Hard economic lessons for news

I’m working on a talk that I hope will become the canonical link to my essential message about the business rules and realities of news. I continue to be astonished at the economic naiveté I hear in discussions of the business of news. (Look at this comment thread and and this one.) Here is my answer, the basis of a talk — to be delivered in tweets, in the model of John Paton — and a lesson for my classes. Work in progress. Thoughts so far; please join in….

RULES FOR BUSINESS MODELS

* Tradition is not a business model. The past is no longer a reliable guide to future success.

* “Should” is not a business model. You can say that people “should” pay for your product but they will only if they find value in it.

* “I want to” is not a business model. My entrepreneurial students often start with what they want to do. I tell them, no one — except possibly their mothers — gives a damn what they *want* to do.

* Virtue is not a business model. Just because you do good does not mean you deserve to be paid for it.

* Business models are not made of entitlements and emotions. They are made of hard economics. Money has no heart.

* Begging is not a business model. It’s lazy to think that foundations and contributions can solve news’ problems. There isn’t enough money there. (Foundation friend to provide figures here.)

* There is no free lunch. Government money comes with strings.

* No one cares what you spent. Arguing that news costs a lot is irrelevant to the market.

* The only thing that matters to the market is value. What is your service worth to the public?

* Value is determined by need. What problem do you solve?

* Disruption is the law of the jungle and the internet. If someone can do what you do cheaper, better, faster, they will.

* Disrupt thyself. So find your weak underbelly before someone else discovers it. Or find someone else’s.

* The bottom line matters more than the top line. Plan for profitability over revenue, sustainability over size.

REALITY CHECKS FOR NEWSPAPERS

* Circulation will continue to decline. There can be no doubt.

* Cutting costs will reduce product quality and value, which will further reduce circulation, which will further reduce ad revenue. A vicious, unstoppable cycle.

* Low-cost competitors and abundance will continue to reduce the price of advertising.

* Local retail will continue to consolidate, further reducing ad revenue. Blame Amazon.

* Classified categories—real estate, auto, jobs, merchandise—will continue to become more self-sufficient. They will need market mediators less and less.

* There’s a cliff coming: the end of a critical-mass of circulation needed to maintain inserts. That will have a big impact on newspapers’ P&Ls and will take away a primary justification for still printing and distributing paper.

* Some readers are not worth saving. One newspaper killed its stock tables, saved $1 million, and lost 12 subs. That means it had been paying $83k/year to maintain those readers. In creating business plans, the net future value of readers should be calculated and maximized.

* Once fixed costs are sliced to the bone, they will rise again. Cutting alone does not a business strategy make.

* “The newspaper model is broken and can’t be fixed.” Says John Paton.

DIGITAL RULES

* Scaling local sales is the key challenge. Google will pick low-hanging fruit from the 6 million businesses that have claimed their Places pages. Facebook’s fruit will be businesses that use its free Deals. Each will use distant sales. Groupon and Patch will attack the challenge with the brute force of local sales staff.

* There will always be new competitors. For content, attention, advertising, and advertising sales.

* You no longer control the market. You are a member of an ecosystem. Play well with others.

* Abundance will drive down prices in digital even more than in print. That’s the lesson Google tries to teach media (and government).

* The question about pay walls is whether they are the *best* way to make the *most* money. It’s not a religious matter. It’s a practical question of whether circulation revenue will net more than equivalent advertising, whether one can afford to give up audience and growth, what the costs are to support pay.

OPPORTUNITIES

* Scaling local sales is the key opportunity. I think the answer will lie in productizing services for local merchants (across all these platforms — not just selling them space in a media site but also helping them with Google Place pages and Foursquare and Facebook deals and Twitter specials) and establishing new, independent, entrepreneurial sales forces. The key challenge then will be holding down the cost of sale and production.

* There is huge growth potential in increasing engagement. Facebook gets roughly 30 times the engagement of newspaper sites, Huffington Post’s engagement is also a multiple of newspapers’. If we are truly community services, then we must rethink our relationship with the public, becoming more a platform for our communities, and that will multiply engagement and, with it, audience, traffic, and data. We have not begun to extend and exploit the full potential of the value news organizations can have in relationships with their communities: more people, more value, more engagement equals more value to extract.

* There are still efficiences to be found in infrastructure. If the presses and the distribution and sales arms of papers are not in and of themselves profit centers, they should be jettisoned and their tasks outsourced. If other tasks — including editorial tasks — can be consolidated, they should be.

* Journalists should do only that which adds maximum value. That’s not telling the public what it already knows. It’s not exercising ego. It’s not production. It is reporting, vetting, curating, explaining, organizing, teaching…. Do what you do best and link to the rest.

* There is growth to be found in networks. The more members there are in the ecosystem, the more content there is to link to (without having to go to the cost of creating it), the more opportunities there are for free promotion (links in), the more opportunities there are in aggregated and joint sales. See our work on new business models for news in the local ecosystem at CUNY.

* There are efficiencies to be found in collaboration. Working with the community and with other members of the ecosystem enables a news organization to specialize and increase value and to do more with less.

* There are other revenue streams worth exploring. Local bloggers are making considerable shares of their revenue in events. Newspapers are going into the real estate business and are also selling merchandise.

* We have not begun to explore new definitions of news.

: Note: I rearranged a few of the rules and combined two into one for better organization.

: Was mit Medien translates these rules into German. And translated again.

  • Andy Freeman

    Unique gives you pricing power; customers won’t pay you more than someone else charges for the “same” thing from someone else. Value as perceived by customers is how much you can charge – it has nothing to do with costs.

    Good only comes in in so far as it is valued by customers and doesn’t help at all with unique.

    • http://bit.ly/gvL6o6 jayackroyd

      Yep.

      “Seek uniqueness”

  • http://www.escomunicacion.es Miguel Ángel Alonso

    Jeff, I totally agree with your points. Here in Spain there is a lot of naiveté and many journalists hope that when our country’s economic crisis is over, newspapers and traditional media will be again the big-buck businesses they were. I keep on telling them it’s impossible and media has to transform and adapt in what is going to be a painful process, but it seems no one has learnt from what happened to music industry and all the business models that are changing from atoms to bits. Thank you for sharing these thoughts!

  • http://bit.ly/gvL6o6 jayackroyd

    * Value is determined by need. What problem do you solve?

    I’d lose this one. The others are pithy, direct, unambiguous. This one, not so much.

    Just having the business model list handy when in a discussion would be great, since so many of the bad arguments can be answered with one of those phrases.

    • http://www.blackerbyassoc.com Phillip Blackerby

      I think it’s not so much “need” as “customer (reader) expectations.”

  • http://bit.ly/bdnwgC Dan Farfan

    “You can say that people “should” pay for your product but they will only if they find value in it.”

    How about, “… but they will only if they find more value in it than in your competition.”

    @DanFarfan

    • Mike Strand

      Nope. Jeff is right on this one. Your version suggests the ONLY decision consumers have is between you and the competition, but there’s actually another dimension to the decision. For example, there may be three stores in town that sell pogo sticks (and several online sellers as well). One likely provides better prices, another better quality, etc. But if I don’t see the value of a pogo stick at all, well, my choice is simply not to buy one — not which competitor to buy from.

