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Venture investor Marc Andreessen of Andreessen Horowitz doesn’t have many media investments, apart from small stakes in sites like Pando Daily, Talking Points Memo and RapGenius — but that hasn’t stopped him from holding forth on Twitter about his views on the industry, a process that includes an often passionate back-and-forth with critics of his views. In the latest instalment of this manifesto, Andreessen looked at what he believes is holding the existing media industry back.
In the first part of the series, the former Netscape Communications co-founder talked about why he is fundamentally optimistic about the future of journalism (although perhaps not the future of traditional media entities). In the second part he talked about ways that new media entities can make money online, and in the third he gave some examples of companies that he thinks are doing it well — including VICE Media, The Atlantic and Wirecutter.
Bloated cost structure
On Tuesday, Andreessen listed off some of the reasons why he thinks most traditional media companies have not been able to make the transition from print to digital, or at least not as smoothly as they might have. First on the list: “Bloated cost structure left over from monopoly/oligopoly days. Nobody promised shiny HQ tower, big expense accounts, lots of secretaries!”
Judge’s ruling: This one might seem a little unfair, since hardly anyone has a shiny headquarters (most have sold them and moved to much less impressive digs) or lots of secretaries. But the part about a bloated cost structure is arguably still true, even after waves of layoffs — and a big part of that cost structure is things like pensions, which Andreessen mentions in his next post:
Staying married to objectivity
Next, Andreessen mentions the principle of objectivity, which he says is “still relevant for some, but broad journalism opportunity includes many variations of subjectivity.” In the days before World War II, Andreessen argues, subjectivity was the dominant model for newspapers — as he describes it, “lots of points of view battling it out in marketplace of ideas.” Objectivity as a guiding principle for all media, he argues, was “an artifact of new monopoly/oligopoly structures; necessary to ward off antitrust; embraced by reporters.”
The VC added in follow-up tweets that “many stories don’t have two sides; describing with point of view can even be better” — a comment that echoes journalism professor Jay Rosen’s repeated criticism of false balance, or what he calls The View From Nowhere. David Weinberger of Harvard’s Berkman Center for Internet and Society has argued that “transparency is the new objectivity.”
Judge’s ruling: Andreessen is right when he says that objectivity, often held up as an inviolable tenet of journalism, is a relatively recent invention. Early newspapers were incredibly lop-sided in their political and social viewpoints, since many of them were owned by rich proprietors who had an agenda they wanted to promote. The risk, of course, is that not everyone will read every perspective, which could leave some with a distorted picture.
The Chinese wall and too much defense
Next, Andreessen mentions the “Chinese wall” that many media entities maintain between the business side and the editorial side. This approach is flawed, he says: “No other non-monopoly industry lets product creators off the hook on how the business works.” Many businesses, Andreessen argues, manage to balance incentives and conflicts and can still “hold the line on quality.”
The venture capitalist then accuses media outlets of spending most of their time and effort on “playing defense and protecting the old” as opposed to a strong offense or inventing the future. In the long run, he says, this approach leads to almost certain doom. Even newspapers that are now making a go of things in digital “would be much better off today if [they] had shifted resources/focus harder/sooner,” Andreessen says.
Judge’s ruling: The division between business and editorial did serve a purpose in the old days of newspapers, in order to prevent the desires of advertisers infecting the purity of the journalism. But Andreessen is right that Chinese walls are expensive. As for his point about newspapers playing too much defense and not enough offense, he is 100 percent correct on that one, as Digital First Media CEO John Paton would no doubt agree.
Too much competition?
His final point is that the industry in North America at least suffers from an excess of competition, in the sense that too many general news organizations — from newspapers to TV networks — are chasing the same market. More than 15 full-scale national news entities in the U.S., he says, along with international players, “consolidation [is] required.”
Judge’s ruling: Andreessen has a point that there are a lot of national and international news entities chasing the same group of readers or viewers — and there are a lot of new online startups entering the field as well. But would it be any better if those groups were consolidated so that one or two owners controlled TV networks and newspapers and radio stations, and their online equivalents? This is one area where I’m not convinced. What’s wrong with competition?
In his last point, which requires no judging, Andreessen notes that these are all “business challenges/opportunities that can be rethought, addressed, fixed” if the industry wants to and puts its collective mind to it. And he closes with a quote from legendary baseball manager Tommy Lasorda: “Nobody said this f***ing job would be all that f***ing easy.” But even though it is hard, the Netscape founder said, “it can be done, and it is worth doing.” Amen to that, sir.