Journalism is a business – that is how it is going to sustain itself; that is a key precept of the New Business Models for News Project. But is it still an industry dominated by companies and employment?
In the first part of his analysis of the news business, BusinessWeek chief economist Michael Mandel equates bad news about news with the number of journalists employed. He charts newspaper jobs falling from more than 450,000 in 1990 to fewer than 300,000 today and calls that depressing – which it is, if one of those lost jobs is yours. But it could also signal new efficiency and productivity, no? Looking at these numbers with the cold eye of an economist whose magazine and job aren’t on the block, perhaps it is nothing more than the path of an industry in restructuring. Perhaps it’s actually a signal of opportunity. Indeed, Mandel then laid that chart atop one for the loss of jobs in manufacturing and found them sinking in parallel, with newspapers just a bit ahead on the downward slope today. “Not good news, by any means,” he decreed.
But there is the nub of a much bigger trend: the fall news as an industry paralleling the end of the industrial economy. That’s not just about shedding the means of production and distribution now that they are cost burdens rather than barriers to entry. It’s about the decentralization of journalism as an industrial complex, about news no longer being based solely on employment.
A few months ago, I quibbled with Mandel’s BW cover story arguing that America has experienced an “innovation shortfall.” There, as here, I think he’s measuring the wrong economy: the old, centralized, big economy. In both cases, he misses new value elsewhere in the small economy of entrepreneurs and the noneconomy of volunteers.
I return again to the NewBizNews Project, where we modeled a sustainable economy of news at between 10-15% of a metro paper’s revenue – about as much as any of them bring online – with an equivalent amount of editorial staffing but those people are no longer all sitting under one roof; they work in – and oftentimes own – more than 100 separate enterprises. I return, too, to the Wikimedia Foundation calculating the value of time spent on edits alone with it adding up to hundreds of millions of dollars.
In both cases, tremendous value is created at tremendous efficiency outside of the company and in great measure outside of employment.
So is employment the measure of news? No. Is it the proper measure for every industry? Not necessarily. Is it the measure of the economy? Not as much as it used to be. Media is becoming the first major post-industry. Others will follow. You just have to know where to look.
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It’s one matter when new value is created outside old companies in industries such as retail – in WWGD?, I cited $59.4 billion in sales from 547,000 merchants on eBay in 2007 vs. $26.3 billion in 853 Macy’s stores – but another matter when the employment is replaced in industries built around priesthoods: journalism, education, even government and medicine. Then not just economics but behaviors change.
Zephyr Teachout has a good column in tomorrow’s Washington Post predicting the disaggregated university. It’s very much in harmony with what I wrote in What Would Google Do? – that complete chapter here. I also gave a talk on the topic via Skype to the Media Education Summit in Liverpool this week; the audio (not very good) is here. The bottom line of all this: Education will follow the path of newspapers, toward a disaggregated, distributed, more efficient future based on abundance rather than scarcity, with control at the edge.
Google has an image problem – not a PR problem (that is, not with the public) but a press problem (with whining old media people). Google is trying hard – too hard, perhaps – not to argue with the guys who still buy ink by the barrel. Google is only causing them to buy fewer barrels. And newspaper people will use their last drops of ink to complain about Google’s success and try to blame it for their own failures rather than changing their own businesses.
What should Google do? I think it needs to become news’ best friend.
Last night, I got email from a Le Monde journalist who said, “I’m on the way to write an article about Google facing a rising tide of discontent concerning privacy and monopoly.” She went on to wonder whether these critics would move to Bing and, at the same time, whether Google would become the next Microsoft with a negative image and government pressure (aren’t those two questions inherently contradictory?).
I wanted to know if it was possible for you to respond to my questions?
I threw out my glass of Bordeaux (it had turned) and poured a nice American cabernet and then responded:
There’s one problem: I do not buy the premise of your story. I’ve seen this story again and again, especially from France. I’m not sure what it is the French have against Google, but it’s some form of national insanity, I think. Most French publishers rejected my book, What Would Google Do?, because they said they wanted a diatribe against Google – that, it appears, is the French reflex. Only after I blogged that did my brave publisher come forward and publish it as La méthode Google.
Do some people complain about Google? Yes, it is often the same people who complain about the internet and about change and technology and simply use Google as their target simply because it is so big and so innovative.
Google is the fastest growing company in the history of the world, according to the Times of London. It is the No. 1 brand for three years running, which means that people not only know but admire it.
So who are these people who you say are part of this “rising tide of discontent” about Google? How do you measure it? How big is the tide?
How big was it? What is its impact? I don’t see it. I see journalists doing this story because they want to.
