The commercial advertising model distorts news values
If the advent of the Internet has taught us anything, it is that long-accepted assumptions often need re-thinking. For decades, local newspapers have relied on an subscriber/advertiser business model. But do those revenue streams still work in the digital age? Is there another model that might work better?
The debate about charging visitors for online news rages on. But Wired’s Chris Anderson makes sense in his new book Free when he argues that digital goods in a competitive online market will inevitably drive the price down to zero. That logic suggests charging people for local news online is a non-starter.
Specialty business publications and national news sites such as the New York Times may be able to extract fees from subscribers. But the moment my local newspaper starts charging for online news, I want to have my free online news publication ready to grab their market share. (Which explains part of the rationale for starting Lansing Online News.)
But what about advertising? If you cannot charge for a subscription, surely you must squeeze every possible dollar from your advertisers. Doesn’t the income from advertising outweigh any drawbacks? And, if not, what other options can possibly fill that revenue void?
Advertising generates money – but at what cost?
U.S. newspaper print and online advertising revenue for the third quarter fell 28%, from $8.9 billion last year to $6.4 billion in 2009, with print taking the greatest share of the hit. Online advertising revenue declined proportionately less, by 16.92%, but total online revenue was only $623.1 million dollars, less than 10% of the $6.4 billion total.
Yet the biggest cost may be that pandering for ad dollars inevitably costs news organizations a huge chunk of their freedom and their credibility. The corruption may be subtle or blatant, but especially when times are tough, persuading businesses to buy ads means tailoring the news coverage to their tastes.
This often means ignoring stories that businesses don’t like. A series on “How to sell your own home” risks costing you ads from Realtors. The same problem applies to the piece on how to outwit your local car dealer when buying that new vehicle.
Such sins of omission can be hard for consumers to spot, since they tend not to miss the stories they never see. But worrisome as well is the pro-business, elitist bias in the news that is covered. Dependence on advertising means the business community enjoys an access that other constituencies don’t, through interaction with the sales staff and through their presentations at editorial meetings at local newspapers. The increasing professionalization of the jobs of editors and reporters also means they are much more likely to share the background, class and income of business people than they did before.
Newspapers today always have a business section, but never a workers’ section. (And don’t you dare ask why, you commie.) Even our town’s alternative newspaper increasingly sounds like it was written by the Chamber of Commerce, in large part because it was pander to advertisers or die.
Though they may not be able to articulate why, research shows people are increasingly convinced that “the media” are not on their side, for good reason. News organizations today express corporate values more than community values, and people sense the change.
While $600 million in ad revenue per quarter is hard to dismiss, finding an alternative revenue stream could liberate news organization from tying themselves in knots to keep advertisers happy. Unless they do, they fulfill the old joke that says we’ve established what news organizations are – now it’s just a matter of negotiating the price.
And freeing news organizations from being beholden to advertisers might liberate them to innovate. This could usher in a new era of online news products that are more experimental, more relevant and more reflective of their communities – and also more trustworthy. Community values, not corporate values. (I can dream, can’t I?)
Selling ourselves – literally
Most of the discussion about online news business models argue that soliciting advertising and making visitors pay are the only two revenue streams with the potential to keep a publication afloat. What else is there? As someone who has been swimming in these cyberwaters for more than a dozen years now, I think the answer for online news lies in finding something new to sell – and that means selling ourselves, by marketing our skills and our knowledge.
Using Lansing Online News as a fledgling and imperfect example, our resident brain trust of Bill Castanier, Wes Thorp, Chris Singer and I collectively know how to:
- Tell stories (through text, images, video, audio and evergreen packages that includes multiple elements)
- Blog
- Optimize images for the web
- Produce graphics and simple animations
- Shoot and edit video for online distribution through YouTube
- Develop narrated slideshows
- Conceptualize and execute interactive elements to engage the community using free tools
- Install and customize free content management systems
- Build well-designed web pages
- Market our site using social networking
- Evaluate and tweak our performance using tools such as Google Analytics and YouTube’s Insight
- Learn new digital skills as they emerge (we’re working on Google Wave)
- Show newcomers how to do what we do
My first thought is: “Damn, we’re good.” But my second thought is: “Wow, what a tremendously marketable set of skills and expertise.”
