Letting Time Solve the Online News Dilemma

The Guardian's John Naughton isn't looking to micro-transactions or licensing fees from search services to solve the online news business model problems that have come to a head recently. Instead, he's simply waiting for capitalism to do its job in killing off the providers who can't cut it. Once that happens, he says, the remaining organizations will be in a far better position to see what web-goers will pay for online news, and he doesn't think it will inhibit the growth of an increasingly information-rich news ecosystem. "Things have got so bad that Rupert Murdoch has tasked a team with finding a way of charging for News Corp content. This is the 'make the bastards pay' school of thought. Another group of fantasists speculate about ways of extorting money from Google, which they portray as a parasitic feeder on their hallowed produce. ... But what will journalism be like in the perfectly competitive online world? One clue is provided by the novelist William Gibson's celebrated maxim that 'the future is already here; it's just not evenly distributed.' In a recent lecture, the writer Steven Johnson took Gibson's insight to heart and argued that if we want to know what the networked journalism of the future might be like, we should look now at how the reporting of technology has evolved over the past few decades."

Comments

Capitalism maximizes for profit

[AlexBirch]

Capitalism just maximizes for profit not for equity, not fairness. NPR versus Fox News is a great example of this. Fox News will be going strong for a long, long time; regardless of their bias. NPR could be hurt if the government cut off all their funds.

Saying that capitalism will save the day overly simplistic.

Will People Pay?

[Mikkeles]

Will people pay for well-reasoned, researched, and written commentary and opinion columns?

I would, but not the price of a year's subscription for print. I would pay that, however, if I had unfettered access to, e.g., all (or most) Canadian newspapers online; including the small, local papers. Similarly for a major English-language paper from each country.

This simulates the blog experience - access to a multitude of differing viewpoints, but with financing to be able to do a good to excellent job.

Re:Will People Pay?

[Zocalo]

Absolutely they will. Anyone who has been in the UK recently can't help but have seen some coverage of the MP Expenses scandal which The Telegraph has been milking for a couple of weeks now. This is good old fashioned journalism at its best; a competent team of reporters going over a huge amount of data and expressing it clearly and succinctly in terms the public can understand. Sure, there's some sensationalism in there too, but the results speak for themselves; a respectable UK broadsheet seeing an increase in circulation of over 50,000 a day is phenomenal for a medium that is supposed to have been left in the dust by "iReporters" and the "Blogosphere". You can bet that there has been a similar uptick in what the paper is charging people wanting to advertise in the paper as well, and it's probably already a forgone conclusion which paper will be walking away with the big journalism awards in the UK this year.

John Naughton's approach is probably the correct one, but as we've seen from the examples set by the music and movie industries, the media business isn't exactly quick to adapt and has the funds to struggle on for a very long time. I'm all for seeing a few of Rupert Murdoch's red tops go to the wall, but unfortunately "Peter and Jordon to divorce" still sells far more papers than "MP claimed for moat on expenses" (yes, really). It's probably going to be a case of the few standing taking all, but unfortunately I suspect that some of those left standing are going to be those who have the funds to muddle and sue their way through the end.

Re:Will People Pay?

[whoever57]

... the MP Expenses scandal which The Telegraph has been milking for a couple of weeks now. This is good old fashioned journalism at its best; a competent team of reporters going over a huge amount of data and expressing it clearly and succinctly in terms the public can understand.

In the US, people are concerned about how to pay for "investigative journalism". The only problem with this is that it is largely dead already in the US. The same person who tried to convince the SEC that Bernie Madoff was running a Ponzi scheme took his information to major newspapers also. Did they follow up? Another example: there was an interview in NPR with a reporter who, two to three years ago had been investigating and writing about how bad things were going to happen to the financial system -- so investigative journalism is still alive in the US? Nope, she wrote for the UK's Financial Times.

But the big problem with US newspapers is that, as an industry, it is massively overstaffed. There are far too many newspapers, each with its own newsroom and, more importantly, its own overhead. We don't need so many newspapers. Competition amongst newspapers is not required because real competition from other news sources exists.

Re:Warning! This is a False Sense of Security!

[DarkOx]

Sometimes things going the way of the dodo is capitalism as well. How many buggy whip manufacturers are there today? A more than few I imagine, for various equine sport but not the numbers that once existed.

Drive-In movies are all about gone too because we just don't need them any more. People have so many other options for entertainment and so many other venues including their homes to watch the same movies in the drive-in theater is just not a marketable service any more. It may be the same way with the papers. The question is where will investigative reporting and other hard news content come from? I think we all understand there is a need for and a market for that content. What needs to be figured out is how to deliver it profitably.

I suspect print newspapers and even online news sites as they exist to day are not that mechanism, nor is network broadcast news. I just don't know how it gets done, If I did I would be doing it.

Re:Warning! This is a False Sense of Security!

[sycodon]

Newspapers go the way of the buffalo just like drive in theaters.

Don't confuse the delivery mechanism with the product. The product is "What is going on?". It is delivered now via Newspapers, T.V., Radio, and the Web.

While a great deal of it is generated by the infrastructure of workers created and maintained by the newspapers, there is plenty that is generated independent of them.

The analogy of Drive Ins is very accurate. It used to be they were one of only two options to watch movies. Even though the Drive In are now virtually extinct, people still watch movies. And their options for watching them have expanded greatly.

