Cheap beer, expensive bottles

Cheap beer, expensive bottles

: Glenn Reynolds looks at all the whither-the-news-business talk yesterday, inspired by the latest study on the topic, and concludes:

Back during the 1970s, a lot of big American beer makers — Schlitz is the most famous example — cut their quality to save money. They did so in tiny steps, each imperceptible on its own, but the eventual result was that a lot of people suddenly woke up and said “this beer’s no good anymore.” (What made things worse for them was that they were cutting quality just as consumers started caring more about it.) Beer drinkers went off in search of other brews, and some of those brands disappeared from the shelves.

It seems to me that the news business has the same problem. They’ve been cutting reporting budgets and foreign bureaus, relying more on news services and “filler” material, and tolerating a much higher degree of bias and general sloppiness in reporting, just as their audience has learned to tell the difference between good and bad journalism. The result is that a lot of people think their beer’s no good any more.

I remember when Schlitz tried to address this problem with a new Master Brewer and the slogan “taste my Schlitz.” It didn’t work for them. Now, a generation later, they’re trying to make a comeback with a better product, and the hope that consumers have forgotten the watery and unsatisfying taste of the old one. Will the news business have to wait as long? And can it?

: But Glenn, I bet you couldn’t find a newspaper editor or TV news director in the country who would not join in your chorus of complaint about lowered news budgets.

The problem is revenue. The Internet has created tons of new competition not just for news but, more importantly, also for revenue: Monster, Craig’s List, companies’ own sites. At the same time, Walmart — and Amazon — have had a big impact on local retail and thus local advertising. So, looking at this from the business perspective — and, yes, this is a business or it’s dead — the answer, clearly, is not to keep throwing more money (you don’t have) into news budgets.

Instead, what I see through the lense of this new medium is the need to redefine the news business.

First, we have to admit that most news is a commodity and, thus, it’s not worth wasting money on what everybody else has anyway. That’s especially easy to fix in the TV news business: Everybody doesn’t need a camera at the press conference; they can share the image. Everybody doesn’t need to cover the same events; you can get it off the wire. News organizations need to be able to concentrate instead of what makes them uniquely valuable to their audiences. And that’s not necessarily what wins awards; sometimes it’s simply the best citizen service.

Second, we have to admit that many people get their news elsewhere (on the Internet, on TV, even from comedy shows now) and some people dont’ give a damn about the news and you can’t make them give a damn no matter how hard you try. So that means we need to look at what the best news products are for our audiences — and sometimes, they won’t include news. You may get home from the office fully informed about the world thanks to stealing time from the boss and reading the Internet and so what you really want is a kickass sports show or a great entertainment paper. That’s news, too, if it tells you want you want to know.

Third, we have to look at new sources of news and information — emphasis on information. That is where citizens’ media comes in. The people have tons of information; they are the real source. Now we have the tools to harnass that. (Insert spiel about the people now having a printing press thanks to weblogs et al here.) So we need to investigate and build a new relationship with the people formerly known as the audience and find ways to help them share information; that is a new and important role for news organizations if they can figure it out.

Fourth, we need to recognize that though reporting usually requires special resources and sometimes requires special skills, commentary and opinion require neither and anybody can — and should — do it. Thus, thanks to those same everybody-has-the-power-of-the-printing-press tools, we can open the news business up a tremendous new diversity of opinion and viewpoint from the citizens.

So we create a new relationship with the audience with new kinds of service and new expectations… and, necessarily, lower costs. That’s what I hope this new medium not only necessitates but enables.

: See also this Rob Enderle column on the Mediamorphisis confab last week. He ends up concluding that a merger of news organizations and bloggers can create a generation of superbloggers. If I understand what he’s saying, I think I disagree. The power of bloggers is that we are distributed; we are; we don’t need to be super.

13 responses to “Cheap beer, expensive bottles”

  1. Ric Locke Avatar
    Ric Locke

    The possibility I dream about is when everybody either has a blog or regularly contributes to one.
    When something happens, somebody steps outside his front door, snaps a picture, and posts it. Yes, that’s ‘way too simplistic, but it conveys the idea.
    The bloggers then become filters and sorters. Editors, if you will.
    There will still be a need for professional journalism; not everything happens outside somebody’s front door. But it’ll be a niche, not an industry. I’m sure that scares the current media, but then Ford scared the Hell out of both buggy makers and custom car builders. We still have both, but they’re niches.
    Regards,
    Ric

  2. Lex Avatar

    The issue isn’t just revenue, it’s the whole damn business model. Newspapers got used to profit margins much higher than that of American industry in general. They did that partly because of the high barriers to entry ($15M for a press just for starters), partly because capital-intensive businesses require a higher rate of return than others, and partly because they got used to being monopolies in most cases.
    Now, the price of entry is a Sun server and a T1 line. Therefore, like it or not, pretax profit margins of 28, 35, 40 percent are no longer supportable. Industries in the news bidness (including broadcasting) have two choices: gracefully manage the decline in margins to a more supportable level, in part by reinvesting in the product, or try to prop up the margins artificially, which inevitably will lead to crash and burn.

