Anyone who stands back and looks at the environment in which the news lives can see the problem. Derek Thompson, a thirty something editor at The Atlantic, did and then sketched a pretty clear picture.
The only flaw in that assessment is the use of the word “may.” There is no may.
When the internet opened the door for anyone to be a publisher or news organization sans the staggering cost of obtaining a printing press or a radio/TV station, it also opened the door for anyone to sell advertising.
Forget all the Russia hysteria. That’s post-Cold War nonsense that ignores the reality of why the Russians lost the Cold War: Market economies were too powerful.
Markets respond to economic opportunities better than politicians, and clearly there were a lot of businesses noting the revenue potential demonstrated by those Macedonia kids writing fake news in 2016.
“Amazon’s ad business exploded in the past year; its growth exceeded that of every other major tech company, including the (Facebook-Google) duopoly,” Thompson wrote. “Apple is building tech that would skim ad revenue from major apps such as Snapchat and Pinterest, according to The Wall Street Journal. Microsoft will make about $4 billion in advertising revenue this year, thanks to growth from LinkedIn and Bing. Uber is reportedly getting into the ad business as it eyes new revenue sources to beautify its forthcoming IPO. AT&T is building an ad network to go along with its investment in Time Warner’s content, and Roku, which sells equipment for streaming television, is building ad tech. Oracle, Adobe, and Salesforce are using their cloud technology to collect data that could be used for ad targeting, as Axios reported.”
All of these businesses – to return to the ecology of economics – are fighting for a piece of a niche once occupied solely by mainstream media. The habitat can only support so many players.
All habitats have a limited carrying capacity. This is as much a reality of economics as of ecology.
You can see it right here in Alaska where new entities from Must Read Alaska to The Midnight Sun to The Alaska Landmine to the AK Headlamp to those like craigmedred.news and the former Alaska Commons have tried to weasel their way into the news niche, and never mind the proliferation of something-like-news sites on Facebook catering to niches within the niche.
Or the reality that some on Facebook have become better at starting public discussions than the mainstream media. News organizations once prided themselves on encouraging community conversations. Now they are too busy rewriting the daily flood of government press releases to even contemplate a role as thought leaders.
And still they are fading in once was their exclusive niche.
A once robust KTVA-News, which thought it could profit as a free alternative to a paywall barricaded Daily News, has been forced to lay off staff, and the Daily News – bought by the Binkley Company for the bargain-basement price of $1 million and then downsized to near sustainability – remains in a fight for its economic survival.
Columnist Charles Wohlforth, the public face of the newspaper, is the latest to be let go. Wohlforth couldn’t bring himself to publicly admit it, instead writing a good-bye column pondering whether Alaska “is dying”, but his departure was about budgetary realities.
A writer who truly believes “opinion journalists…can be the conscience of the community” doesn’t quit because its best to “leave before the column goes stale.” No way. Righteousness has an unlimited shelf life.
And never mind that Wohlforth has been hinting to others for months that his relationship with the ADN was near an end because of the tough, tough problem of turning a profit on news in today’s market.
Wohlforth is an ADN loss. Love him for his left-leaning political history or hate him for his endless name dropping, his pomposity, and his inability to free his news analysis from the shadow of his liberal echo chamber – remember Wohlforth’s story for The Daily Beast headlined “Why Hillary Clinton Could Actually Win Alaska Over Donald Trump?” – the guy got out of the office, talked to real people, and wrote about ideas.
You don’t have to like somebody to appreciate that. Writing about ideas is what journalists did back in the old days when there was enough money to afford time to think.
The mainstream model
News businesses, as most people alive today know them, were built on revenue derived from the sale of advertising. Lots and lots of advertising.
Reporters, especially when under fire for writing anything objectionable to anyone, used to joke that “we only write the filler to wrap around the advertising.”
They were largely right.
Aside from front pages – which were reserved solely for news until newspapers really, really, really needed money and sold what they had once considered their soul – news served as newspaper filler.
Newspaper ad salesmen and women daily hit the streets to sell as many ads as they could. The ads were inserted into mock-ups of what the next day’s paper would look like, and whatever space was left was given over to the “news.”
Many newspapers pushed right up to that 75-percent limit, which included advertising inserts. Advertising inserts were a financial bonanza for newspaper owners and a benefit to newspaper readers.