  • http://bit.ly/bdnwgC Dan Farfan

    “Business models are not made of entitlements and emotions. They are made of hard economics.”

    I think “made of” is the wrong phrase, as long as “emotion” is on the table. The sales process will always contain emotion. The business model will always contain sales.

    Perhaps a phrase that focuses this point on “foundation” instead of contains.

    “Successful business models are founded on economics, not entitlements and emotions.”

    There’s a bit of poetry in that version. Although I doubt you want to make the necessary but less pleasing distinction in *every* statement between “business models” and “successful business models.” So, I suppose the better wording is,

    “Business models are founded on economics, not entitlements or emotions.”

    @DanFarfan

    • http://www.lot49.com Thomas Claburn

      Spectrum licensing is a government-granted entitlement and it seems to provide the foundation for a pretty lucrative business. One might also argue that fear justifies that foundation.

  • http://bit.ly/bdnwgC Dan Farfan

    “Government money comes with strings.”

    reword:
    “Even Government money comes with strings.”

    rewrite:
    “Take Government money and the rest of the camel will be in your tent, forever.” Ask a charter school if they are subject to more state regulations now or the year they opened.

  • http://westseattleblog.com Tracy @ WSB

    Disagree with @jayackroyd – “What problem do you solve?” is the absolute key to your existence that you MUST understand. We, for example, didn’t even set out to solve a problem/need, not even to create a business. A need existed and found us; we happened to be listening, and responded. That’s how our service continues to evolve – we keep listening, and responding. (You might need a line along those lines, too.) “Filling a need” also speaks to the fact that “I want to” is completely devoid of meaning.

  • http://bit.ly/bdnwgC Dan Farfan

    “RULES FOR BUSINESS MODELS”

    reword:
    The Truth about Business Models

    rewrite:
    The Truth about Models and Martyrs

    This will allow you to pit what the old school newspaper warhorses say, believe and do head to head against your business model wisdom.

    @DanFarfan

  • http://bit.ly/bdnwgC Dan Farfan

    Or maybe a slight rewrite… of my rewrite :-)

    “The Truth About Business Models and Newspaper Martyrs”

  • http://bit.ly/bdnwgC Dan Farfan

    “Some readers are not worth saving.”

    “Cutting costs will reduce product quality and value, which will further reduce circulation. A vicious, unstoppable cycle.”

    These two argue against each other. The stock tables was a $1m cost that was easy to cut once understood. For the second one to be valuable, it must have an adjective. “core costs”?

    The message is good, “Connect the dots between every cost and the revenue it contributes.”

    Perhaps you want to highlight the vulnerability of NOT having a deep, accurate understanding of that connection with something such as this:

    “Randomly cutting costs…”
    or even…
    “Haphazardly cutting costs…”

    @DanFarfan

  • http://www.verticalacuity.com Gregg Freishtat

    Amen. Very candid and insightful summary of the status of the “great dislocation” being caused by Digital Media.

    The only slight disagreement concerns the future – or lack thereof – of the “link economy”. The idea of sending folks off your site simply because you cannot afford to produce everything they might like to consume is a vestige of the past. There is no reason publishers cannot simply bring the content their visitors want into their sites rather then send visitors away to a place they can’t make any money. It just does not make sense in a media business. Rather, content to “route” to where it is in demand and infrastructure needs to exist to make sure content owners are paid when their content is consumed on another’s site. Its not that hard – we are building it and it works just fine….

    Gregg Freishtat
    CEO, Vertical Acuity

    • http://www.buzzmachine.com Jeff Jarvis

      The way I express this is that there are now two creations of value: the creation of the content and of the public for it. There needs to be a marketplace for the exchange of value in both. Doesn’t matter where it appears. Indeed, better to go to where the people are then to still — as media have — make them come to us.

    • Andy Freeman

      > There is no reason publishers cannot simply bring the content their visitors want into their sites rather then send visitors away to a place they can’t make any money.

      There’s often a very good reason – folks who own content often don’t want it moved to other sites.

      Yes, they might be willing if they’re paid.

  • http://byjoeybaker.com Joey Baker

    Fantastic!

    I’d add one to the top section (or maybe modify “should is not a business model”): Risking your life is not a business model. As difficult as your job is, as deserving as you might be, there is no inherent requirement for people to give you money.

  • http://bit.ly/bdnwgC Dan Farfan

    Use the phrase “model dead” to describe a business (or industry) crippled by a business model that’s no longer rational, plausible or even living.

    Then if you want to have a section that injects a bit of whimsy into the mix, invoke Jeff Foxworthy with a series of these:

    “If you’re paying an employee to type something into a computer that your customer can and will type for free, you might be model dead.”

    “If your employees spend their day answering questions your customers shouldn’t even have, you might be model dead.”

    “If copy/paste masquerades as value added, you might be model dead.”

    One by one, bridge the gap between the old-fashioned and the newfangled.

    … of course just like with the “redneck” schtick, the “might be” adds to delivery. :-))

    @DanFarfan

  • http://www.twitter.com/lindseywiebe Lindsey

    Out of curiosity, which paper was the stock tables killer?

    • http://www.buzzmachine.com Jeff Jarvis

      Star Ledger in NJ about a decade ago.

      • Jane

        Name of the newspaper is The Star-Ledger. As in Pulitzer Prize-winning paper in Newark, N.J. that you described on Twitter as “looking like a witch under water.”

  • Harry

    You say: Local retail will continue to consolidate, further reducing ad revenue. Blame Amazon.
    Yet retail began consolidating long before Amazon, as Federated and Macy’s bought up local department stores, not criticized by local newspaper owners who themselves planned to sell out to Gannett/Knight-Ridder. If consolidation was good for them, it was good for retail, too. By the time they realized their mistake (if they have), it was too late to save those dozens of full pages of competing store ads. They won’t be back, no matter what Amazon does.

    • http://www.buzzmachine.com Jeff Jarvis

      True. Now the consolidation is occurring up the supply chain, eh?

  • http://kapost.com Mike Lewis

    This is a great post. At Kapost, we recognize these realities and that’s why we’re making tools to allow publishers to continue to create content but much more efficiently. Want to have a bunch of freelancers instead of writers on staff? That’s what we enable.

    Great post Jeff, you really captured the issues.

    • Joe

      Ah, the great “let’s have our local government covered by Susie Homemaker in her spare time” model of newsgathering. I’ll pass thanks.

      • http://globalvue.wordpress.com Andria Krewson

        Lots of Suzies do a great job of covering events and retail news, the information that sources want people to know. And that’s the information traditional newspaper advertisers want to be around.

        So new and old media love to court Suzie, and she’ll have a business model connecting markets. Long term, some smart Suzies will cut out the middle-man newspaper or Examiner.com, using new tools like Kapost or something else.

        But covering local and other government? Covering big business and big nonprofits? Writing the stories that some people don’t want others to know? That remains a problem.

        For that information, a closed system that connects those who stand to make money off exclusive information seems the answer, and it’s happening in DC where money and exclusive access flow.