Google is not a monopoly. It is a competitive company and it took advertising dollars for one simple reason: because advertisers found a better deal there – buying performance, not scarcity, with Google sharing their risk – than they ever found in our old media. It is media companies’ fault that they lost their customers after cheating them for too many years.
Privacy? That is an overused word. The issue is not privacy, as I say in my book. It is control. You should also look at the benefits of publicness, which come when we share things about ourselves and find others like us. If you have problems with privacy then you have problems with every member of Facebook and its clones across the world and the entire generation that made social sites huge.
With all respect, it appears to me that you have already drawn your conclusions and written your story – that there is this “rising tide” you see against Google, that is a “monopoly,” that people are leaving for Bing (introduce me to some, would you?), that it now has a “negative image.”
I don’t see it.
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Last week, I got an email from an Israeli journalist, which said: “These days we are working on an article about Google, focusing on the company’s failures rather than on its well known successes.”
Another reporter decides what to say before doing the reporting. Oh, it’s hardly uncommon. But I decided not to bother with this. I’ve done it too often: arguing with a reporter’s premise and then not appearing in the story because I dared to disagree.
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This week, a Google PR person I met at the Aspen Institute sent me links to a public exchange in editorials in the Seattle Times. It started with an editorial lambasting Google, using Italian newspapers complaints as its peg: “Google is a wonderful thing. It is also a dangerous thing, as it keeps demonstrating in its quietly rapacious way.”
But they got their facts wrong. They said that if a paper didn’t want to be in Google News, it couldn’t be in search. All they had to do was a little research – otherwise known as reporting or fact-checking – to find out that was false. They also suggested that the government should go after Google under the Sherman Antitrust Act. A Google attorney sent a response explaining the law and business to them:
Your Aug. 30 editorial [“Rapacious? Google it,” Opinion] seems to misunderstand both competition law and how Google News works.
Under the antitrust laws, there’s no problem with a company becoming successful, so long as it earns it fair and square. The problem is when companies act illegally to maintain their market position — by foreclosing competition or making it difficult for users to switch. No one has seriously suggested that Google’s success is due to anything other than hard work and constant improvement.
Your editorial also wrongly suggests that news organizations can’t withdraw their content from Google News without also removing it from all Google searches. That’s false. Publishers are in complete control over where and whether their content appears.
News organizations can use a universally honored technical standard called “robots.txt” to block their content from being indexed by Google and other search engines. And if they want to be removed only from Google News, they can just tell us directly, and we’ll remove them.
Still, of more than 25,000 news sources, only a handful have chosen to be removed. Why? Because Google News sends news organizations more than a billion clicks each month, which they can use to win loyal readers and generate more advertising revenue.
The Times wasn’t at all embarrassed about being so wrong and came back against Google again. Just because they wanted to. Just because they felt like it. Just because they need an enemy to blame for their own failing business.
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Google is far from perfect. It ain’t God. In my book, I complained about its opaqueness while demanding transparency from the rest of us and about its policies in China. There’s plenty to criticize.
But these media people are going after Google’s success for no good reason other than their own jealousy. It’s not just that they dislike the competition – and they do, for it is a new experience for too many of them. If they were smart, they’d use Google to get more audience and make more money but they don’t know how to (or rather, they’d prefer not to change). No, the problem is that Google represents change and a new world they’ve refused to understand.
What should Google do?
I’m not sure but I’d start by using Google’s platform to enable the new ecosystem of news, the entrepreneurs who will build the future of journalism – and that could include the incumbents, if they have any sense. That framework could include promotion (via GoogleNews and more), revenue (via Google advertising), technology (publishing, content, and measurement tools), consultation and education (on maximizing attention, on using new tools), and R&D (Google Wave for news, the hyperpersonal news stream….).
Google should position itself as the friend of news and then maybe it won’t matter if it is newspapers’ friend; they’ll just come off as the whiners they are.
: LATER: Google News published a video explaining some of what goes into its scraping and ranking and how to improve your chances of getting good links. It’s a first step:
Note that Google News is now trying to understand, through others’ citations, which publications are first or early on a story so it can link more effectively to news at its source.
In newspapers’ game of revenue roulette, there’s a lot of talk lately about their trying to create membership plans. The New York Times and the Guardian, to name two, reportedly have visions of tote bags, mugs, and events in their heads. And I think that’s a fine idea. No salvation. But a fine idea. I’ll wear a Guardian hat proudly. I’ll go watch Nick Kristof present a slide show of what he did on summer vacation. (Other papers are merely using the m-word to cloak a pay wall; you know what I think about that.)
