful business. Yet increasingly, that is exactly how the news has come to be viewed – and structured – by the very people who own the media corporations. And if the newspapers think they’ve got a problem with how to change people’s expectations regarding assuming that online news content should be free, I submit that we’ve ALL got a much larger problem growing bigger every year; that of our news media coming more and more to resemble or at least to ape our entertainment media. News reporters and anchors used to look and sound like college professors: dour, frumpy, serious and knowledgeable. Today, they look and sound far more often like televangelists…because, in a larger sense, that’s the group they’ve come to resemble more than professors. I don’t know what the answer is, but I’m aware enough to know that we need one, badly, and soon: I don’t want, and our nation can’t afford to have, news delivered by the likes of Jimmy Swaggart. We need I.F. Stone, badly. And we’d better figure out how to get him back, soon.