        That’s not so good for democracy, unless someone can figure out a way to share that information freely after first getting someone to pay for it. That’s the place where I hope creative solution seekers will focus.

    • Andy Freeman

      Considering that the local paper is usually in bed with some faction of the local govt, Susie isn’t necessarily worse.

      However, the real question is always who is going to pay and how much.

      What’s your plan for getting the revenue to pay for the reporting that you want?

  • Joe

    More sky is falling from Jarvis. Newspaper sites are all dominating their local markets right now. Most big papers have their newsroom costs from digital revenue alone. Papers have adapted, but Jarvis will never give them the credit, because it’s not in his vested interests to do so.

    • http://www.buzzmachine.com Jeff Jarvis

      Want to invest in a newspaper company? Feel free.

      • David

        Uh, I’ll challenge the “most big papers have their newsroom costs from digital revenue alone.” That is far from the case.

        Truth is, a lot of newspapers are using accounting tricks to make it appear their “digital” revenue is growing in leaps and bounds because their publishers are being pressed to show digital growth. But they use the same sales staffs to push it and they do thinks like bundle the ad sales as a trifecta of inserts, display ads and online ads. Of the three, online ads produce the smallest amount of revenue. But when the account for it, they can simply slide more of the revenue as coming from online than the other categories. It makes for a nice presentation for the owners, who also seek to believe the place is simply migrating its revenue from print to online.

        I am close to the publisher of a major, privately held U.S. newspaper. And when I asked what percentage of the paper’s revenue comes from digital vs. print sources, he replied, “I can make the books look however you want.”

        And when I asked him if the digital revenue could support the current journalistic operation, he said, “Not even close. Not here, not anywhere, not at current staffing levels.”

        Now maybe someone has real numbers out there to show that’s changing, but moving money around into different categories doesn’t really prove newspapers have adjusted to this new reality.

      • Joe

        David,
        And I’m close to some newspaper publishers as well. Want to know what one told me? They had about $3 million in digital costs last year and made $45 million in digital revenue. Does that match the mammoth numbers of yesteryear? No, but that’s what they’re making with a site getting appoximately 300,000 uniques and 1 million page views a day, on average, right now.

  • Joe

    I meant to say newsrooms now at most papers have their costs covered by digital revenue alone. It’s fact.

    • http://www.buzzmachine.com Jeff Jarvis

      Yes, Joe, I’ve said that long since. Happened at the LA Times a few years ago. Nothing I say argues with that. You just want to argue with me.

      But the cost of presses, trucks, buildings, and commodity news are not covered and won’t be. Big cuts have to be made. And entrepreneurs may be in a better position to build from the ground up.

      This isn’t an emotional argument, Joe. That’s the point. Hard realities.

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  • John Robinson

    I’d add “Hope is not a business plan.”

    “When the economy comes back, we hope ads will too.”
    “We hope readers will get annoyed by so much noise out there that they will look to us to make sense of it.”
    “We hope that readers will know that we’re trusted and accurate.”

    Hope, hope, hope. It’s not a strategy, a tactic or a business plan.

    Hey, I hope I win the lottery, but it isn’t going to happen, even if I buy a ticket.

    Love the post, by the way. Sent links to all the decision makers here, further endearing myself to them.

    • http://globalvue.wordpress.com Andria Krewson

      Like.

  • mutant_dog

    The physical paper needs to skew its content to the demographic cohorts who do not connect to the electronic Web. My wife and mother-in-law, to name two. In rule form, differentiate your content according to the medium.

    The (democracy-)killer question is, who will pay for investigative (non-partisan) reporting ? Any thoughts ?

  • http://www.jrmooneyham.com/ J.R. Mooneyham

    Jeff, I came to some similar conclusions in research I did about the future of newspapers some years back, and posted in:

    2050 milestone: Mid-sized and smaller local news organizations (such as newspaper publishers) have undergone a revolution in many regions of USAmerica and other developed nations
    http://www.jrmooneyham.com/s2081ref.html#section12.5

  • Nanker Phelge

    Jeff, is this advice similar to the advice you gave the Ann Arbor paper more than a year ago? Wouldn’t it make more sense to invest in a better product and charge for it?

    The WSJ, FT, and several other papers have had success doing this. I’ve yet to see a newspaper thrive with online ads alone. The Guardian, the most visible proponent of free online media, is in more trouble than almost any paper of its size – and that’s after letting Google sponsor some of its technology coverage in a really dubious deal.

  • http://twitter.com/derekbolden Derek

    Jeff I really love this post. However in my opinion what you see as naiveté I see as hardened denial. The newspaper business is doomed because of their failure to embrace the strange (to them) and unfamiliar (especially in their hiring practices). In addition, all of the recent cuts at many newspapers targeted the entirely wrong levels of employee. Instead of giving the axe the thick slow moving middle-management tiers, you had big cuts at the very top and the bottom levels. Effectively papers cut off their heads and tails but left the fat ass in place.

    These folks are so entrenched in their beliefs that many of them persist in viewing new forms of communication like social media are passing fancies. You can see it in the way they execute their “digital strategies”, often tepid and half-hearted ( with a “how can we slap an ad on that” twist). Whatever ground-breaking revolutionary ideas some underling might come up with is whittled down to extreme mediocrity by the time the ideas see the light of day. If they ever do.

    Unfortunately while your lessons are exactly what needs to be absorbed and processed thoroughly by many news institutions I know they will bounce off the middle management structures like pong balls. I hate to say this but the wrong people in many of these institutions lost (or are losing) their jobs and until the right ones do, nothing will change significantly. The fat ass has to go first!

    • Joe

      You have absolutely no idea what you’re talking about. Newspapers have adapted. Their sites all dominate their markets. They have the best of both worlds – print and digital revenues, and trusted brands. Cut and paste aggregators have only one and they’ll be easily drummed out of the market before long.

      • Derek

        Joe (or whatever your name really is), I know exactly what I am talking about. I compete with these sites one some level everyday (read that point, I said “I”, not me and my staff). Just because a newspaper’s site may be number one now means nothing going forward. You say trusted brands… Trusted by whom? Baby Boomers?

        I like the fact that you feel the way you do. It just reenforces my position. You’re obviously a member of the fat ass group I mentioned earlier. Let’s compare notes in about 10 years.

      • Joe

        Let’s do it, “Derek”, absolutely. I’ll take my well funded, established brand of trusted content and put it up against your one or two-person, cut-and-paste, no-original-reporting sweatshop any day of the week. Let’s indeed talk in 10 years Derek. I’ll come look you up at whatever Kinko’s or Starbucks you’re working at.

      • Joe

        Derek said: “Just because a newspaper’s site may be number one now means nothing going forward.”
        Wow, with that kind of sound business logic, you must have a real crackerjack site “Derek.” No, brand name and market position mean absolutely nothing. Keep up the work son.
        Woodward and Bernstein – look out for “Derek” and his falling dominoes of journalism revolution domination

      • http://twitter.com/derekbolden Derek

        “I’ll take my well funded, established brand of trusted content and put it up against your one or two-person, cut-and-paste, no-original-reporting sweatshop any day of the week.” LOL! I Love it!