During my years at Michigan State’ School of Journalism, I have watched as professors pretzel themselves to become excellent teachers on top of producing quality research – and fulfilling their administrative duties on committees. The job isn’t just doing one thing, but doing many things well. And done well, those various duties can actually support and enrich each other.
So why not re-think the job of reporters and editors, transforming it into a multi-task position that combines journalism, consulting and teaching? Use citizen journalists to provide more of the shoe-leather, breaking news, raw material news coverage. Re-position of the role of reporters and editors into a reporter-editor position. The job would include original reporting, but with an emphasis on adding context analysis to their reporting and the “raw material” from citizen journalists. While that would become their core function, the job would also require consulting and teaching as well.
Corporate Consulting and Training
Our core group of editors and reporters could spend part of their time providing consulting and training for corporate and non-profit clients, not as a separate sideline but as part of the job. Instead of creating an advertising department, we would become our own marketing team.
Some members might be better at selling us directly to clients. Others might be better at creating a fee structure and marketing materials, including online banners and buttons to market our services on our own site. But all would contribute on top of producing quality journalism.
It will require significant discussion to figure out roles and responsibilities, as well as financial strategies that ensure everyone who participates in the marketing and delivery of our services receives a fair share of the income generated.
On-Site and Online Education
A number of top-tier colleges and universities have already jettisoned their journalism schools and departments over the years, in part because they view the job as more of a craft than a profession. And how long before more and more students and parents balk at spending tens of thousands of dollars on a degree in a field where jobs are disappearing at an alarming rate and entry-level jobs rarely pay more than $16 an hour in a field that is relatively small to begin with?
However, for us, this may be a case where opportunity comes out of crisis. Our country will always need new journalists, and offering on-the-job training may be an economic winner for the news organizations and workers alike.
Some great journalism has been produced over the years by reporters who didn’t go to college but who rose up the ranks from humble beginnings as a “copy boy.” Gannett’s mobile journalist – the mojo – might be the digital equivalent today. But in our credentialed society, news organizations will need to invent ways to provide certified educational credentials that quantify and qualify the instruction the interns and apprentices receive.
Lansing Online News is discussing how we can grow into offering in-person and online instruction. Over time, we might want to become a specialty school, the digital equivalent of the Specs Howard School of Broadcast Arts, so that our students could have access to financial aid. The goal would be to offer low-cost instruction and on-the-job training to fledgling journalists and those people in the field who need digital skills.
We may also want to offer online instruction. We have already reserved the domain name for the Online Media Institute. The open-source program called Moodle would allow us to offer online courses with a minimal investment. And a simple PayPal shopping cart can make collecting fees easy, too. The challenge will be to integrate the teaching wth the journalism, but doing many things well is what journalists have always done.
The good news about both consulting and teaching is that they provide incentives for us to keep pace with the field, and also to innovate and experiment. Advertisers typically want news organizations to maintain a predictable status quo, but our consulting and educational clients will want us to keep pace and even to lead in the digital world.
Good news as well is that reporting often help us learn how to make the most of new digital and social networking tools. Journalists were arguably the first to discover the virtues of Twitter. When Shawn Smith was working at MLive.com, he talked about how he could keep track of breaking news through the tweets from people at the scene.
Back to a Blue-Collar Job
The revenue from a consulting/teaching model may not be enough to keep editors and reporters in the style they have become accustomed to. But maybe that’s a good thing. In a digital world, do local news organizations really need to be housed in marble buildings downtown? Once they shed their environmentally and economically unsound print versions, local news organizations can run leaner if not meaner.
Journalism has always fared best when when it is filled with smart and nosy folks who do the job as much for love as for the paycheck. (Or, let’s face it, because we are too quirky or cranky to do anything else.)
Like police officers, reporters used to come from the communities they served. Famed columnist Sydney Harris and ABC anchor Peter Jennings were both high-school dropouts. Reporters today come from universities, and few have any connection to the communities they cover.
While a college education has undeniable benefits, it comes at a price, both economic and cultural. In my role as coordinator of the Victims and the Media Program at MSU’s School of Journalism, I often found that today’s rookie reporters were horrified if not traumatized by the realities of urban crime, which made it hard for them to identify with victims. In the past, reporters from the community felt they were telling the stories of friends and neighbors. Today’s suburban, college-educated reporters instead often feel they are covering people who inhabit a world they barely understand.