Had all that advertising been squeezed onto the news pages, the news might have been hard to find. Just imagine a newspaper with every page three-quarters full of advertising.
Advertising made media a highly profitable business in the days when newspapers and radio/TV were far and away the best way for businesses to reach potential customers. Newspapers roared through the 1990s and into the new millennium with profit margins over 20 percent.
Media companies were the envy of other businesses. Then came the internet.
Today, for the newspapers that survive, the margins are in the single digits, and the only way profits have been maintained at all is through downsizing. Journalism jobs at daily newspapers decreased 42 percent from a peak of 56,900 in 1990 to 32,900 as of 2015, according to data from the American Society of Newspaper Editors (ASNE).
All of this even as the world of news has expanded into the realm of unlimited, online data. Clearly the newspaper-based, mainstream, multi-media organizations can’t keep shrinking their way to success forever, but Tacoma publisher David Zeeck hinted.
“While there are more than 300,000 households in Pierce County, according to the most recent Census data. The News Tribune has only slightly more than 5,000 digital subscribers.”
Suffice to say, online subscriptions are hard to sell in part because of news alternatives in most communities and a big problem with soft paywalls. Internet savvy Americans now know that private or “incognito” browsers offer an easy way into the circle of wagons.
If a website can’t recognize a computer’s address, it can’t count how many times someone has visited. It thinks each visit a new visit, and as a result never posts a demand the viewer subscribe or pay before continuing to read.
Some news organizations, the Boston Globe being one of them, now block private browsers. As of this time, there has been no objective analysis of how that strategy is working in a world where online readers have long been conditioned to believe news should be free.
And in a world where there are a lot of options to go find a different version of the same story if a paywall is encountered, it appears that many people do just that.
Play things of the rich?
About all that is obvious about paywalls at this time is that they are one way to ensure a story gets read less. How much less is open to debate, but it is certain that some people directed to a paywalled link from Google or Facebook or Bing or Uber or craigmedred.news are going to click it closed and move on: “Sorry, your story looks interesting, but not that interesting.”
Enter the “affluent patrons,” as Thompson calls them – the Rogoffs, the Benioffs of Time magazine, the Jiaravanons of Fortune magazine, and the others – who have an ego interest in keeping the news free. They want the maximum number of people reading what their hirelings do.
As Alaskans learned with Rogoff, however, these people tend to be a little fickle. Rogoff had what was for her a longterm sustainable news operation in the online-only Dispatch News founded by Hopfinger and ex-wife Amanda Coyne, but she tried to leverage it into an Alaska media empire with the purchase of the Daily News and in the process turned the whole thing into a massive business failure.
“A patron is as person,” Thompson observes. “A person can change his or her mind—and often does. Chris Hughes junked The New Republic when losses eclipsed his idealism. Phil Anschutz snuffed out The Weekly Standard. Michael Bloomberg has made noises about selling off his political desk if he runs for president, or offloading his entire eponymous media empire, which employs several thousand people.”
Thompson goes on to make something of an argument for a return to a somewhat different style of patronage – political entities or interest groups. As a potential model, he cites the “party press” era when political parties financed editors and writers to cover the news and often “to publish vicious attacks against rivals.
“That era’s journalism was hyper-political and deeply biased. But some historians believe that it was also more engaging….As Gerald J. Baldasty, a professor at the University of Washington, has argued, these newspapers treated readers as a group to engage and galvanize. Perhaps as a result, voting rates soared in the middle of the 19th century to record highs.”
Thompson doesn’t explore the problems a modern party press might run into with campaign finance laws. Alaska law, for instance, frowns on any coordination between independent, expenditure-only, political action committees (SuperPACs) and candidates.
A news organization funded by SuperPAC advertising while covering a candidate supported by the same SuperPac could face accusations of acting as a go-between engaged in coordinating the two.
Still, there is no arguing with Thompson’s view that the party press was entertaining, and that some of the advertising-funded news operations that followed resorted to a what he called “a neutered, detached style of reporting—the “view from nowhere”—to avoid offending the biggest advertisers….Large ad-supported newspapers grew to become profitable behemoths, but they arguably emphasized milquetoast coverage over more colorful reader engagement.
“As the news business shifts back from advertisers to patrons and readers (that is to say, subscribers), journalism might escape that ‘view from nowhere’ purgatory and speak straightforwardly about the world in a way that might have seemed presumptuous in a mid-century newspaper. Journalism could be more political again, but also more engaging again.”