What the Times and Guardian seem to be considering is membership in the NPR mold – give us money and get a T-shirt to brag about it. That works at NPR because the network is a charity and supporting it is a political statement. The same might be true of the Guardian, which operates on a mission (“the world’s leading liberal voice”) and is owned by a trust. But the Times, as the product of a profit-making company with shareholders? I’m not sure. We’ll see.
In any case, the membership bar has moved up. It’s not enough to let people give you money and promote you. Now you have to invite them to have a real and meaningful role in what you do, even a sense – if not a stake – of ownership and, consequently, control.
Take Wikipedia. At the Aspen Institute two weeks ago, Wikimedia Foundation head Sue Gardner said they calculated the value of the work people put into editing entries. They could measure only the time that went into edits and updates, not the time writers may have spent elsewhere researching and writing. Even so, the value of time spent added up to hundreds of millions of dollars. That is how this incredible asset was built: minutes at a time. Note well that Wikipedia did not become valuable because it extracted money from the market and its users pockets. It became a great asset by enabling people to make it, to take control of it, to have a sense of ownership in it. It thus requires very little resource to run – and it gets the money for that from these users. Now that’s membership.
Note that Wikipedia is trying to figure out what value it needs to add back to its community’s product, not as a controller but as a contributing member itself. That’s part of the secret to successful networks: everyone’s a member, no one is king.
Now take craigslist. Craig Newmark was also at Aspen, befuddling the media machers, as he always does. But he shouldn’t. They are the ones who created his model. Newspapers created value by becoming the marketplaces in their communities for home, merchandise, and job transactions. Craig created the successor marketplace the best way he could: by being free. He extracts minimal value to grow to maximum size; those are the confounding network economics I describe in What Would Google Do?. The point is that Craig did not create a marketplace he would control, as newspapers did; he created a marketplace the community built and he supports that with customer service. He serves the community as a member.
When I was last in London, Guardian editor Alan Rusbridger was contemplating membership and he told me about the Barcelona Football Club, which is owned by its fans and in which members have the privilege to vote on leadership and more. Can a newspaper be owned by its community?
This morning, I recorded the next Guardian Media Talk USA podcast with Baristanet founder Deb Galant and Star-Ledger editor Jim Willse and we discussed the CUNY New Business Models for News recommendations, which center on creating collaborative networks among the new players in the next news ecosystem. Willse riffed on the idea of creating co-ops, like New York apartments, where the community sets its rules and hires the super to make sure the heat is on. All benefit, all have a stake in the success of the community.
Add all this together: contribution to a community to build it as an asset; ownership of the community by the community; members having a mutual stake in the community; members exercising control over the whole. That is membership. Not tote bags.
How far would and should news organizations be willing to go with this extended vision of membership? I can see newspapers as they have existed being quite uncomfortable with the idea of handing over control and even membership to the community. I can hear their fears of being co-opted or gamed. But that comes from still thinking of news as the property of a single company. Those days are soon over.
When you think of news instead as the province of an ecosystem that is distributed and owned at the edges by many players operating under many means, motives, and models, then the notion of contribution, ownership, and control changes. People own their own stakes but they benefit by joining together cooperatively. They create a tide upon which all their ships rise. That’s a network, not a company. Everyone contributes, everyone gains value and so does the whole: Everyone cooperates in systems of enlightened self-interest. Thus greater value is created (see: Wikipedia v. World Book) because more people contribute value but it is not owned centrally and benefit moves to the edge.
In the new post-industrial economy, I argue that there are three opportunities for growth and value: building platforms, building value atop those platforms (as entrepreneurs), and building networks to help these entities optimize their value. That is how news and many industries will be rebuilt, I believe.
In this vision, then, the basis of news is the platform, not the newspaper company. The value is built by owner-members, more than staff. The infrastructure for the network is a service to it, not a barrier to entry.
Yesterday, I was down visiting Vivian Schiller and her management team at NPR – who, by the way, are clearly having great fun (unlike other folks I know in the business). We talked about the New Business Models for News Project and NPR’s role in this new ecosystem. I think NPR and its stations can provide a platform and network services to many players in local markets and take a key role in the future of the news ecosystem. And NPR understands the beginnings of what it means to have members, so long as they move past tote bags.
So, yes, news organizations, please think about membership. But don’t think if it as merely a revenue opportunity. That is doomed. It is insulting. It brings to value to its members. It’s only a new price tag for a new product: a mug instead of news. No, instead use this opportunity to think about opening up as an enabler and member of a new network, a new club, and don’t think of yourselves as the owners of this club but instead as just another member.
