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Summary:

Some of the larger traditional brands in journalism will probably wind up prospering in the new digital era, and some hyper-local ones will as well — but what happens to the players in the middle? Their future remains uncertain.

While in New York this week for a GigaOM event, I had coffee and lunch with a number of media-industry insiders and observers, including Jay Rosen and Clay Shirky – two people I think are among the smartest media analysts in the business. And one thing that kept coming up is what I have chosen to call the “barbell problem” for media, and specifically for newspapers: in other words, the feeling that while both ends of the journalism spectrum are probably going to be fine, the middle is getting squeezed to the point where its future is uncertain at best.

So the New York Times, for example, is going through the same kind of uncertainty and upheaval as the rest of the industry – having to lay off staff, cutting costs, selling assets. But while the paper’s paywall and other measures may not totally fill the gap caused by erosion of advertising revenue, the NYT has enough resources to not only survive but do well. Likewise, the Financial Times and the Wall Street Journal will probably survive and prosper, along with some other large brands.

Some prominent journalism brands will likely be fine

This is exactly why Shirky and his coauthors on the recent “Post-Industrial Journalism” report from Columbia specifically excluded any discussion of the Times from their analysis of the future of journalism. As Shirky described it, it’s like the average driver measuring themselves by looking at someone who races on the Formula One circuit. Practically speaking, there are very few meaningful lessons other newspapers can learn from the New York Times.

Tribune

That’s one end of the barbell. The other end is the ultra-small, hyper-local newspaper – the daily or even weekly broadsheet that serves a small town or region, where the disruptive forces of the Web haven’t made themselves felt as strongly and local shopping flyers are probably still a pretty good business. This is the kind of newspaper that billionaire Warren Buffett is buying up – the kind that still has a lock on a local market. Paywalls may work well here because of the lack of compelling alternatives.

And what’s in the middle? Everything else – medium-sized papers like the Miami Herald or the San Francisco Chronicle or the Boston Globe, as well as most of the larger metro papers like the Chicago Tribune and the Los Angeles Times and the Philadelphia Inquirer. What does their future look like?

Many of these papers have been trying to make paywalls work, but for most the results appear to be fairly lackluster at best – even the Boston Globe, which is far from the worst newspaper in a medium sized market, has attracted just 28,000 subscribers after more than a year. Its owner the New York Times has put it up for sale and may get less than $100 million for it, and that’s after removing the single most damaging part of the business from the equation – namely, the paper’s $200 million or so in pension obligations.

What happens to the news that doesn’t pay?

Those pension obligations are one of the biggest mill-stones around the neck of traditional media entities. And the bottom line is that even with some reader support, as Rosen and I discussed, these papers are going to have to shrink dramatically or come up with new forms of revenue, which is why the Washington Post is experimenting with what has come to be known as “sponsored content” (something we’ll be talking about more at paidContent Live on April 17)

reporter

In a recent post at Slate, writer Matt Yglesias responded to the somewhat fatalistic tone of coverage around the recent Pew report on the state of the media by arguing that as news consumers, we are better off now than we have ever been, thanks to social media and other forces. And it is easy to see how that is the case for certain topics and certain parts of the world – but as Dan Mitchell pointed out in a rebuttal to Yglesias, it isn’t the case for much local coverage of things like municipal affairs and public-policy topics.

So what happens to that kind of coverage as newspapers shrink and even die? If all the things that have subsidized that kind of journalism have been removed – the car ads and travel writing and so on – all these papers are left with is the kind of content that advertisers aren’t interested in and readers don’t want to pay for. What then? ProPublica and the Texas Tribune are interesting publicly supported models, but how scalable are they? Is every state or region going to have one?

Will some form of “citizen journalism” be able to fill this gap – whether it’s local bloggers or some kind of automated Twitter feed etc.? Perhaps. Will newspapers use outsourced services like Journatic or even robot journalists like Narrative Science? In all likelihood it will be a combination of all of these, and possibly other things we haven’t even thought of yet. At this point, the answers are a whole lot murkier than the questions.

