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I'm not a business-minded woman. I got into journalism for the same reason a lot of people did -- because I love to write, and I wanted to get paid to do what I loved. I also believe the news matters in people's lives. So, I'm trying to make sense of where the new business models for news are coming from. This blog post is my effort to make sense of what I'm hearing.
I start with two assumptions about how we got in the mess we're in. First of all, newspaper circulation and broadcast news viewing started dropping long before online news became a factor in the calculations.
The Project for Excellence in Journalism's 2004 report said the absolute slide in newspaper readership began in 1990, but subscribers had really been dropping off since the 1940s. In recent months, that slide has become precipitous, even though online readership is strong for many news sites. An October, 2008 story on figures released by the Audit Bureau of Circulation found:
Newspaper circulation has fallen about 2 percent annually for years but
began to drop faster in the 2007 reports, and faster still in the
reports issued last spring, which showed declines of 3.6 percent on
weekdays and 4.6 percent on Sundays.
A February 26, 2009 study from the Pew Center for the People and the Press found that print readership is dropping faster than online circulation is growing.
As for broadcast, Dr. David Mindich of St. Michael's College reported in
his 2004 book, Tuned Out: Why Americans Under 40 Don't Follow the News,
that television news viewing has been dropping for the last 40 years.
Lower circulation and ratings means lower ad rates, and since ads pay for about 80 percent of a news operation, that's bad news. I get that.
Now it seems to me that part of the reason that traditional news organizations are finding it so hard to compete online is that the cost structure of creating and distributing online content is artificially low, and most news operations are saddled with legacy costs that make it difficult for them to compete. Here's what I mean: a newspaper pays for the creation, production and distribution of content. Newsprint costs alone have become precipitous, as Rosemary D'Amour noted last November:
In the US, the cost of newsprint rose to a twelve-year high, up 37%
from last October on the East Coast. Several "major paper producers"
are indicating that they've reached their peak in prices.
Then there's the cost of delivery trucks and newstand distribution.
Online news distribution cuts out the costs of paper and trucks. The cost of news delivery is the cost a server and ISP access.Once upon a time, when news organizations began making their content available on proprietary networks like Prodigy and the early AOL, they could share their content online without endangering their primary revenue stream. They could even bundle that content as part of a premium online revenue service.
But all of this was riding on a network infrastructure initially created by taxpayers and enhanced by telecommunications and cable companies.It was the result of what Jon Stone called "Pentagon socialism" in a 2006 article.
It's no accident the first bloggers were people who were getting paid to do something else, like write code, who shared news stories and other information that interested them. It wasn't really a matter of information wanting to be free -- it was more a matter of people using resources that had been paid for by others. As BlogHer of the Week, Stella Haven, poignantly notes, "Exactly who do you think gathers that news, vets it and delivers it to you online?"
Eventually, the proprietary networks gave way to the people devised publishing platforms that lowered the barriers to entry and a lot more people became publishers. New web-based publishing, like TPM Muckraker and yes, BlogHer emerged -- leaner operations, tailored to the web, without the resources of traditional newsrooms, but also without the costs of office buildings, retiree health plans, union contracts, and shareholders expecting 20 percent returns.
Perhaps news organizations should have been in the forefront of developing those new publishing platforms, as well as the technologies employed by today's all-platform journalists and multimedia bloggers, but they missed the boat.
Now publishers are trying to get their competitive edge back, with new schemes to get someone to pay for the cost of creating news content:
- In a conference call last week, Newsday's publisher said that the paper's corporate owner, Cablevision, was considering putting the
