Live-Blogging Yet Another Future of Newspapers Panel
Posted by chanders on March 10, 2009
The context: Columbia University hosted a panel on the Future of Newspapers, this time starring a cast of ex-WSJ alumni: James B. Stewart at the J-School, Norman Pearlstine, and Steven Swartz of “Hearst is going to start charging for content” fame.
Afterward, big take-aways: the panel seemed convinced a) charging consumers for some news content was inevitable and b) that didn’t mean that everyone would be charged. Rather the dominant idea seemed to be that you have a portfolio product where you provided low-level content for free to a mass audience and specialized content to a discerning, paying public.
I think this may be true insofar as what is coming down the pike. I also wonder what we’d happen if we thought about the viability of the “let’s charge for high-end news” from a normative / public good standpoint rather than a business model standpoint. Just for a sec.
OK, back to the blogging:
This one a j-school alumni event. The speakers:
James B. Stewart, Bloomberg Prof. of Business Journalism at the J-School, author and WSJ reporter.
Norman Pearlstine, Chief Content Officer at Bloomberg LP
7:03- Thought. These are all business reporters, arguably the most monetizable media / news content. “Wall St. Journal reunion?”
7:05- References Time Top 10 Newspapers that are going to die list. Doesn’t mention Philly DN.
JS: how did the newspaper industry get to this point? What was the economic model that was so threatened by the rise of the internet?
NP: “Golden era” was actually a brief era. Came on the back of TV and PM newspapers. Monopoly was unsustainable, and was a historical aberration. Makes the argument: because the margins were thin, the journalism was thin as well in the pre-monop era.
SS: Classified ads. were a huge windfall, and it were not inherent to what a newspaper does, which is writing stories and putting ad. next to those stories. Its own section and was once pure profit. Can partnerships with Yahoo, along with newspapers’ already existing big sales force, ie, selling the digital product of others, hold out the potential to keep some revenue that was lost after classified ads left? “We wont be able to dominate that business … but it is hopeful for a business model.”
NP: Advertisers paid $150,000 – $200,000 for a full page ad with the WSJ, back in the day.
JS: “From a reporter’s perspective it was nice to be a part of a monopoly.” (Laughter)
NP: Maybe its not as bad as we think. Back in the late 1990’s, most of the conversation was about Lycos, Alta-Vista. “It’s still kind of early to figure out what the right model for journalism is …. you have a mismatch for a global demand for a kind of story like the Washington Post would do and advertisers willingness to pay for that story.”
JS: Asks NP — why didn’t YOU buy newspapers when YOU were in the private equity market, because some people did. NP: All the models that investment banks would come in with had models which suggested that all you had to do was grow 2% a year.
JS: What is the problem with newspapers that are still making $. Why are they in trouble? SS: Revenue is falling so much faster than people can cut expense, makes projecting earnings impossible, and therefore, impossible to sell and / or invest in. “Newspapers are pulling in some absolutely abysmal numbers.”
SS jokes that he isn’t asking government for a bailout, but he is looking to the government for some regulatory reform (this gives more weight to that recent terrible Carr column where he was begging for newspapers to be allowed gvmt.granted monopolies through reg. reform
JS: How’s the journalism? NP: A lot of bad journalism at big margin papers. It was basically uneven. Gives shot out to the Nation and to IF Stone. Quality of journalism is not always related to a big budget, but it can become related over time. SS: There was a lot of fat on those big papers which is now going away. Young people coming “from journalism schools like yours” are doing good reporting and are also more tech. savvy.
JS:What would a reader have to pay in order to get what they’ve always had. Physical paper with high-level journalism?
NP: Circulation has never paid for newspaper revenues in recent years anyway. SS: You have to go back to the Hearst days to find a time when circ. paid for journalism. Imagine if what you paid for a cup of coffee in starbucks paid half the salary of the worker who made it for you and nothing else. The thing is– you can change that and we will change that– because we are asking readers to pay now [emphatic].
JS: (continued discussion about making readers pay). NP seems a little more skeptical of this option than SS, which makes sense, since Hearst IS asking newspapers to pay. NP: Newspapers like the LA Times looked more like a West Coast version of the NYTimes rather than a newspaper that fit the demographics or psychographics of their region. “If you are going to start from scratch a paper in that region will look a lot more like USA Today than the New York Times.”
