The demise of Times Select (see previous post) has served as a milestone moment for the continuing debate over the future of news online. Kara Swisher says it’s inevitable now that her paper, the Wall Street Journal, will follow the Times and tear down its pay gate. Jay Rosen offers a good overview of the discussion. His conclusion is optimistic:
I think real value is in weaving yourself into the Web. “Conversation” is blogger’s shorthand for that larger idea…. Advertising tied to search means open gates for all users. It means link rot cut to zero, playing for the long haul in Web memory and more blogs because they are Web-sticky.
If you read me here you know I agree. But of course there’s a “but.” And the “but” is all about money. The “but” is something that many of the believers in the bloggy future of news don’t always confront head on.
When you accept that the future for news on the Web is open and does not include much subscription revenue, you also have to accept that your revenue online isn’t going to match your old revenue; it won’t support as many full-time staff. Maybe it will improve steadily, but I don’t think it will ever reach the equivalent of print.
This is basic economics: in most cities, newspapers were monopolies or near-monopolies on paper for the last few decades. They’ll never be monopolies online. Or maybe a very small number (2 or 3) newspapers will become near-monopolies online by establishing their brand and authority — surviving into the Web age while the rest of their peers die off, as the Web replicates for the entire U.S. the same process of consolidation that happened, city by city, in the second half of the 20th century.
I write this with some experience from the trenches at Salon, where we had what I would consider hands-on, ahead-of-the-curve experience in trying to support an online-only newsroom with online-only revenue. For all Salon’s quality and achievements, that has always been an uphill fight.
Institutions like the Times will face the battle with all sorts of resources Salon lacked. Still: the near-monopoly newspaper always had subscription revenue, display ad revenue and classified revenue to bank on. Google ads can’t match that today, and probably not for a long, long time. Display ads placed on pages readers find through Google are better. But right now, all of the online advertising an open newspaper Web site can garner is at best icing on the old three-layer cake. If that’s all you need, great. But each of those three old revenue streams has already started to dwindle, and if you take the long view and accept that they’re all likely to vanish eventually, then you face inevitable shrinkage.
None of this is any argument for simply behaving as if the Web weren’t here and rolling up a drawbridge against change. It is instead an exhortation for both sides of the whither-journalism debate — the blogosphere and citizen’s journalism believers, and the old-school newsroom brigade — to come to terms with the bottom line of the journalism business today.
We know that the old newspaper business is on the way out. (We don’t know how fast but we know where things are heading.) We knew how to pay for newsrooms under the old business. But we still don’t have much of a clue how to take a newspaper-scale newsroom and support it on the Web.
Given all this, I think it’s important not to sugarcoat things. Even a well-managed transition from print to Web will diminish newspapers and shrink newsrooms. It’s understandable that newspaper workers are fearful: their jobs are indeed on the line.
If their profession has a future — and of course it does — the answers for how to support that future are unlikely to come from the sort of old-line newsroom management that gave us Times Select and so many other ill-fated big media schemes on the Web. It will come instead from some of the thousand and one little experiments in the Web journalism business that are flowering today.
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Hi Scott! Okay, so if I read you correctly you think I am being somewhat cavalier by celebrating the demise of Times Select without worrying about where the lost revenues are going to come from. Maybe I am being cavalier; if so that’s something I should correct. But can you give me some help correcting it? Specifically, what I should I do to “come to terms with the bottom line of the journalism business today.”
As you probably know, I don’t disagree at all with your analysis: Online revenue is not making up for lost print revenue gained under monopoly conditions. Web advertising will grow but not at anything like a replacement rate. Reyling on one revenue stream–web ads–is risky; and when there is a downturn, as we know there will be, the results are likely to be very ugly. While print revenue is slipping away, it doesn’t appear possible to charge online, whether you’re Slate, The Chicago Reader or the New York Times. An economic model that would pay for news staffs of the same size is nowhere to be found.
And so after I acknowledge all that–and I do acknowledge the bitter truth of it–what am I supposed to do, as a writer and observer of the scene…. I mean to show that I am not being cavalier, to “come to terms” with the bottom line in financing good journalism?
Should I work on diminishing people’s expectations of what journalism can in the future be? Would that be helpful?