  3. David Crisp Avatar

    What Lex said. The changes that now are apparent to everybody have been on the horizon for a long, long time, and many of us in this business have been saying for years that news companies had to start investing in quality before it was too late. Instead, as late as the 1990s, every major high-tech company was spending more on r&d every year than the entire news business was spending (OK, I heard that at a seminar somewhere and can’t prove it; just trust me). Instead of doing research and expanding news staffs, newspapers were cutting staff and hiking ad rates to prop up artificially high profit margins. While the number of media outlets was exploding in the ’90s, the number of actual newsroom employees was declining. This was an unsustainable long-term strategy, but it produced a few nice fiscal quarters along the way.
    Of course, it’s worth noting that when most people say they get their news from the internet, they really mean that they are getting their news from the same big media companies they scorn. They just aren’t paying for it, and they may be filtering it through a favorite blogger or two.

  4. mrsizer Avatar

    My local paper, the Denver Post, is, I think, trying your model of commoditized news. Almost everything in it is either an ad or from the AP wire. There is some local reporting, but the quality is appalling.
    I cut back to Sunday only then to nothing – it simply wasn’t worth getting five pounds of paper to read two or three badly written local pieces that were not only the top stories on the local evening news but provided no more depth – despite the inordinate size of the paper.
    I pay a lot more for the WSJ because of its depth and breadth but I’m way out of their target advertising market – no time-share jets for me. They have quality-with-a-name: Depth (and spellcheckers and editors). The lack of phonebook sized inserts of grocery store coupons helps, too.
    TV news is probably going to die. It seems to have split into three camps: Unedited, deadly dull raw footage (CSPAN and local equivalents), sound-bite driven catastrophe coverage (network news), and screaming talking heads (who don’t let each other complete sentences, let alone a coherent thought). None of them are worth the effort of watching.

  5. triticale Avatar

    Relative to Ric’s analogy about Henry Ford’s impact, it is worth noting that Studebaker had been making wagons for 60 years before Ford came along, and automobiles for 60 years after, and that Le Baron and Vanden Plas were custom builders before they became brand names.

  6. Insufficiently Sensitive Avatar
    Insufficiently Sensitive

    “Unedited, deadly dull raw footage (CSPAN and local equivalents)”
    Sneer if you want, but that’s actually NEWS and has more value than the abbreviated soundbite stuff the editors put on our screens, minus their selective omissions. That and the blogs are plugging the gap left by the elite media.
    But when is the Associated Press going to be exposed to some merciless illumination of their twisted biases? By default they are filling more and more of our papers. Who will accurately map their filters and publicly complain?

  7. Joe Peden Avatar
    Joe Peden

    Anybody who is just now realizing that “Big Media” does not favor quality has been lost in Space for a good while. “Public TV” was going to be my remedy in 1967. Then it did not deliver, though KQED, in San Francisco, tried valiantly to save something of the promise with its hour long report of News, an excellent production, which expired when the decision was made to cut it to 1/2 hour in 1972. Then we were left with Sesame Street.
    Now we have the “Rocket Bunnies” or the “Dalliancing Dildos” or whatever they are called: Is it the “Tela Tubbies”? I did sit mesmerized by them parading accross the screen one early morning wondering, “Why the hell do they only say ‘Oh’?” [I was kind of trapped by my circumstances, which led me to the Tubbies.]
    Now,advertising will pay for advertising, which can then pay for news at no other cost to the consumer. We have seen this happen. Another great example of this phenomenon is the “Riverfront Times” in St.Louis, which does not have much “news”, but which gives some in depth reporting on some issues, as did KQED. The adverisements are very good. I have never read advertisements before. I also call their articles, “News”.
    On the contrary, the “Local News” on TV in St.L., which is also free, is woeful, except as compared to other Local News in different areas, such as Portland, Or.. There we have exactly nothing, as is nearly the case in Boise, Id..
    In Lewiston, Id., in 1978, there was a great news program, where the newscasters simply read the news as printed before them on their desks. There was none of this, “I love you, you love me, reparte’”. Then they took Dee Sarton out of there and put her in Boise. It was downhill ever since.
    Brian Williams is going to replace Tom Brokaw. This will also be a downslide for him. But if he wishes to sacrifice quality for quantity, that’s his business.
    You Bloggers out there know you will be judged in some fashion by everyone. Then you will find out who your friends are. Forget about getting rich. You are rich. You are The Passion.