Like priests looking for someone to sacrifice, Alan Mutter, Steve Buttry, Howard Owens, and Steve Yelvington have been on the lookout for the sin that led newspapers astray. For Mutter, it’s not charging; for Buttry, it’s not innovating; for Owens, it’s tying online dingies to print Titanics (my poetic license); for Yelvington, it’s inaction.
But I think Owens hit on it when he wrote this: “I realized I needed to flip the expense/revenue picture upside down. Instead of thinking about how to generate more cash, I needed to figure out how to create a news operation that could exist profitably based on a reasonable expectation for local online revenue.”
Right. In other words, the sin was not running a business. It was not creating a sustainable P&L.
Newspapers have been too busy trying to protect specific budget lines that protected specific interests – the size of the newsroom, the ego expressed in gross revenue that yields stock performance and salary bonuses, the size of unionized staffs (up or down), the rules that governed advertising relationships even as they disappeared. They made preservation their mission.
What they should have done instead is rethink the bottom line: How is journalism going to be sustainable in new business realities?
Said Owens: “In a market where the newspaper newsroom might cost $10 million, I knew how to make $1 million online, or even $2 million, but I didn’t know — and still don’t — how to make $10 million. So if I can make a million online, why do I need operate a $10 million newsroom, especially given the greater efficiencies of online publishing?”
He built a realistic budget based on new business realities. Now picture news executives across the country hitting themselves on the head saying, “Damn, why didn’t we think of that?” They should have. But to do so would have required them to completely tear apart their businesses. Witness Detroit, banking, retail, advertising, insurance, and every other industry undergoing upheaval – nobody wants to do that.
Just as the bloggers linked above took their share of blame, so will I. Owens suggests that the problem with tying old and new operations together. At Advance, where I worked for a dozen years, we created separate online companies, which had some benefits: enabling the sites to build what was right for online (that is, interactivity), creating real value for advertising (rather than throwing in online as value-added), creating smaller and differently skilled staffs. But it also created problems: sites that were dependent on newspaper content, rivalries that killed collaboration and limited the responsibility anyone would take for the future. In the end, everyone needed to rethink what they were creating and what value it had, how they were creating it, how they related to their communities, and how the business could be run. But I didn’t see that happening anywhere in the industry. Everywhere, I saw people looking for someone to blame and somewhere to hide. I don’t put all the blame on the individuals because that’s how companies and industries operate.
Individuals who want to succeed in this upheaval become entrepreneurs. That’s what Owens – and many others – are doing. That, I’ve come to see, is the basis of the future of news.
In our New Business Models for News Project at CUNY, we threw out the old business assumptions with the old business. That’s why we tried to answer the tough question people were asking: What happens to journalism if the paper disappears? (their implied answer was that journalism does, too). What we came up with was one entity being replaced by well more than 100 entities – 1,000 entities, perhaps – each run according to new opportunities and needs, each smaller, each contributing real value, each sustainable (some very profitable; some choosing no profit). Everyone in this ecosystem has to think about running a business rather than preserving one.
Someone else looking for sinners is James Murdoch, whose MacTaggart Lecture at the Edinburgh Television Festival excoriated the BBC for bigfooting the news market in the UK and the government for enabling it and for regulating everybody else. I agree with him to an extent, this extent: that profit, in his words, will make journalism sustainable, independent, and innovative.
Except I doubt that this sustainable, independent, and innovative journalism will necessarily come from Mr. Murdoch’s father’s business and its cohorts because they are the ones that even today are trying to maintain the scale and models for their old businesses rather than inventing new ones. Look, instead, to the entrepreneurs who are starting over and rethinking the business from the bottom up, as Owens is.
The newspaper industry should be sobered by Martin Langeveld’s calculations, based on the Newspaper Association of America’s misplaced bragging about Nielsen internet data, that only about a half one one percent of time spent online is spent on newspaper sites.
It is clear that if journalists want to be supported – let alone have impact and influence and find their days worthwhile – they need more people to spend more time with news. I believe they should be doing the opposite of what is being suggested in many quarters: clamping down controls to try to fight aggregators and search engines, threatening to build pay walls, consolidating content into destinations they’d have to work harder to get people to visit.
Right now, news organizations should be trying to reach more people and engage with them more deeply. They should seek hyperdistribution.
Since when did it become OK for media people to shrink their audiences? Since they gave up on the ad model, that’s when. But I am not ready to surrender to the idea that advertising, which has supported mass media since its creation, is over. Yes, ad rates are lower; welcome to competition. That’s all the more reason why publishers must attract larger audiences publics – make it up on volume – as well as more targeted and valuable communities.