        Joe there are people who can’t wait to take effete old-schoolers like you down. You’ll never be able to compete with us because your cost structure is going to remain too high. Market positions can change hands almost overnight, did you not learn anything from Craigslist? Oh and Joe there are a LOT of “trusted” brands that have gone down the tubes so if that’s what your banking on, your business is already dead (you just don’t know it yet).

        Sit back and settle down old man before you pop an artery. Have cup of chamomile tea.

      • Joe

        Quaking in my boots, Derek. I’m sure your one-man news operation will drum us all out of business.
        You’re just another dork sitting around staring at a computer screen. You’re not out in the real world, reporting real stories about real people. You’re not a real journalist. I am. And there is a flight to quality Derek. That’s something your nerd generation doesn’t know. Many, many more little startups like yours go away than the big boys.
        Does your dinky little operation get 2 million pageviews a day like my place does?
        Lol, didn’t think so.

      • http://twitter.com/derekbolden Derek

        Wow “Lol” ? Joe how modern of you! Hey buddy you keep reading that “”things the young people are saying” manual and you might just learn a few new tricks after all.

        By the way (I would type “BTW” but you might not have learned that one yet) Joe, (AKA Mr. Hypocrisy) what are you sitting in front of right now to type your little jabs. A Teletype? Here’s one you might know… Go sit on your hat!

      • Joe

        Hey Derek, are you still all haughty about the future of lazy aggregators like you being the example of economic success in the media world?
        Sorry bro, but looks like you’ll have to go out and get a real job after all instead of sitting around ripping off the work of real reporters.
        http://blogs.forbes.com/jeffbercovici/2011/04/25/google-traffic-to-demand-media-sites-down-40-percent/

      • http://twitter.com/derekbolden Derek

        Typical Troll style trying to sneak in the last word when you think no one is looking. Nowhere in any of my comments did I ever say a company like Demand Media was the future. What I did say is that the newspapers were going to have continued problems from the idiot lazy fat ass middle management tiers left in place after all the “restructuring”.

        Joe let me ask you something, how many papers with Twitter accounts actually follow-back some of their readership? How many communicate with them? Your answer (if you are being non troll-ish for a minute) would be a very few, if any. This is one of the ways Jeff means that papers should engage their readership! Talk to them! Listen to them! Interact WITH them! You just don’t get it and I am wasting my time with you.

        Go ahead and get the last word in Joe, but I’m telling you… You might be winning the present in your market but you’ve already lost the future. Good luck douchebag!

  • http://weeklypub.com/blog Tricia Fulks

    yes yes YES! love this post. it’s the VALUE that you’re preaching at the beginning that my professor, Steve Buttry, is preaching to us in our Seminar in Journalism class at American U right now. so important. working for a traditional news outlet a bit hesitant of change can be a bit frustrating sometimes when I’m learning from people like Buttry and reading great posts like this from you.

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  • michael brooke

    I am digging this post…and as a magazine publisher I am taking a good hard look at what I am doing and where I am going.
    Will share with all the folks I know who are on the same page!

  • Anonymous Coward

    You know what this post is missing? “Tweet this/Share this” buttons. (on the mobile version, at least)

    Thanks, Jeff. Lots to think about. I’d love to argue but I’ll need more time to find holes in this post. (a lot more time, if first impressions are any indication)

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  • nakedtruth

    This is a hilarious manifesto written by someone who’s never worked outside the insular world of newspapers being chewed over by many similar characters.

    All due respect, of course.

  • Dick Tofel

    Jeff, I think I agree with every point until you get to “Opportunities,” and then agree with some (and especially the last).
    But I’d add one more maxim:
    Not all journalism society needs to have published amounts to a business.

  • http://hightechforum.org Richard Bennett

    “Tradition is not a business model. The past is no longer a reliable guide to future success.”

    Discuss in the context of “all bits are equal” as a regulatory model for the Internet.

    Gotcha.

    • Nanker Phelge

      >>>“Tradition is not a business model. The past is no longer a reliable guide to future success.

      Agreed! In this time of immense change, it’s vitally important that the Internet continues to function exactly how it did in 1995.

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    • nakedtruth

      I’m sure this was a pithy remark before you put it through the i-google translator.

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  • http://www.blackerbyassoc.com Phillip Blackerby

    Newspapers is the only industry I know where, faced with declining sales, they reduce the quality of the product, which, as you mention, reduces value, causing further reduction in sales, in a downward spiral. Every other industry I know strives continuously to increase value, whether sales are going up or down. What makes newspapers believe they are different from every other industry?

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  • ken ellis

    Its more a list of bad smells and tips, doesn’t do a lot for me, some redundancy and lack of cohesion. The Opportunities section is the only one that has some meat. But that’s just my $0.02. I cringe at the thought of distilling issues down to a set of tweets, but I guess that’s the medium of the day, and I suppose a good way to market ideas.

  • Raquel C. Hogan

    Derek you’re an ass and a tool.

    If anybody’s trolling it’s JJ. Same old story: traditional media infrastructure is struggling to adapt to a rapidly changing world of new patterns of behavior driven by web technologies. Keep shoveling in the chipotle and feeding your fine brain with glee. Tweet that, old coot!

    • http://www.buzzmachine.com Jeff Jarvis

      Extra black beans on that, please.

    • Derek

      Ha! Good one Jeff!

    • Eric Gauvin

      You guys sound like beavis and butthead…

  • Nanker Phelge

    >>>Joe let me ask you something, how many papers with Twitter accounts actually follow-back some of their readership? How many communicate with them?

    Derek, this sounds groovy, but how would it bring in revenue? If you look at the popularity of newspapers online, it’s hard to argue that readers are dissatisfied with the product. The problem is that this readership no longer brings in revenue.

    No paper has used technology to involve readers more than the Guardian, which is more popular than ever. It’s losing so much money it may no longer be a viable business. The Financial Times, which does not follow readers tweets, is doing far better.

    Jeff, how are these ideas different from those you shared with the Ann Arbor paper – which has had significant layoffs since then?

  • http://www.nowthedetails.blogspot.com Jeffrey Dvorkin

    This is excellent Jeff and to me it buttresses the idea that journalism is, essentially, about creating community/communities. Journalistic vehicles are only the creative carriers to those places. A friend at the U of Oregon calls it
    “notional public radio.” It allows MSM to be the sense makers while the blogosphere is the sharp end of the lance. At the other end is the investigative journos. That is the triad of functionality that is emerging and my students are
    asking themselves at where will they function best.

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  • http://endotoxicshock.tumblr.com Jon

    This Article = Bingo

  • http://ShaverAssociates.net Robert Shaver

    Hay Jeff,

    I sent a link to this article to TechDirt and they published a short article about it. Mike Masnick said, “There’s a lot more at the link, much of which I agree with (a few I think are slightly misleading or wrong, but those are outweighed by the ones I do think are dead on).”

    So far there’s 17 comments.