People will always want, no, need to know what is going on. Regardless of what happens to the newspaper industry, someone will be there to fill that need and they will be compensated one way or another.

Chicken and the Egg problem...

[RyanFenton]

The problem with funding news isn't itself news. The reason I watch and respect a news service is because they put resources into investigating the world and offering valuable insight. But I also aknowledge, that I can be occasionally pulled into cheap editorial content.

Guess which one's cheaper.

So, in the commercial news business, the industry has once again shifted drastically towards the cost-conscious editorial and rehashed-news dominance. Everyone's using the same sources, and the sources are dwindling. And because of that, the feeling that any given news provider has unique value is only contained in the unique voice they give themselves, but even that is becoming a formless soup.

The news providers provide less meaningful news, leading to less interest, leading to less money, leading to more editorial dominance, and so on... mostly because the global pool of money has shrunk so much to prevent many real sparks of bold investigative journalism from being worth the risk in the environment. Like with the chicken and the egg, even when we've learned that the egg is far older than any chicken, it doesn't get us more chicken.

That's why I've been turning to the BBC (and the CBC) more often. Put whatever hate you want on socialism, but it really does improve on capitalism when it comes to allowing media to do an effective job at funding news. They're certainly not perfect - but the signal to noise ratio is so much better, in terms of what remains after the bullshit filter, from my biased perspective. PBS/NPR are also nice in spots, but they really have lacked diversity, as administrations have waged ideological wars through appointments.

That's my fix for reliable news sources - make funding more independent from news content, and get more international perspective where possible.

Ryan Fenton

What a Narrow Minded Post

[eldavojohn]

Any reasonable person listening to NPR would recognize the built in ideological slant to NPR.

Well, call me unreasonable then because I recognize little if any slant. And I know you will say that's proof of my political leanings but I don't think it is. I listen to NPR because the rest of radio is complete and utter trash. I don't want to listen to a naked girl rub her boobs on the host on air. I'd rather listen to Wait, Wait, Don't Tell Me or Sound Money ... shows I can't see any liberal bias you speak of. You know in Minnesota, they have at least three different MPR stations that play music. Classical music and independent rock. Commercial free. You're also arguing against that when you argue against public radio.

One listener to NOR said it best in a letter read on the air: "Gays, Aids, and Abortion". You are guaranteed to hear at least one story on one of these subjects every freaking day.

I don't know what NOR is but I'll assume you meant NPR. I grew up listening to A Prairie Home Companion and don't recall any of those topics. I don't know what "Gays, Aids and Abortion" has to do with being liberal, they are all issues that should be addressed by anyone regardless of their political affiliation. They are current topics. Have you heard their coverage of the war in Iraq? I've found that to be very unbiased.

Throw in a story about how wonderful (insert liberal politician here) is and how evil (Insert conservative politician here) is and then add some snooty, witty, and amusing story about some obscure idiot and there you have an NPR broadcast.

You have never listened to NPR. Do you know that a lot of the affiliates switch over to BBC World News late at night? Do you find that to have a horribly liberal bias?

NPR should have their government funds cut off. Let George Soros buy it.

Do you know how much money you pay to NPR? Probably a few cents a month--if that. I don't think they would really care if they lost government funding, probably just push their pledge drive out another day. They get so little from the government and so much from listeners that would like to see any kind of news source free without ads, available everywhere in the country. Think about it, people hand money to them ... they don't have to charge like Murdoch wants to.

They may present more liberal topics than conservative topics but at least they don't use verbage that tries to tell me how to think about them (a la Fox News).

I would bet that if you took a citizen from another part of the world and made them listen to NPR they would see it as pretty damn neutral.

How the parent post got moderated insightful, I'll never know.

News is now entertainment.

[copponex]

The problem is that news needs to be critical information, and not just entertainment, in order for democracy to work. Even a truly free market requires critical analysis of products, because it only functions if consumers are making informed decisions.

Let's say we just let the chips fall where they may and cable news becomes the de facto standard for journalism. When you have a handful of corporations whose job is to sell advertising to another handful of corporations, the amount of self-censorship would skyrocket. Common sense tells you that outing your highest paid advertiser for having a sweatshop or poisoning a creek that's giving children cancer is a bad business move.

Imagine this scenario: two journalists approach their editor with a story. One is a fluff piece about a local sports star getting arrested for hiring a prostitute. The other is an investigation into alleged union busting at a major local employer, who also happens to be one of their biggest advertisers. In a purely capitalist model, which journalist gets the green light? Does the editor who cranks out huge profits for less money get the promotion?

A book was written about the subject, with a nice summary on Wikipedia:

According to the book, the pressure to create a stable, profitable business invariably distorts the kinds of news items reported, as well as the manner and emphasis in which they are reported. This occurs not as a result of conscious design but simply as a consequence of market selection: those businesses who happen to favor profits over news quality survive, while those that present a more accurate picture of the world tend to become marginalized.
Manufacturing Consent, by Herman and Chomsky

For a concrete example, check this out this article on the coverage of the genocide in East Timor.

Basically, if you let market forces totally control news media in any form, you will end up with entertainment that distributes what is popular but not what is true. It's the difference between the BBC and Fox News. Both are biased, but as far as the quality of news they provide, Fox isn't even in the same dimension.