Post and thumbnail image courtesy of Flickr user George Kelly and Jan-Arief Purwanto

  1. Mathew, I believe the automobile industry found a way to deal with large pension obligations that were a financial burden. Can newspapers do the same?

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    1. Good question, Rich — I wish I knew the answer.

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  2. I don’t think I’d call this good news for small town side of that barbell: “This is the kind of newspaper that billionaire Warren Buffett is buying up – the kind that still has a lock on a local market.”

    That suggests that one man, Warren Buffett, will acquire a “lock on” what constitutes news in those local markets. An email from him could determine what gets puffed or ignored.

    Combine that with the growing narrowness at the other end of the barbell–a few national newspapers rather than dozens of big city dailies–and our free press will become a press held captive by all too few people. In that situation, the fact that it’s economically viable becomes irrelevant.

    And yes, we’ve been through that before with television news. I remember as a teen being unhappy when I noticed that virtually all the national and international news on television came from three networks. They were not only were all located on one little island, Manhattan, two were so close together they shared the same zip code.

    But that’s no excuse. That narrowness of what constituted television news led us into a folly and a crime. A spin on news coverage in favor of our involvement in Vietnam led us into the war. Another spin led us into the crime of abandoning the Vietnamese.

    –Michael W. Perry, editor of The School of Journalism by Joseph Pulitzer

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    1. That’s a great point, Michael.

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  3. Mathew should try some reporting instead of just typing (while he hypes one of your conferences.)

    We have dozens, even hundreds, of mid-sized papers that are doing well with our meter. Instead of trying and re-trying different versions of his rant against people being asked to pay for content (and amending his views ever so grudgingly as the evidence of big papers and small papers succeeding hits him in the face), he could have asked us about these mid-sized papers. Or he could have asked the papers themselves.

    Steve Brill
    Co-CEO Press+

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    1. Thanks, Steve — maybe you could come to the conference and we could discuss it there! As for my “rants” as you call them, I admit I have been skeptical about whether paywalls will be the savior of the newspaper industry, and I don’t think anyone — including Press+ — has shown that they are. I think they serve a function, but many papers will still have to shrink and adapt, and that’s what this post was about. I wouldn’t claim to have all the answers, by any means. Thanks for the comment.

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      1. Matt:

        There you go again.

        1. You keep promoting your conference in your writing, which is not professional.

        2. And you say that you don’t “think….” Why not report instead of giving your opinion about a fact? The fact is that newspapers that are metering have not lost any ad revenue and have gained new reader revenue that is either modest or significant depending on the quality of their product and how well they sell it.

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  4. Mathew – the pension-obligation issue is bigger than news orgs and is yet another thing (health care, family leave) that differentiates the US from other industrialized nations.

    Our blind allegiance to an empty myth (the “free market”) plus our worship of greed (excessive monopoly rents as ROI) and our stubborn refusal to treat infrastructure goods like infrastructure (where the math shows that “competition” is a net cost to society) are, together, going to be our Achilles heel.

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  5. How can you say that media companies such as New Yor Times will survive when their legacy costs such as pension obligations look likely to sink them?

    “The New York Times Company’s total pension liabilities as of late last year totaled $1.987 billion.” from September 2012 NYTimes story.

    And as for Warren Buffett, he has been buying some small local papers but not their pension obligations.

    The brands will survive but not the owners. The industry is still being disrupted to an extraordinary degree, which this author doesn’t recognize at all.

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  6. Dane S. Claussen Monday, April 8, 2013

    The barbell analysis is correct, as I have been saying (and teaching my students) for many years. The three national newspapers will survive (probably, even though USA Today isn’t really worth reading), and the 1,300 US dailies in small to medium markets will survive because their local content isn’t available anywhere else (and their local audience is not easily obtained any other way, especially in markets with a daily newspaper but no local TV station–and there are a lot of them!). But the 85 or so metro dailies are toast: not high enough quality, not enough interest in their markets in having high quality, and too much competition for both advertising and eyeballs. Most of them were overrated anyway in between occasional award-winning investigative series.

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