    Peace,

    Rob:-]

  • http://ShaverAssociates.net Robert Shaver
  • http://notajarvisfan.com Diddy Alliddy

    The fact that you still feel you have to deliver a talk like this make the fact that you’re preparing it a farce unto itself. Anyone who still doesn’t see any of the above as obvious as the air we breathe is long past saving or convincing, and economically speaking, deserves their fate by now. Just shut up and let them die (economically and evolutionarily speaking). Or better yet just shut up. I mean seriously: How much are you going to charge for giving this talk? Anyone who would pay you to deliver it is already too far gone, Daddio.

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  • http://rowboats-sd-ca.com/ Andrew D. Todd

    I think you take a much too narrow definition of local retail. You seem to confuse retail with selling manufactured objects. Retail includes services. There are other possibilities, but let us focus on one area– restaurants. There are no Fortune 500 companies in the restaurant trade which have affirmative reputations for quality or excellence of product, in the sense that Toyota, or Mercedes, or IBM or Apple have affirmative reputations. The stereotypical big company is McDonald’s (Fortune rank #108). About the most you can say of McDonald’s food is that it is cheap, and that it is not disgusting (*), and and some people would differ about the latter point. The restaurant trade is overwhelmingly the domain of the small man, who can go and taste the food for himself. In round numbers, McDonald’s, and its major competitors (Burger King, Wendy’s, Kentucky Fried Chicken, etc.) account for only about ten per cent of the restaurant market. The largest burger chain with any kind of recognized character is probably Hardee’s, with revenue of only about four hundred million, a tenth of a percent of the market, and a thirtieth of McDonald’s. Of course, we are in an economic downturn at the moment, and a lot of people are economizing, but when the economy recovers, they will tend to spend money on restaurants. Figure out how to sell advertising to an independent restaurant, and you will have a reasonably healthy newspaper.

    (*) Some of the most disgusting food I have ever eaten was cooked by people who were going through the motions of serving food in order to get liquor licenses on more advantageous terms. Such restaurants proved, on better knowledge, not only to be de-facto taverns, but to be the kinds of taverns well known to the police. If one is in a strange town, one can hardly have greater local knowledge than the local government official who gave the restaurateur a permit in the first place.

    I think there will also be a continuing market for job advertising, at the top end of the market. If you are a hospital, and you want to hire a neurosurgeon, let us say, you post an advertisement in the local paper, apart from anything else, as a form of cheap insurance against being accused of discrimination. The essence of a newspaper advertisement for that kind of job is: “speak now, or forever hold your peace.” The same principle applies for legal notices. The stakes are potentially huge. Even if one wins the eventual lawsuit, mud is likely to stick. There is a lot of room to raise the price of this kind of advertisement before the newspaper gets priced out of the market. The advertiser wants to prove to the world that he was not acting by stealth or conspiracy, and how better to do so than to pay a largish sum for an advertisement in a local newspaper of commendable quality.

    ———————————————-
    Selected personal consumption expenditures, 2008, (in billions)

    Total, 10,349.1
    Durable goods, 1,089.4
    Clothing and footwear 337.8
    Food and beverages purchased for off-premises consumption 801.8
    Food services and accommodations 626.4

    Bear in mind that these latter two categories are “interporous.” A delivered pizza would presumably be classified with groceries, and fast-food restaurants sell so much food through the drive-up window.

    http://www.bea.gov/national/nipaweb/TableView.asp?SelectedTable=65&ViewSeries=NO&Java=no&Request3Place=N&3Place=N&FromView=YES&Freq=Year&FirstYear=2008&LastYear=2010&3Place=N&Update=Update&JavaBox=no

  • Brady Svendgard

    I was interested in the comment about newspapers selling real estate. Are they in the US? I’d be curious to know who’s doing that.

    • nakedtruth

      mediaone.com

  • Stan Hogan

    There is much truth to what Jeff has to say. He has always been quite adept at pointing out the problems faced by newspaper companies. Where he falls short is in solutions.

    Though his invented concepts, like the link economy, may actually be viable under his arid outline, good journalism, traditional or otherwise will be in a bad place if such a model comes to pass.

    I have to wonder why students still pay for degrees in a field with so little hope. And by hope I do not mean the slight possibility you could someday be a journalist without having to also work a real job.

    And speaking of real jobs, I wonder what would happen if you applied Jeff’s model to higher education. It’s future also is being transformed in ways that will leave the traditional behind.

    Government cannot keep up its support of those institutions without passing more of the burden on to the students and their families. Many, if not most, are being priced out. Government is facing its own fiscal realities and higher education is feeling or will soon feel that n a big way.

    Sure, having the wise professor standing in front of a class (or a bright grad student in most cases) imparting wisdom is the time-proven legacy model but its survival is dicey. Online universities already are hacking up that model and the door is open for more deterioration.

    Anyway, I lament the loss or diminishment of the newspaper model of the past, as it has been a very valuable, history-changing, institution. But I also see it coming as Jeff has laid out here.

    I hope someone wiser is finding ways to save good journalism in a new model. That model is not here.

    • Andy Freeman

      > Though his invented concepts, like the link economy, may actually be viable under his arid outline, good journalism, traditional or otherwise will be in a bad place if such a model comes to pass.

      The “link enconomy” is simply actionable citations. Supposedly good journalists provide citations – links just make it easy for readers to access what’s cited.

      When a reader arrives via a link, you’re free to monetize that reader as you see fit. A reader who arrives via a link isn’t any different from a reader who gets to your site by typing its name into the address bar.

      • Stan Hogan

        OK, Andy Freeman. When you talk about journalists using a link to add depth or context to their reporting it is a far different animal than the “link economy” as advocated by Jarvis.

        Under his model aggregators are your best friend. They are summarizing your content and linking to your site. How exactly do you monetize that link? More than likely it drives traffic to your site from outside your area. Great for inflating your page view and unique visitor numbers but useless to the local advertiser.

        Perhaps it will drive up the value of those Google remnant ads? A few pennies here and there. Where is the value in someone based in Texas getting a link from Utah? There isn’t much.

        I’m waiting for the “link economy” to make sense and getting tired of the answer “that’s your problem.”

      • Andy Freeman

        > How exactly do you monetize that link? More than likely it drives traffic to your site from outside your area. Great for inflating your page view and unique visitor numbers but useless to the local advertiser.

        It’s not useless to a national advertiser, but I think that you’re doing a disservice to your local advertisers.

        Most people follow links because they are interested in what they expect to find.

        If it’s a link to a local story, they’re expressing interest in your locality. Do you really think that your local advertisers are uninterested in such people?

        > Where is the value in someone based in Texas getting a link from Utah?

        Folks from Texas travel to Utah. Utah advertisers pay good money to advertise in Texas, hoping to reach such folk. Are you really suggesting that those advertisers aren’t interested in Texans who have expressed interest in Utah?

        Another alternative is to serve them ads from their local area. (You claimed that the readers were non-local. It’s hard to know that without knowing where they’re from.) One way to do that is via “local advertising anywhere” consortium not unlike how Ace Hardware lets local hardware stores take advantage of national opportunities.

        If you can’t figure out how to monetise them, you can refuse to send them content or you can make a deal to send them elsewhere, such as another local site that wants them, for a fee. (Porn sites do this sort of thing.)