In my presentation at the Aspen Institute on CUNY’s New Business Models for News Project, I listed some of these opportunities, even though we didn’t build them into our first models because we wanted a conservative base case. Next we are building blow-out models incorporating these means, many built on the principles of the link economy:
* Reverse-syndication. We suggest that the new news organization (NNO) we envision in our ecosystem can create highly targeted content that can be distributed on the sites of other members of the network. So, for example, a new news org could create voting guides for every state assembly member and all the hyperlocal bloggers in the state could offer them to their readers. This content could carry both metro and hyperlocal advertising sold by and benefiting both sites. It is in the NNO’s interest to help these bloggers succeed. Thus they should collaborate on creating and distributing everything from news to calendars to functionality.
In the link economy, value is created by he who creates content and she who delivers audience. So in this networked ecosystem, large players and small will find ways to mutually create and share in more value.
* The embeddable paper. Once you embrace hyperdistribution, then you’ll find new and simple ways to get readers to become distributors. In this post I suggested that we should enable any content to be placed in YouTube-like players that carry brand, advertising, states, and links.
Lo and behold, Silicon Alley Insider just made it possible to embed its stories on this blog or anywhere. In fact, you don’t need to follow that link above; you can read the story below (and I imagine it won’t be long before there’s an ad there, along with the Insider’s branding, links, and data collection).
* API The New York Times has an API (application programming interface) enabling developers to incorporate its headlines, driving traffic to NYTimes.com. NPR and the BBC have APIs that enable others to use more content; as public broadcasters, their goal is simply broader distribution. The Guardian’s API offers full content but requires developers to join its ad network. Thus the Guardian wants to get its journalism into the fabric of the web, as they put it, and support it at the same time. Fingers crossed that it works.
* Specialization. One-size-fits-all news was a product of our means of production and distribution and a very small number of topics aside, that just won’t cut it anymore. Whether by geography, interest, or community, news must become far more specialized. In the link economy, this is how content rises in search to be discovered and it is how value is added with advertising.
Specialization sounds like a way to decrease, not increase audience but with the efficiencies specialization enables, many more publics can be served more deeply and each is bound to be more engaged. In our New Business Models for News projections, we ended up – to our surprise – with an equivalent number of journalists working in our hypothetical ecosystem when compared with the legacy newsroom, but these journalists were all covering much more specialized topics in much greater depth, creating more journalism for more communities than before. Specialization becomes a way to grow.
* Social engagement. In our NewBizNews models, we projected 12 page views per user per month because this is in line with existing news sites and thus, a conservative assumption. But it’s also a shameful assumption.
Local news networks that are truly a part of communities – owned and operated by their communities – will surely have much higher engagement. The fact that Facebook – which brings communities elegant organization, just as newspapers endeavor to do – gets hundreds of pageviews per month per user should be a lesson and model for news networks.
If news organizations – pardon me – asked what Google, Facebook, Twitter, and craigslist would do, they would define themselves as platforms more than content creators and controllers. They would act as networks rather than destinations. Once again, this gives them not only distribution and engagement but efficiency.
I have stood in and before no end of conferences when I or someone else recalls what that student said in The New York Times said a year ago: “If the news is that important, it will find me.” Waiting for her to come to our site won’t work – and it especially won’t work if, once a peer links her to our site, she finds a wall. No, we have to take news to her.
At Aspen, Google’s Marissa Mayer told the assembled news machers that they have to find ways to insinuate their content and value into our own hyperpersonal news streams. In other words: This ain’t about getting people to come to your home pages anymore.
You can bet if Mayer is thinking this way, so is Google and so it will find ways to consolidate information about sources across these new means of distribution. It’s still in Google’s interest to tap the tree for Googlejuice. So I say we cannot waste a moment finding more ways to get more people to distribute and engage with news.
* A hyperlocal blog could set up a feed of your neighbors’ tweets all around town.
* Over time, the geoTwitter enables what I’ve been thinking of as the annotation layer atop the real world: diners create simple reviews of a restaurant simply around location, anyone annotating any location.
* I wonder about the commercial applications: subscribing to tweet ads near me.
The live web, the social web, and the geo web come together.
Now there are caveats aplenty. Foursquare is similar and hasn’t yet burned up the world and neither has Google Latitude. Laptops need geolocation. There are privacy concerns that may stop people from switching on geolocation (the default is off). There are dangers; geolocation could have made tweets from Iran more credible but also more perilous for the authors. I wonder why Twitter is choosing to erase geo data after time; this diminishes the value of the annotation layer.
But still, a simple API like this can make the mind spin. Now combine geoTwitter with my recent obsession, Google Wave, and imagine how live and collaborative content can be enhanced with geography. Or add geography to Marissa Mayer’s vision of the hyperpersonal news stream. The possibilities are endless.