As part of the Federal Trade Commission’s ongoing hearings into the future of journalism, Google’s chief economist, Hal Varian, gave a presentation on newspapers and their financial problems that is well worth taking some time to read (or view). The slide deck is embedded below, and Martin Langeveld has a great overview at the Nieman Journalism Lab that also includes a transcript of Varian’s presentation. The Google (s goog) economist (who also wrote a blog post) does a pretty thorough job of explaining the untenable position that newspapers currently find themselves in, and how it isn’t the Internet’s fault (in other words, it isn’t Google’s fault).
The biggest problem, Varian says, is that the news part of what newspapers do — the hard reporting and crime and investigative stuff that everyone thinks of when they say the word “journalism” — has traditionally been subsidized by all the rest of what newspapers do, such as the automotive section, the travel section, the lifestyle features and so on (which almost no one thinks of when they say the word “journalism”). Those other parts of the paper, unfortunately, are being targeted by subject-specific web sites and services, leaving the news part of the operation unprotected. As he put it:
Traditionally, the ad revenue from these special sections has been used to cross-subsidize the core news production. Nowadays internet users go directly to websites like Edmunds, Orbitz, Epicurious, and Amazon to look for products and services in specialized areas. Not surprisingly, advertisers follow those eyeballs, which makes the traditional cross-subsidization model that newspapers have used far more difficult.
Although it’s admittedly a bit presumptuous to expect Varian to come up with solutions to this problem, he’s a little light on the solutions front, mentioning Google’s “FastFlip” experiment as one possible answer, as well as Living Stories and a couple of other Google projects. But one part of his presentation really hit home with me, and that was when he talked about the amount of time people spend with the news online. On average, he said, they spend about 70 seconds a day. Varian says part of the reason for that is people reading online at work, where they have less time to spend with the news.
That could well be part of the problem, but I think Varian puts his finger on something important towards the end of his presentation, when he says that newspapers “need more engagement.” One of the reasons why the news in general fails to hold people’s attention for very long, and why newspapers have fairly pathetic “time spent” statistics compared to lots of other web sites, is that it does little or nothing to engage the reader. The delivery of most news stories is a bare-bones “here are the facts” approach, with little or no interactivity or room for external input. Why would anyone stick around?
Even when there are tools that are designed for interactivity, such as reader comments on news stories, they are typically ignored by the majority of newspaper writers (with the exception of some bloggers) and therefore become a kind of interactivity ghetto, a haven only for the disturbed and/or the disgruntled attention-seeker. All this despite the fact that research shows readers spend more time with news stories that have comments, and also return to those pages more often.
As Varian notes in his presentation, newspapers also spend comparatively little time looking at what brings people to their pages, what they are searching for and reading and recommending and commenting upon, all of which provides incredibly detailed and useful audience information. It’s like a retailer not paying attention to what his or her customers are buying, or how much they pay, or what they say about a product – but instead, just putting on the shelves whatever he or she wants to sell.
Can newspapers change these aspects of the culture and take advantage of the web? If they can’t, then not even Google will be able to help them.