        However, let’s turn the issue around. If I don’t link to you, you won’t get any traffic from my readers. Are you better off without that traffic? I put it that way because links give you readers that you wouldn’t get otherwise.

        > Under his model aggregators are your best friend.

        There are two cases. One is readers who wouldn’t otherwise read your content – those are readers you wouldn’t get otherwise, the folks who we’ve been discussing. These folks have nothing to do with declining circulation because they were never part of circulation.

        The other is readers who would otherwise go to you but go to the aggregators because that’s a more convenient form of getting the content that they want. They’re folks who you should know how to monetize. However, they’re also the folks who are part of declining circulation.

  • Aaron Kaplan

    Mr. Jarvis,

    As you are well aware, your beloved “new tools” also face the same harsh business realities. I’m sure good journalism that’s rooted in its long and respected history and traditions will be around much longer than twitter. I give twitter another 2 years–3 years max. If you’re so knowledgable about business, please explain otherwise.

    • Ed

      Free is not a business model.

      • http://www.buzzmachine.com Jeff Jarvis

        Oops. We must close all the television stations then. Thanks for that.

      • Andy Freeman

        > Free is not a business model.

        Free is not a complete biz model, but no one is suggesting otherwise.

        While free isn’t a complete biz model, free can be a powerful part of a biz model.

        Consider search engines such as Google’s. They are free to folks who want to search.

        Free as part of a biz model is not new. Newspaper racks displayed the headline, making that content available for free to anyone who walked by. Was that dumb?

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  • Required Name

    Notice how these failings in business model are eerily similar to the music industry’s. Except THEIR lobbyists managed to “pwn” the US government which is busily following up on that with ACTA. Arguably, a whole series of warcrimes against the free market.

    Me, I rarely read newspapers these days. In fact, I also don’t bother going to see the latest formulaic from hollywood, no longer even own a television set, or even listen to the radio simply because what all those offer is tripe. I still like print well enough, but the model doesn’t have much staying power in the face of /on line/ news and discussions.

    In that sense, it’s good to remember that part of what a newspaper offers is indeed that community service; and remember they should. I’ve seen more than one set of “netiquette guidelines” for (quality, respectable) newspapers’ “webforums” that were outright painful in how they missed the mark. I’m not shedding a single tear to see their current form’s demise.

    There may be a market emerging for paid-for high-quality analysis, but that needs better journalism than today’s professionals manage. For example, he said/she said does have merits but contrasting very real but relatively not very big problems at the fukushima plants with an experteer from greenpeace is not doing anybody a service. And it wasn’t one or two news outfits that kept on diggin ever deeper into a story that was obviously far less than initially reported already, but just about all of them. The frenzy kept on feeding off itself. That sort of thing, and this is far from the only example but a nicely recent and blatant one, gives news a bad name.

    In that sense, the ‘web in general and wikipedia in particular is a great discriminator: It’s easy to read up on the background and check that a journo knew what he was talking about. If he just copied the wikipedia article or even references it, he hasn’t done his homework and doesn’t actually add value. Easy availability of information has both made the job easier, and that much harder, and will drive structural changes in the news gathering business model too.

  • http://www.dannywandelt.de Danny Wandelt

    Mr. Jarvis,

    always fun to read your postings. Especially here in germany there should be more journalists and news media manager read this posts, even if its not fun to them :)

    Best regards

    • nakedtruth

      Herr Jarvis:

      Es ist immer lustig zu lesen Ihre Buchungen. Besonders hier in Deutschland sollte es mehr Journalisten und Medien-Manager lesen Sie diese Beiträge werden, auch wenn ihr nicht Spaß, sie zu

  • Tom

    One of your best posts ever, Jeff!

    If I may add one comment: To my mind you are using the term “business model” a bit too often – and without really defining what you mean by it. Much like everyone else indeed.

    A good starting point might be the book “Business Model Generation” by a swiss guy named Alex Osterwalder, who wrote his Ph.D. thesis about this topic: http://www.amazon.com/Business-Model-Generation-Visionaries-Challengers/dp/0470876417/
    (Disclosure: I do not have any personal advantage in recommending this)

    Best regards

  • http://mediacafe.blogspot.com jeff mignon

    Newspapers are in the advertising business, with on average 80 to 85% of their revenue coming from ads (in North America). They are facing four major issues with this business:
    #1- They have lost the monopoly of distributing advertising.
    #2- Advertising space has no limit on the digital word, driving prices down
    #3- Google has changed the game in the advertising business from “eye ball” to “ROI”. Customers pay only if there is an interaction with the ad.
    #4- ROI means targeting ad and customer database qualification. Unfortunately, newspapers are not yet equipped to fight this data war… even if some are trying hard (see below)
    #5- Digital means also better measurement than polls. Better measurement regarding the interaction between customers and ad, but also between the customer and the content. And those measurements are not saying what the polls were saying. They are saying that maybe we don’t engage with content as much as we wanted to believe it before, same with ad.

    So what are the possible directions:
    #1- To rely less on advertising and increase paid customer revenue, like the NYT is doing right now (50% of is revenue is ad now). But, less ad $ means less money because it is way more costly (acquisition cost) to make $1 in paid reader than $1 in advertising. So no choice here than to reduce operation cost. Reducing operation cost does not mean, reducing quality (so it can), it means reducing your focus. You can’t talk about everything. You can’t offer the same package. Is it bad? Personally I don’t think so. Except that the focus on what brings ad $ (entertainment for ex.), might not be the focus that is good for citizen and our society.

    #2- To diversify revenue. Many newspapers are doing or trying to do that now. The magazine industry has been very good at that, in particular in Europe. But once again, acquisition cost for diversification $ are going to be probably higher than for ad $… and you probably can’t in the short run maintain your operations. Rue 89 (in France), a news site started by former journalists from the famous newspaper Libération, are doing that and they are closer and closer to be successful.

    #3- To develop a SEPARATE online / digital operation that don’t have the same operational cost that a traditional media company. Then, to build from there. The route is longer and, not doubt very hard. In North America (sorry I can’t be more precise), I know a small publisher that has developed local websites (over 10). All of them have very small operations. All of them are making money and being profitable. Of course, nothing to do, in term of revenue, with their print competitors for now BUT they enjoy a very nice profit margin, higher than some of the print operations that I know.

    #4- Enter the ROI advertising battle and develop a strategy to generate highly qualified customer databases. In Sweden, one of the largest newspaper publisher Stampen, has been understanding the necessity of entering this ROI battle. They have developed a very smart mobile platform — TULO — that allows to generate new advertising revenue BUT ALSO to help newspapers to create highly qualified customer databases. More than 80 newspapers are using it in Europe. Revenue generation is starting to be very interesting as well as data gathering (disclosure: we are helping Tulo).

