It’s hard to argue with the New York Times’ decision to tear down the ill-fated Times Select pay wall. (Here’s the paper’s letter to readers.) I never really understood the logic behind the for-pay service, launched in 2005, at a perfect counter-cyclical moment, just as everyone else on the Web was finally realizing that online advertising was beginning to fulfill the outsized promises made a decade before.

At Salon, we were more in sync with the Web’s business cycle: we started offering a for-pay service in early 2001, as we saw ad revenue heading into the toilet. In more recent years, as the ad revenue opportunity swelled, the company ratcheted down its subscription efforts.

So the Times is acknowledging a reality: that, for better or worse, charging for news content online is nearly impossible. The product is available in great abundance, for free, and the extra edge of brand and (frequent, though not guaranteed) quality that an institution like the Times offers is not enough to transmute into paying customers. (Watch Rupert Murdoch flip his abacus to the same conclusion at his newly purchased Wall Street Journal.) The Times was especially foolish in thinking that its columnists were the thing that people would most pay for — when commentary is the form of journalism in greatest over-supply on today’s Web.

Still, let’s be honest: the Web industry is cyclical. No one knows when this decade’s tide of froth will peak. (This event suggests we may be nearing the crest.) But someday it will. It will be 2001 all over again. And at that point all the execs who have been staking their careers on the promise of online advertising will stare at their dwindling quarterly returns and wonder why they hadn’t banked some subscription revenue as a hedge against a downturn.

It is this form of continuous knee-jerk reaction to market fluctuation that dooms the dinosaurs of today’s news business. These companies, like their companions in the broadcast and movie and publishing industries, seem to be incapable of taking risks and making long-term bets on new businesses. So they’re stuck in this dance of death, circling in the quest for a business model, always a little behind the curve.

Of course the Times, and the Journal, and institutions of similar scale and value will survive in some form. But they will never be as important tomorrow as they were yesterday. They can’t help viewing technology transitions as threats. So companies with no “legacy” revenue streams to protect will seize the opportunities that they can’t.

MORE: Jeff Jarvis’s commentary. Staci Kramer’s analysis. At O’Reilly, Jimmy Guterman, too, wonders what will happen to these companies in the next Net advertising dip.
[tags]journalism, media business, new york times, times select[/tags]

This morning the New York Times joined much of the rest of the American newspaper industry in shrinking its pages. The result for it — as for the Wall Street Journal, which made the same change recently — is that the paper now feels like a toy. Oh, sure, we’ll get used to the change. But at a time when all these papers are already watching their gravitas ebbing away, this change — designed to save printing, paper and distribution costs — is a self-inflicted wound.

The Times says it’s losing 11 percent of its column-inches, but making half of that up by adding pages. The op-ed and editorial pages are permanently smaller, though. And look where the Times — like the Journal before it — decided to cut back: the letters to the editor. (Originally, the Journal also buried its letters page far from the editorials; after a hue and cry from its readers, the letters got shoved back to the flip-side of the editorial page.)

Here we are, in the middle of a vast transformation of the news media from a one-way broadcast mode into a many-to-many free-for-all, and, when push comes to shove, the great newspapers of America decide that the one place they can afford to cut back is the paltry few columns they have traditionally dedicated to their readers.

It’s hard to see this as anything other than another twist on a long downward spiral.
[tags]newspapers, new york times[/tags]

It is no surprise that Rupert Murdoch will be the new owner of Dow Jones and the Wall Street Journal: This was inevitable from the moment he put his money on the table (at a share price approaching double the market value).

Nor is there any surprise in the ritualistic pronouncements being heard throughout the world of traditional journalism — beginning on the Journal’s own editorial page with assurances from both the editorial column and the paper’s publisher that standards will be upheld and independence will be maintained, and spreading far and wide. These assertions are inevitable. Equally inevitably, they will be trotted out to be quoted, with suitable irony, the first time the paper’s new owner throws his weight around and demonstrates their irrelevance.

So the Journal will now have an oversight committee of some sort — a figleaf-shaped offering to pacify the consciences of those members of the Bancroft family who felt some remorse at grabbing Murdoch’s cash. Murdoch will pay no more attention to the oversight of such a committee than the president his TV network helped elect pays his congressional overseers. (Congress, at least, has some constitutional authority.)

And why should he? He paid good money for the Journal. The Journal is a property first and foremost. Under our economic system — the one that the Journal has always championed — owners are free to manage their properties. It is this cold reality, far more than any specific fears about how Murdoch will wreck the Journal’s newsroom (which is full of great talent but which many outsiders in the profession see as overstaffed and underworked), that has so many journalists wringing their hands.

The truth is that most professional journalists in the U.S. have lived in a cocoon for decades. The so-called Chinese wall that separates the newsroom from the business side is typically framed as a noble device for insuring that advertiser cash does not influence news coverage. That’s an important goal. But in practice these walls are only as strong as the ethical principles of those who maintain them. Pair a bullying publisher with a weak-willed editor and no wall will help.