Maybe.
Then again, such a shift might only add to the partisan acrimony on which American democracy is at the moment high centered.
The U.S. government shut down is now into its fourth week as Trump and Congress battle over border security with the president proclaiming that “when it comes to keeping the American people safe, I will never, ever back down,” and Speaker of the House Nancy Pelosi insisting that building ever more of a border wall between the U.S. and Mexico to stop illegal immigration “is an immorality.”
Impartial arbiter
Against that backdrop, there would appear room in the market for an entity that could at least establish the agreed upon facts around which to frame national, state or local policy discussions.
But the media in the craziness of the times might already have abandoned that ground.
“Every once in a while, somebody asks me whether we’ll ever get back to a place where the country can agree on a ‘single set of facts,'” Thompson wrote. “Those asking the question tend to be nostalgic for the 1950s, when they could count the number of television channels on one hand and rely on Walter Cronkite and a local media monopoly to control the flow of information.”
He got the nostalgia right, but the era a little wrong. It’s more a nostalgia for the Space Age when facts mattered because Americans understood human progress (and sometimes life and death) hinges on them.
Facts still matter. The problem is they get in the way.
Trump is right about the lack of barriers to illegal immigration. Almost 70 percent of the U.S.-Mexico border is unfenced.
“Some Texans have been waiting so long for the government to secure the border, they’ve taken matters into their own hands,” Business Insider reported in a lengthy examination of the border issue. “Throughout Texas, as well as the other border states, armed civilians have formed volunteer groups to patrol the borderlands and either detain or report suspected illegal border-crossers to Border Patrol.”
The story also noted that there are places where it is almost impossible to build a wall and others where a wall might not be the best means of security or pose large environmental costs.
Democrats opposing Trump are right about the wall. It’s hugely costly and in many places unnecessary. It is in those places that there are humanitarian costs, but they are not directly associated with a wall.
Good parts of the borderlands in the Southwest are already deadly dangerous to cross without a wall.
A humanitarian organization in Arizona told the Insider it has seen “a major decline in the number of people crossing the border….It’s now far more common for the nonprofit to find human remains than to find living migrants.”
Illegal immigrants appeared to have learned that it is simply too risky to try crossing water-less wasteland where summer high temperatures average 100 degrees. The Business Insider story is a pretty balanced look at the issue.
Business Insider is a so-far-successful, international news platform funded by advertising; a research service, Business Insider Intelligence; and subscriptions. The company offers a “Business Insider PRIME” feature that offers “access to our exclusive PRIME stories for subscribers only” and makes people “eligible for our special PRIME newsletter.”
“We expanded our global editorial team to 330 journalists,” editorial director Henry Blodget reported last year. “A decade into our existence, we serve a global monthly audience of more than 400 million people, nearly halfway to our long-term goal of 1 billion. Our stories generate more than 5 billion views a month.”
The Insider staff is small for an international news organization. CNN claims “the support of 4,000 journalists based around the globe.”
The Insider might be a model for the future. Just because competition for revenue makes it difficult to support expensive operations, doesn’t mean it’s impossible to support any operation.
Hopfinger still believes AlaskaDispatch.com could have reached profitability if Rogoff had stayed the course and avoided the temptation to inflate website costs with bills for her various and sometimes expensive Arctic adventures.
Dispatch was a low-budget operation run out of an airplane hangar at Anchorage’s Merrill Field, and even then overhead could have been reduced further.
For a news organization living in the cloud, there’s little need for an office at all. One could theoretically bring together a group of work-from-home collaborators and stitch together a news collective needing only enough revenue to cover their salaries plus those of a couple of ad sales people and a webmaster.
The cost of overhead for such an organization would be minimal. The only question is whether enough of a demand for the journalism of any earlier time still exists. It is possible the market no longer wants a fact-based reporting.
In the post-truth world of today, there is some reason to believe that outside of science and technical news (and sometimes even inside of them) what most people want from news is reinforcement of what they want to believe.
And there seem to be any number of pseudo journalists – fake news purveyors or not quite – willing to provide that. There might even be a few among the “reporters” reporting such news who actually believe facts are what they wish to believe.
CORRECTION: An early version of this story slightly overstated the percentage decline in daily newspaper journalists since 1990.