    We all know that the decline in ad revenue is the main issue. If newspapers want to compete in this field they need to become better platforms for advertising and prove ROI. The last numbers from the newspapers industry are not good. More advertising revenue declines. For example, McClatchy is entering its “nineteenth straight quarter of revenue declines”, with -9.5% for this quarter and the next one is not looking good either (http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=149365&nid=126155)

  • vagueos

    Are we still arguing about this, i’ve been reading these posts for about the past 5-10 years now and lets face it nothing has changed. Reality is everyone knows the CURRENT business model is broken, eveyone knew it was coming but it still took years to react because we wanted to milk every last penny from the cash cow. (I’ve worked in media for 17 years, in advertsing and product development, on and offline)

    What’s happening to newspapers is no different to what happened to everything else touched by the internet revolution, the difference here is value providers in other areas (itunes and Apple being a classic example) built a paid for model based on providing a service that people wanted. Lets face it you don’t have to pay for music if you dont want to!

    This is about restructuring the industry (like banks did 20 years ago but we wont go into that) and diversification. Newspapers and media companies produce huge quanities of content that they by and large monetise once with a cover price and supportive advertising. If we want to continue being successful then its time to leverage the maximum amount of value from unique content that can’t be easily found elsewhere and leave easily replicated stuff to the amateurs.

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  • http://www.pickledblog.com/ Olga Ivanova

    Jeff, thank you for being an “old-school” media person who deeply understands modern trends in media. A rare combination! My favorite part in this post is “Some readers are not worth saving”.
    One of the oldest and one-time biggest newspapers in Russia “Trud” will be closed starting May 1st. This publication was puiblished since 1921 and had a record-breaking circulation of 21.5 mln in 1990. Today it’s a team of very sad people desperately trying to save something that the audience does not want anymore. And they claim “we still have readers!”
    Right, but that is exactly the case when some readers are not worth saving.

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  • Nanker Phelge

    Looks like the Guardian is learning some hard economic lessons, thanks to the strategy of Alan Rusbridger . . .
    http://www.theregister.co.uk/2011/04/28/local_blog_guardian_shut

    Jeff, any thoughts on why free local blogs can’t seem to work financially?

    • http://www.buzzmachine.com Jeff Jarvis

      The Guardian never approached local as a business but as a mission without a revenue plan. It decided that it’s not good at local. It is building its international presence; thus its more aggressive entry into the U.S. However, at the same time, it is starting blog networks.

      • Nanker Phelge

        I was under the impression that the Guardian started these blogs at least partly to experiment with new business models. Here’s what Emily Bell said at the time:

        >>>”We are aiming to explore new models for journalism and social engagement through a mix of reporting, collaborative engagement with local communities, organisations and groups and aggregation. It is a new approach not just to journalism for us but also for technical development and commercial models.”

        I wouldn’t know how these blogs worked journalistically. And I think it’s important to experiment with new business models. However, it’s also important to reach conclusions from those experiments. If you look at what the Guardian has done and how the Guardian is doing, it may be time to conclude that free content simply isn’t a viable business model for resource-intensive international reporting.

        That’s my question. Ann Arbor isn’t working. The Guardian is dying as we speak. The WSJ and the FT are thriving. There’s more to this, of course, and I don’t want to oversimplify all of this. But at what point is it time for you to question some of your assumptions – not about the situation newspapers are in (generally speaking, I agree) but about potential solutions that might get them out of it?

        • http://www.buzzmachine.com Jeff Jarvis

          All roads lead to Ann Arbor. You’ve made your point. Again and again. Move on.

        • Nanker Phelge

          Does that mean you’ll admit you’re wrong?

        • Nanker Phelge

          I didn’t mean that to sound rude – sorry if it did.

          But do you really think the networks work as businesses? Comcast’s acquisition of NBC apparently valued the network at *zero*. The others do better, to various extents. But they’ve all made clear that they want to get paid for their content – it’s an obsession at Fox, and CBS has made it a priority as well. If you look at the P&Ls of the six media conglomerates that own movie studios, all except Sony depend heavily on pay-TV. (Sony produces TV but doesn’t own channels.) Over the past half-decade, since the DVD boom started busting, every single one of those companies gets most of its profitable growth from cable channels, and roughly half of that from carriage fees.

          You may be right that free TV is a great business – and, hey, I’d be psyched to own anything more than the shirt on my back. But I don’t think you can present numbers that back it up.

          Same with Ann Arbor. Maybe free is the future of the mass media business. (I mean the business of reporting as papers do now, not relying on the work of others.) If I could predict the future, I’d be an investor or a fortune teller. But there’s not much evidence that this is so. You keep saying it is. I’m challenging you to back it up with statistics.

          You can dismiss me or call me backward-looking. But it would be more effective if you could back up your points with solid numbers – P&Ls, CPMs, stuff like that. Commandments are cool, and yours have a lot of style. But I’d like to see some reported analysis of how they’ve worked so far.

        • Nanker Phelge

          Jeff, did you see that Google has been found liable for copyright infringement in Belgium? Details here:
          http://www.pcworld.com/article/227379/google_busted_for_copyright_violation_in_belgium.html

          Although I don’t agree with this particular decision, it shows how copyright laws in Continental Europe are very different – and usually stricter.

          While the idea of Google paying to link is silly, I don’t think that’s the goal here. I think the goal is to create pressure to require Google to pay a licensing fee for news the way restaurants pay ASCAP or BMI to play music.

        • Andy Freeman

          > I think the goal is to create pressure to require Google to pay a licensing fee for news the way restaurants pay ASCAP or BMI to play music.

          That may be the goal, but Google can do quite well without those news sources. How well will they do without Google?

          Never wish for something that you won’t be happy with.

        • Nanker Phelge

          >>>How well will they do without Google?

          They seemed to do pretty well with Google for several decades, so I’m sure they can manage. Right now, papers that depend less on advertising – and thus less on Google – are thriving. Look at the WSJ, the FT, Spiegel (a mag), etc. The traffic that Google sends papers isn’t worth much, and it’s worth less all the time.

          If Google can “do quite well without those news sources,” why do they spend millions lobbying for looser copyright laws? For fun?

        • Andy Freeman

          > They seemed to do pretty well with Google for several decades, so I’m sure they can manage.

          Unless they have the same paid circulation that they had then, the “they did well in the past, so they can do well now” assumption seems shaky.

          As to whether those publications “need” Google, do they block Google search with their robots.txt? If not, that indicates that they want Google. Are they wrong?

          > The traffic that Google sends papers isn’t worth much, and it’s worth less all the time.

          It’s clearly worth something, or they’d block Googlebot with their robots.txt.

          Almost all of the traffic from Google search is traffic that they wouldn’t have gotten otherwise (and didn’t get before the Internet). If that traffic is such a loss, why aren’t they getting rid of it? (That’s a serious question.)

          > If Google can “do quite well without those news sources,” why do they spend millions lobbying for looser copyright laws? For fun?

          Quite possibly, or maybe it’s out of their sense of “what would be good for the world”. After all, they spend far more money on autonomous cars than they do on lobbying, and ACs are just one of the many toy projects.

          If I were a Google investor, I might care about the many odd and expensive things that they do. Or, I might notice that while those things are expensive on an absolute sale, they’re in the noise at Google.

          That said, journalists don’t get to complain about other people lobbying because they’ve been playing the “favored coverage” game too long.

