The rust blatt

At Business Week, Steve Baker adds to this post on media deflation with good observations on the parallels with other aging industries. I hope Steve won’t mind my quoting at length:

…Two decades ago, the big steel companies faced a challenge from upstart minimills. Big Steel had high costs, age-old traditions, and they made their metal in blast furnaces that were so expensive that none have been built in this country since the ’70s. The minimills, by contrast, melted scrap. Big Steel, much like big media, argued that they produced higher quality. What’s more, while they created steel, the minimills only recycled it. The minimills couldn’t exist without them. This is much the same gripe that you hear in mainstream media: Bloggers feed off our reporting.

That thinking was static. It assumed that minimills couldn’t improve their product, or come up with other ways to get their steel. Worse, the arguments were abstact and had little to do with the only force that truely mattered: the marketplace. Buyers, after all, could care less that the minimills were parasites. If they could deliver the right quality at low prices, they won. And win they did. Nucor is now the second biggest steel company in the country, and since these arguments raged in the ’80s, Big Steel has gone through a painful shrinkage and restructuring.

How does this apply to media? We’re facing new, low-cost competition. We can argue about values and quality and tradition all we want. And they’re important. But the future of our industry hinges on adapting our business model to this new world, and creating products that can support themselves (and us).

Well said, I’ll be saying more on this shortly; worked on a (rambling) post about this on the flight last night.

  • http://robertdfeinman.com/society Robert Feinman

    The problem with people-based media outlets (like blogs) is the issue of resources.

    The NY Times can put a reporter to work on a story and invest several months, if necessary, to do the leg work. The blogosphere and similar outlets generally don’t have any investigative resources. So most of what is written feeds off information gathered elsewhere.

    Using the steel mill analogy is good, but, so far, we just have mini-mills recycling used information. We may get to the stage where a reporter or free-lancer can support themselves on an online site. At that point posting online will just be a variant of the print newsletter such as the one by I.F. Stone.

  • http://www.topix.net Chris Tolles

    Pretty much the textbook Innovator’s Dilemma. Your industry is not killed by something better, it’s killed by something worse in almost every way — except it does one or two things better and is a whole lot cheaper.

    In Computer science, there was a pretty well known explication of a similar meme (Richard Gabriel by way of the inimical Jamie Zawinski), with regard to how simple and easy-to-implement beats the “right” way to build things. Build what gets used (bought) instead of what is desired.

    http://www.jwz.org/doc/worse-is-better.html

    Worse is Better.

  • http://spap-oop.blogspot.com Tish G

    Hmmm…some paralell with a story in the NYTimes this a.m. about Focus films, the art-house unit of Universal, taking out ads on Wonkette for their artsy fartsy Ralph Finnes film “The Constant Gardner”. (http://www.nytimes.com/2005/08/22/technology/22blog.html)

    Focus is trying to reach the artsy-fartsy crowd they believe reads Wonkette. It’s probably a heck of alot cheaper for Focus to run ads on blogs than it is for them to run print ads in alternative press papers.

    Blogs as mini-mills for msm. Real bleeding obvious with Gawker Media.

    One thing Focus hasn’t figured out though is that the Finnes film doesn’t have the Hottie Factor going for it. People read Denton’s conglomoblog as much for the Hottie Factor as anything else. So, in the sector of the blogosphere they’re courting, unless they stick in a blond with fake boobs, Focus’ ad will fall on deaf ears anyway.

  • D

    Yes, the New York Times can afford to “put a reporter to work on a story and invest several months, if necessary, to do the leg work.” But the reporter spends much of that time coming up to speed on an unfamiliar subject — in essence becoming an expert. Compare that a blogger who’s already an expert and can produce a short, authoritative report on, say, fonts and typefaces. Or one who hears a CNN exec or Mississippi senator put his foot in his mouth at a private event — and mentions it online. Both instances are news, not just commentary.

    And I question the value of some months-long newspaper assignments. They often run in eight-part series with the word “crisis” in the title: “Crisis in Education” or “Crisis in Drinking Water.” Dave Barry has called them megaturds. Editors and reporters on these grand projects are often writing for Pulitzer judges, not readers. How many series, of the many produced, have you found compelling enough to follow in your local paper?

  • http://www.themarketinggene.blogspot.com Stan DeVaughn

    With relatively few exceptions, at least so far, the blogosphere is made up of millions of people who remain about three inches high, to paraphrase an observation I read on Seth Godin’s blog. The point is that we can’t consider every blogger a journalist anymore than we can think of everyone who owns a wrench as a plumber.

  • http://blogspotting.net steve baker

    That’s true. But a number of those people with wrenches can fix a sink or a toilet. And you should keep in mind that a number of people from the journalism world–wrench-equipped plumbers–could be migrating to the blogside.