Needed: New Business Models for the Press

The business of the press – or the mainstream media – has undergone such massive change in recent years. While many argue that newspapers and other traditional forms of media were just blindsided by the internet (just like Blockbuster might have been blindsided by Netflix, or CDs might have been blindsided by MP3s and Napster), Shirky argues that the newspapers actually did see it coming:

“The problem newspapers face isn’t that they didn’t see the internet coming. They not only saw it miles off,
they figured out early on that they needed a plan to deal with it, and during the early 90s they came up with
not just one plan but several.”

So then what happened? Well, Shirky argues that the newspapers didn’t listen to the “pragmatists” within their organizations, preferring to listen to the “radicals” who in this case got it wrong. The newspapers did not completely understand how the future would play out with the internet – how the advertising would become more efficient, how the ability to share content would grow, and how micropayments would become acceptable – as a result of which the newspapers decided to just give themselves a “a digital facelift” instead of actually re-organizing themselves completely and re-creating new business models.

Not only will the focus have to shift away from newspapers to actual journalism, the news organizations themselves will become less relevant, as the “future of news” (FON) moves closer toward a network-driven system of journalism. As Starkman points out, the FON consensus is essentially anti-institutional – a key feature we have seen pervading the internet as it disrupts industries: “old institutions must wither to make way for the networked future.” The result has been that “news outlets have been forced to step down from their pedestals” as communities actively take up journalism. At the same time, while this is largely seen as a positive development, the proponents of this FON consensus have failed to outline how the new community journalists will carry the “public service load” that journalists like Ida Tarbell so ably carried.

Salon Dou attempts to paint a different picture of the future, that is not as revolutionary. He argues that the effectiveness of blogs (a manifestation of the network-driven system of journalism) will remain “a function of the relationship of the netroots to the media and the political establishment” forming what he calls “a triangle of blogs, media, and the political establishment.” Looking at the present-day situation, he argues that even though bloggers are increasingly the ones who may draw attention to a certain issue first or even lead to a temporary spike in interest in a particular issue, “it is still the Russerts and Broders and Gergens and Finemans, the WSJ, WaPo and NYT editorial pages, the cable nets, Stewart and Letterman and Leno, and senior elected officials, who play a pivotal role in shaping people’s political views.” Dou still admits that bloggers, while unable to “change conventional wisdom on their own” can nevertheless “exert disproportionate pressure on the media and on politicians” and ultimately need the support of the mainstream media and the political establish to change conventional wisdom.

I am tempted to argue that Dou’s vision of the future is more realistic – but then I find myself questioning my own ability to really shed the shackles of the past and look into the future. Are Dou and I both just trying to hold on to whatever vestiges of the past we can hold on to? Is there really something different about newspapers when you compare the demise of the Blockbusters and CDs of the world? Those were but distribution channels or formats that were popular at one time, only to be replaced by more efficient distribution channels (e.g., NetFlix) and easier-to-access formats (completely digital formats such as iTunes) with arguably better business models (pay per song vs. buying the whole album). If we believe that music or movies are essentially similar to news, then we’d have to believe that newspapers might go the same way – they would have to adopt more efficient distribution models for their content, which in turn has to be in easier-to-acess formats that requires users to pay only for the songs (or the articles) they wish to access.

Of course, just like we have not stopped consuming music or movies, we will not stop consuming news – which makes me tend to agree with the argument that newspapers are not relevant (they are just a format), journalism is. And just like piracy of music once threatened the viability of musicians who relied on the royalty fees from sale of CDs etc.,  bloggers and other networks of new-age journalists seem to be threatening the viability of journalism. But just like I continue to listen to the music of the best musicians (who in turn still tend to be the Miley Cyrus’es of the world) but on YouTube or iTunes (instead of CDs), I will likely continue to read the articles and reports of the best journalists but on or Google News (instead of print newspapers).

If that holds true for others, then news organizations have to realize that it must be them who comes up with the “Youtube” or “ITunes” or the “Netflix” for news – but I think this is where they have already starting losing out to “Twitter” or “Flipboard” or other social sources of news. There are different models that Youtube, ITunes and Netflix adopted, so its not that news organizations do not have different business models to play with (e.g., subscription as with Netflix, pay-per-item as with iTunes or free as with Youtube) – its just that they need to be bold enough to take that step, sooner than later.

Already startups that claim to be the “Netflix for News” (where “a majority of the $5 monthly subscription fee will go directly to that writer, ensuring that the most popular contributors are also the most successful”) or the “iTunes for News“. At the same time, Dou’s vision is also being experimented with (“look at the model of AllThingsD, the technology blog, which is run under the umbrella of the Wall Street Journal by gadget guru Walt Mossberg and Kara Swisher, the tech business news terrier”).

Regardless of which model they experiment with, think like a startup they must!


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