JS: In monopoly days, newspaper writers wrote for themselves. SS: Tosses around “hyperlocal community coverage” and says that most newspapers are getting better in “knowing what their readers want.”
SS:”Newspaper to our industry is what the land line is to the phone company … readers have to pay more … and the market will tell us when we can no longer afford to make 7 day home delivery.” I want to keep it that way for a long while. Devices hold out the promise .. Kindle holds out the promise save the news product,” and mentions the iPhone NYTimes application as holding out the potential for the news product.” NP: Says he subscribes to the NYTimes “electronic edition” because he likes to know what is on page one in the upper right hand corner, but admits that this is “sort of sad.”
7:39 [discussion of going less than 7 days a week prining amd / or delivery]
SS: Look at our free websites as a broad mass mass-market product with something that appeals to everyone. But we are headed into an entirely digital age, but it doesn’t make sense to give up on our core audience yet.
NP: We have to go beyond simply translating the print product into digital form. We need to go way beyond the newspapers and focus on what customers want rather than what newspapers have. SS: Newspapers that are simply repurposed online hurt both the paper and the digital product. There is no Web 2.0 stuff in the metropolitan newspapers. There should be a mass market website that serves the community. “Breaking news, every editor has a blog, great local community content, celebrities have a blog, databases, news of the weird, photo galleries.”
[me: once again we are back to the mass-market portal. they have been trying this since the mid-1990’s, why do they keep trying.]
NP: Why will people pay for ringtones and not news online.
[me: because ringtones are not a fungible public good. news is]
JS: Why will advertisers only pay for a small fraction for an online ad what they would pay for a print ad, if it will reach more people in the same demographics. SS: They will, depending on what the ad. is. The problem (which I think will be solved via technology) is that advertisers dont know who is reading the ad. Second reason, there is so much content. Third reason: you can miss and forget an online ad which you dont do in a newspaper. Experiments in geo-targeting, behavioral targeting, and other ad targeting may solve the problem, “though they do raise some privacy issues we need to figure out.” NP: The real reason is the power of search. “Something new, something different.” How many uniques that websites tout came in through the site, and if they come in through side doors, advertisers aren’t really interested.
[more discussion of what search engines do to the business model]
JS: Thinks advertising will get more discerning; there’s a lot of stuff online that is just inventory, though he admits he may be rosy. SS: Thinks that Facebook and Yahoo surfers are bad targets for advertising, newspapers may be do better at commanding ads. once advertisers get more discerning.
JS: Bloomberg? Why are they successful. NP: Subscription business based on a small number of people who pay a lot of money for content which we use to fund the news staff. We are increasing our news staff 5% this year. Reuters is expanding, Thompson. JS: Is this an exception, business news? NP: Bloomberg terminal costs $20,000 a year. Thinks that there are other subscription models that might possibly work. The problem is, we are still early in trying to figure this out, but the recession doesn’t give us enough time.
NP: Need to monetize long-form journalism like the 4-part Washington Post series on IED’s. Thinks that 30,000 – 40,000 people around the world will pay a couple bucks for a series like this, its as good as every book written on the subject.
SS: More currency in a subscription model (even for the day) rather than a micro-targeting model, but we need more research.
[me: this entire conversation basically revolves around the question: how can we get readers to start paying for the news they get? Not many alternatives offered. ]
There are a lot of questions from people here about the plight of the journalist– layoffs, esp. people being asked to do more for less.
Me: Why is your basic discussion one of “how can we get readers to pay.”
SS: Readers paying is not the only part of this model. News organizations need to offer a free mass market model that is the best free website for that news. organizations region. But they also need to offer a top-tier model for that very small percentage of the audience that will be willing to pay for a story like the WaPo IED story. So, you can’t just ask readers to pay, and you can’t convince most readers to pay but you can convince some. Need a portfolio product, which is something a lot of businesses have.
NP: It’s not as complicated as you make it sound; people had network TV for years and now many, many of them pay for HBO.