  8. ralph phealn Avatar
    ralph phealn

    “Newspapers got used to profit margins much higher than that of American industry in general… partly because they got used to being monopolies in most cases.”
    Let’s not ignore the fact that they also got used to being able to get away with chronic egregious bias. If anything that’s an even bigger issue – note that Fox is managing to make quite a bit of money in the “Old Media” world just by breaking the Liberal monopoly and serving the approximately 50% of the market that’s been ignored for decades.

  9. JorgXMcKie Avatar
    JorgXMcKie

    You know, I might watch local tv news, if most of it was, well, news. I get endless teasers for stories that are usually half-done at best. I even timed one, once, and found more time spent on the teasers than the story. Duh. Also, why does every story have to be reported from outside? What the hell difference does it make? Evidently they think I’m as stupid and ignorantly easy to lead as they must be, since they’re uniform in their idiocy.
    And don’t get me started on local newspapers. Just don’t.

  10. Greg D Avatar

    Sorry Jeff, but you’re wrong.
    “Lack of revenue” doesn’t force editors to put a constant left-wing slant on the news. It doesn’t force them to lie and pretend they’re “objective”. It doesn’t force them to let people like MoDo get away with lying in her “opinion” columns, and it doesn’t force them to publish opinion columns on the front page masquerading as news.
    You’re right, “new media” is killing the “old media”. But it’s not killing them by harming their revenue model – it’s killing them by giving people other sources of information that are easily accessible, and that and that point out the constant bias and dishonesty of the old media.
    Thus people abandon the lying sacks of sh!t, and thus their revenue goes to hell.
    Show me a hurting news company that always treats the NRA and HCI the same, that gives the National Right to Life organization the same respect it gives Planned Parenthood or NAARL, one that treats press releases from the Center for Science in the Public Interest with the same suspicion it shows to press releases from a major Pharma, and we’ll talk.
    But until you can show me an honest news company that’s suffering, your point doesn’t hold.

  11. Franky Avatar

    I think Jeff’s making a large error here, something I’ve seen in other parts of the blogosphere. The blogosphere wouldn’t exist without the news organizations. They would be dissecting thin air. No one would know how anything’s going in Iraq (that’s unless you’re prepared to read through 50 Iraqi bloggers just to get a gist of the news each day, now multiply that by all the topics that interest you).
    I also think that the idea of concentrating all coverage of a white house press conference into one report from a wire is equally dangerous. I like to read different accounts of a speech, that choose to make their own emphasis. And having worked in the wires, I know that competition makes you better.
    The old-style media may be dying, but I for one can’t see any reason to break out the champagne for such an outcome.

  12. Mike Avatar

    I’ve been working in TV news since 1978, in production and engineering at networks and big-city stations.
    I noticed changes beginning to creep in about 1984. Financial and accounting people became bigger players in the companies about then, with increasing realization that the news could make bucks, not merely be a loss-leader for prestige sake.
    The trend picked up speed with the sales of ABC, NBC and CBS to cost-conscious buyers. Soon it was all about cost-cutting, layoffs, consolidation and synergy. At first, the cheapening of news, the replacement of news people with anchors, reporters and producers who know something with the cheapest young people possible had little effect on ratings. After all, everyone else was doing it too.
    I was in room at NBC once when Bob Wright, the CEO visited. He told us, a group of engineers aged about 34 to 60, that NBC no longer wanted and couldn’t afford employees with 10 years experience or more. He wanted the NBC of the future staffed with recent college grads who would stay 2-3 years and move on, like at CNN. This kind of hiring is pretty common in newsrooms now, as far as I can tell.
    I think the networks are riding the news gravy train as long as it lasts, extending their run by cutting quality. And when the run is over, news will probably go away.
    On the plus side, blogs are great. I think this is the first time since the advent of mass communications that individuals can routinely challenge the power of mass media, without the media’s consent. Every day, it gets harder for the powerful to manipulate the public through unchallenged mass media. That’s great for the individual!

  13. S. Lewis Avatar
    S. Lewis

    Did somebody actually get paid for the slogan “taste my Schlitz” ?
    How soon after were they fired?