Should I put my hands on my hips, declare real journalism expensive, and ask other people, the people crowing about the Internet: hey, where’s the money going to come from?
Should I be thinking up new revenue opportunities for the people at news companies who get paid to think about revenue opportunities?
Should I be grabbing venture capital and spending it on business models I have no reason to think would work?
I should not sugarcoat it; that much I get. Don’t (cavalierly) assume that Web revenue will pick up the slack when so far there is not much evidence that it will. Don’t portray the demise of Times-Select as a triumph for the Web when it’s really just the sad end of a misguided strategy that was ill-matched to the Web. I get that. I do.
What I don’t get is what you have in mind by coming to terms with the bottom line in the journalism business today, by meeting it “head on.” I guess I don’t know how to do that. So I have done thing I do know how to do: warn against legacy media thinking, discredit the curmudgeons who are anti-Web or willfully ignorant of it, denounce dumb ideas like “make Google pay reparations,” describe as best I can how I think the Web works journalistically, and try to figure out how a combination of pro and amateur might create new firepower, since there is no economic model for the old firepower.
That’s my version of head-on. It is neither satisfying nor adequate; that much I know. I agree with you that it does not look like a solution to anything. But it’s the only course I could figure out for coming to terms with where the business is. There seems to be some deeper coming to terms that you wish to see happen. Can you give us a hint?
I really didn’t intend this post as a direct critique of or riposte to yours, Jay — it was more a matter of using yours as a jumping-off point.
What I hoped to do in this post was say, “Hey, everyone, while we celebrate the ‘demise of Times Select as a triumph for the Web,’ let’s just remember there’s this elephant in the room — that the business model of old-style journalism is disintegrating in our fingers and after 13 years of the Web industry we still don’t know how to replace it.” I don’t think of you as one of the people who is blithely ignoring, or even cavalierly downplaying, that point. I just found your post a convenient starting point to review it. If it seemed like I was somehow targeting your post as a bad example, my apologies.
To the extent that I hope for a “deeper coming to terms,” I guess I see that as a matter of remaining conscious, throughout all our celebrations and explorations of the Web’s new freedoms and possibilities, of two things: One, that we’re living through one of history’s big industrial transformations, and those transformations always carry a human cost, and it’s often very convenient for those who benefit from such transformations to put the human cost to the back of their minds. Two, that it’s worth acknowledging that as of right now, it looks like the “newsroom of the future” — whatever it is and however it evolves in this new media space — might well be one with lower wages, less job security and fewer overall paying jobs than the newsrooms of the past. It might also be a place with more freedom, more room to innovate, more surprises and more discovery.
None of us knows how all these pluses and minuses will balance out. Let’s just all try to keep a clear inventory of all said pluses and minuses as we explore what our programmer friends call “the problem space.” I’ve always found your inventory pretty thorough, Jay.
It is pretty clear that journalism is in a Schumpeterian period of creative destruction, and those who think otherwise are in for a world of pain. The question is what to do about it. Even those of us who see it may be in for a world of pain.
I do find all the exploration that is going on in trying to find new ways to sustain journalism is exciting, even though it isn’t at all clear that anyone has found a viable model yet.
Of course, as a software guy, I am a congenital optimist, in spite of 15 years evidence to the contrary.
I know you weren’t really criticizing me or my post. Your response makes a lot sense: don’t let the elephants in the room go unnoticed, keep the (very) human cost in mind, recognize that a lot fewer people might get paid to do journalism in the years ahead, even as more people do it and the field experiences a creative re-birth.
So if I do that I can still dance on the grave of Times-Select? :-)
And what do we have to do to get comment preview in this place?
I probably have to install a WordPress plugin. I keep figuring if I delay long enough they’ll just add the feature to the core product and then I won’t have to bother…
Mike over at TechDirt http://techdirt.com/articles/20070920/200932.shtml has an interesting perspective on this.
Hi Scott,
I doubt the advertising model will be satisfying in the future. And therefore I exppect a kind of micropayment system to come up and replace it, at least partially. So: you have a contract with a couple of “newspapers” (or syndicates), and you agree to a payment of let’s say $0.05 per view, without a fixed fee (as was the case with TimesSelect). Something like that.
What do yu think?
Mat