Meanwhile, these walls have had a more insidious effect on the newsroom side: they have encouraged journalists to pay no attention to the economic basis for their work. Most editorial employees in major-city newsrooms, protected by their unions and shielded from the “dark side” of business by the traditional wall, end up thinking of their jobs as the journalistic equivalent of endowed university chairs.

This worked as long as the news business remained healthily profitable — and, in many areas, a monopoly. But in the past couple of decades, technological change has knocked over the business’s foundations. The endowments are going bankrupt. The walls are crumbling.

Journalists’ reactions to all this have generally fallen into two camps. Some dream that the old order can somehow be reconstituted. Find an angel investor who doesn’t mind losing money! Set up non-profit newsrooms! Do anything as long as you can find a way to maintain the journalist’s state of purity!

Others have looked at the changing business and said, no way are we going to be able to beat this, so let’s join it. Let’s take the principles we understand — accuracy and fairness and independence and speaking truth to power — and see how we can ferry them into the new environment.

Doing so requires some level of entrepreneurial thinking. You can’t avoid getting your hands a little grubby. You can’t sit back and let somebody else worry about the “dark side” while you keep yourself immaculate. But you don’t get stuck in the powerless, paralyzing backwaters of so many of today’s newsrooms, either. You trade in the infantilizing paternalism of the old-school newsroom for a level of autonomy that is precious.

I made this choice when I left the San Francisco Examiner in 1995; many others have made it since. It’s not easy. But there are plenty of examples of success. Salon is the one I’m most familiar with, but there are a million experiments out there — from big-name blogs and blog networks to tiny local sites to niche news efforts.

Some of these manage to pull off the neat trick of staying afloat and staying ethical; others don’t. But none that aims to pay a staff has the luxury of pretending that it’s not a business. Now the Wall Street Journal’s journalists face the same choice.

I don’t trust Rupert Murdoch. He has a long and well-documented record of using his properties to further his own agenda. But I trust that there are a lot of smart writers and editors at the Journal. Either they’ll get an opportunity to reshape their paper in a way that suits the times and their own consciences — or they’ll find themselves in the great newsroom diaspora with the rest of us, helping figure out new models for the future.
[tags]journalism, wall street journal, dow jones, rupert murdoch, new media, newspapers[/tags]

Nick Kristof’s New York Times column today (behind the pay wall, alas) summarizes the findings of a book by Bryan Caplan titled “The Myth of the Rational Voter: Why Democracies Choose Bad Policies.” Kristof quotes this summary of the book’s thesis, in Caplan’s words: “This book develops an alternative story of how democracy fails. The central idea is that voters are worse than ignorant; they are, in a word, irrational — and vote accordingly.”

What are the ways in which voters are “worse than ignorant”? Kristof summarizes Caplan’s complaints of “systematic error” in voter rationality: Voters share “a suspicion of market outcomes and a desire to control markets.” They have “an anti-foreign bias,” evidenced by an unwillingness to embrace free trade wholeheartedly. They share “a neo-Luddite bias against productivity gains that come from downsizing or “creative destruction.'” And they have a “pessimistic bias, a tendency to exaggerate economic problems.”

Gee, it sounds like the real problem Caplan has with the voting public is that they don’t agree with the program of conservative economists!

There are a couple of ironies here.

There’s something hilarious about a market-oriented economist complaining about “irrational” behavior. Free-market theory depends on the notion that market participants are rational actors; if they’re irrational, then the whole theory collapses — the market doesn’t behave predictably. For classical economics to work, we need to trade in the populace and get us a better one. The whole thing reminds me of Brecht’s sarcastic suggestion that “the government dissolve the people and elect another.”

But let’s not knock the rabble so fast. Those voters may not be so irrational after all. Free-market economists wish that voters whose jobs are threatened by foreign competition would somehow become farseeing altruists, and trust that the general benefit that free trade provides might eventually lift their boats sometime after the same tide put them out of work. But these “ignorant,” “irrational” voters insist on trying to protect their jobs. The nerve! Why should they think it’s all right to act in their own short-term self-interest? Oh, right, it’s only CEOs and hedge-fund investors who have the economists’ blessing for short-term, self-centered thinking.

Personally, I’m reasonably comfortable with the pro-free-trade argument. But you won’t find me sneering at those who sense that the dynamic of the global economy is not doing them or their families any good.

Caplan is an economist at George Mason University, which (among many other things) is a center for conservative libertarian thinking. His Web site includes a “Libertarian purity test” and his “intellectual autobiography” is replete with references to Ayn Rand — so his perspective, while blinkered, is hardly surprising. But I wonder why Kristof presented the economist’s ideas so uncritically.
[tags]globalization, economics, bryan caplan, libertarians[/tags]