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  • http://www.helltech-designs.com/ Ivan Horvat

    I agree with everything you said here, mr. Jarvis.
    I have no experience in economics, business or management whatsoever, but I got my eyes wide opened; Here in Croatia there were lots of small businesses which closed after a little while, simply because there was no use of them.

    “Value is determined by need.”

    Not only value. I think that *businesses* should be determined by need to. What I want to say is that it is not a good idea to create a new business nowadays, unless it can be really competitive from the beginning.

    P.S. Sorry for bad english.

  • http://www.worldschooldatabase.com Yurtd??? E?itim

    I agree with the most of the items on the list…However, “Facebook gets roughly 30 times the engagement of newspaper sites”..Underlying assumption is that Facebook will continue to do that…What if, Facebook loses popularity…Maybe some other website will take over the crown and dominate the web…Consumer needs and likes tend to change on a super fast pace…I think new ways of sharing news should be created constantly to be fresh and ready when new fashion waves begin to spread…

    • http://www.buzzmachine.com Jeff Jarvis

      That’s quite beside the point. Facebook is just another measure of engagement. Others will surely come to be engaging. The point is whether newspapers can learn how to.

      • Scott

        ‘Fast Five’ had 30 times the engagement of ‘Inside Job’ at the box office.

        That must make it a better movie.

      • Andy Freeman

        > That must make it a better movie.

        It depends on your goal.

        If your goal is “art”, you’re going to have smaller budgets.

        If you want to do “journalism art”, you better have a day job, especially if you’re “me too” in any way.

        As someone pointed out, if no one is willing to pay to read what you write, perhaps professional journalism isn’t a good career choice for you.

        And no, “we’re doing valuable stuff” doesn’t change that. In fact, since most versions of that story include lies about what modern journalism has actually done, those stories are actually counter-productive. (Today’s fact – “vibrant democracy” predates modern journalism so it’s absurd to claim that MJ is essential to democracy.)

  • http://butriga.tumblr.com Angelo
  • theintegrator

    Nice list of “rules.” Can’t disagree. But…the question is how to succeed. I have read and lsitened to you for many years now and I haven’t really heard solutions from you, Jeff. Just observations. As an educator you probably have some solutions, unless you prefer the Socratic method. So, give some solutions. Observations are like…well, let’s say toes, instead of the usually cited body part. Everybody has some. Solutions would be nice…

    • http://www.buzzmachine.com Jeff Jarvis

      Oh, come on, if you’ve read me for years then you’ve, for example, surely dug into the business models at NewsInnovation and read every post on this blog under the tag newbiznews and followed the work of John Paton at Journal Register, whom I advise, and noted how I teach journalists to become entrepreneurs and start sustainable journalistic enterprises at CUNY. Start there, sir. *Then* we can talk.

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  • Mara

    I think that it is definitely true that money has no heart – this applies to all sectors and it is the cause of today’s economy and market distortions. Wild marketing accounts a lot for such distortions. For news and newspapers and magazines, it is more or less the same thing. A mass of poorly educated people require alarming news, big titles and ready-made solutions. We often have to do with ignorant masses who have a relative idea of what value is. Perhaps the challenge is to target the value that different sections of the population give to news. Focusing on simple and understandable language, with a view to teaching and helping ideas form and develop, in addition to increasing participation, may be a way to fill the gap and transform current and inappropriate ways to do journalism.

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  • http://www.godudu.com Tezo

    http://www.godudu.com auto human-translates chat messages in real time between users’ languages – which means everyone can talk to each other…

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  • http://globalvue.wordpress.com Andria Krewson

    And now, the day after the announcement of bin Laden’s death, another line to add:

    Your adrenaline rush to get the news on a printing press is not a business mode.

    Or is it? Will the market reward the news orgs. that had up-to-date news in print? Early signs say no. Perhaps it’s different in areas without ubiquitous broadband access.

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  • Nanker Phelge

    >>>Oops. We must close all the television stations then. Thanks for that.

    Jeff, you don’t seem to understand the television business very well. The idea that TV works on free has become a common talking point. But look at the numbers. Most cable stations make about half their revenue on carriage fees. And the free broadcast model just isn’t working very well. That’s why all the networks want carriage fees. And it’s why USA is far more important to NBC Comcast than the NBC network is.

    You’re entitled to your opinion but not your own facts. Do some research.

    • http://www.buzzmachine.com Jeff Jarvis

      Well, Rob, I do think the free networks still work as businesses. Smaller. Tackier. But I’ll bet you’d like to own one.

    • Miles Davis

      Whaddaya mean Jeff doesn’t understand the television business? He was on an episode of “Moonlighting,” for God’s sake!

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  • Kelly

    I’m curious if the writer of this blog actually has worked at a newspaper?
    There are several statements that do ring true, however, it appears there is no love or heart for the business.. and despite the “hard truth that money has no heart” the reality is if you don’t love what you do, no one else will either (be it print or social media).

    As for the statement… * Some readers are not worth saving. One newspaper killed its stock tables, saved $1 million, and lost 12 subs. That means it had been paying $83k/year to maintain those readers. In creating business plans, the net future value of readers should be calculated and maximized.” .. Let’s be real, these only were the people that were so upset who canceled subscriptions NOT the number of people who read this section.

    Teach your students how to be successful and career driven, but please don’t take away their souls in the process.

    • http://www.buzzmachine.com Jeff Jarvis

      why don’t you read my about page. i’ve worked for a few….

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  • http://thelmingview.blogspot.com/ john liming

    The business model of the Liberal is: Find a need and fill it. The business model of the Conservative is: Find a resource and plunder it.

  • Nanker Phelge

    >>>maybe it’s out of their sense of “what would be good for the world”

    If you think Sergey gives millions to Creative Commons because he really thinks it’s an important cause, I can get you a great deal on a bridge in Brooklyn.

    Generally, I think your logic is flawed. Just because newspapers don’t turn down the marginal revenue that comes from additional traffic doesn’t mean they wouldn’t benefit more from license fees – or that they’re not legally entitled to them. In the U.S., where Google employees were some of Obama’s biggest donors, Google gets the laws it wants. But other countries will enforce copyright law – as well they should.

    There’s no reason Google shouldn’t pay for the Google News snippets they sell ads against. If they profit from the content, they should pay for it. Not much, but something.

    • Andy Freeman

      > Just because newspapers don’t turn down the marginal revenue that comes from additional traffic doesn’t mean they wouldn’t benefit more from license fees

      I didn’t say that newspapers wouldn’t benefit from more money. You were claiming that the traffic is worth nothing. As I’ve pointed out, their behavior shows that that’s probably false.

      > – or that they’re not legally entitled to them.

      Do you think that you’re entitled to charge a fee to someone who cites your work? I ask because that’s a very novel claim.

      Newspapers are entitled to charge anyone, including Google for access. However, no one is obligated to access.

      As I’ve popinted out repeatedly, newspapers can easily stop Google from indexing their sites, ie, accessing for the purposes of making links to their content available as search results. They don’t.

      In some cases, I’ll bet that Google does pay for “indexing access”. However, Google is free to say “your price is too high” and do without your content.

      If a given newspaper can get such a deal, great, but in most cases, Google will say “no thanks, we’ll do without.” What then?

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