Expanding the pool of reporters to include citizen journalists from the community helps ensure compassionate and complete coverage of all groups within the community. And offering educational credentials for the work could offer citizen journalists a ladder up.
Freed of crushing school debt, a new breed of reporters from the community could afford to work for less, earning credentials that would have value in the broader society. By re-inventing the blue-collar model for a digital age, local news organizations could reinvigorate the job through consulting and teaching so that they could pay enough to keep those creative, contrarian storytellers doing what they love doing.
And if it’s done mindfully, it could be a way for us to sell ourselves without selling out.
I am intrigued by the idea of the online media institute. The idea you propose for journalists is that they participate and learn from your online news outlet rather than go back to school for a Masters degree.
Also, I am curious because it was not clear to me what role educators such as myself play? Are you suggesting that students get training from you and create their own startup and never attend college?
The issue is whether college is affordable for most young people who want to go into journalism. The tuition keeps going up as the wages go down. The Online Media Institute could become a competitor or a collaborator. My experience in academe persuades me they would find it hard to become a partner. The institutional, bureaucratic and economic barriers are immense. But I cannot see how colleges and universities can continue to produce students who are crushed by debt. An initiative such as ours can only gain traction if the field perceives a certificate from us as being as good or almost as good as a four-year degree. Could that happen? Maybe, particularly if universities and news organizations keep shedding talented folks who can teach.
It could be a piece of a solution. It certainly should be tried. And everyone should root for its success.
But I’m fairly cynical regarding a model so deeply rooted in altruism.
It’s not that it can’t produce good journalism. It can. But can it support enough good journalism?
Your potential clients must be people similarly motivated by altruism. You are training them for a task that depends for revenue on teaching other people to do the same task. That’s a fast way of saturating a market.
Potential clients are not going to pay you much because their return on investment is psychic income.
That’s great, but it won’t pay the mortgage nor the kids’ college tuition. There are some people willing to make that choice and others willing to dabble in journalism part time and who are perhaps willing to kick you a few dollars. I guess the hope is to find clients who need digital journalism skills to pursue something that’s not journalism, but pays the bills.
Of course a BIG paycheck has never been the motivation for most journalists. But a REASONABLE paycheck is a definite motivator for most of them.
And then we have the tired cliche: “Can this economic model support a bureau in Baghdad.” Of course not. But perhaps a better question to ask is, “Can this economic model support coverage of the local school board.” Maybe. And that’s reason enough to give it a try.
I am puzzled by this line: “But the moment my local newspaper starts charging for online news, I want to have my free online news publication ready to grab their market share.”
Why?
There isn’t any market there worth grabbing. The market just demonstrated that what you offer has no economic value. And if altruism or frustration with the coverage of others is the motivator, you can already give good content away for free.
My, I do sound cynical. So let me repeat my initial statement: It could be a piece of a solution, it should be tried and we all should root for its success.
Concerning Dave Poulson’s argument, remember that education and training of other journalists is only part of the proposed income mix. Consulting and training for other for-profit and non-profit groups on skills and on how to use social media might well end up the largest share of the business. The Online Media Institute might end up training more people outside the field of journalism than in it.
For me, the issue isn’t altruism. I suspect that the re-tooling of our economy may well mean that more and more people will have to rely on two or three income streams to stay afloat. And this might be one of them.
And, as always, I would suggest that news organizations rarely do the kind of reporting you are talking about.
I agree that “market share” may be the wrong term. You want your audience to grow because it enhances your credibility as experts that other should hire to help them get their message out to the community. Your popularity serves as a way to market your services, and you also need more and more people to see your site since that it where they learn about your services.
Al Neuharth said famously, “Get the t*** over the fold.” He’s wasn’t altruistic. You could easily argue USAT was the first news aggregator. Altruism won’t work. People ain’t like that. Wish it were so, but it isn’t. Give them something they want and can’t get anywhere else, and charge a reasonable price for it. Simple as that. If they don’t want it, even if they SHOULD want it, isn’t going to fly.
Great stuff here