The journalism bubble

When I decided to go into the news business, we took a vow of poverty, or at least acknowledged that we’d never be rich. I chose not to go to law school and instead transferred to j-school and did so in the full awareness that I’d never be well-paid.

Wrong. I ended up being very well-paid because I worked in news in the last gasp of its century-longer monopoly bubble, which ironically came to a climax at the same time as the short-lived tech bubble. Before 2001, metro newspapers still made tens of millions of dollars in each of the classifieds categories, plus retail, plus circulation revenue. Magazines were still blockbuster businesses worth risking tens, even hundreds of millions of dollars to launch. TV will still a star medium where so-called talent was worth big money.

Journalists ended up with a severely inflated view of their own value. It was a bubble that has now burst. That is why they are barking so loudly against the wind of change. Change isn’t just taking away jobs, it’s taking away great jobs: visible, self-important, well-paying, once-secure. Damnit, it’s ruining a good thing.

Media economist Robert Picard poked a pin to that bubble – after it was deflated; this is a case of kicking them when they’re down – as he argued in the Christian Science Monitor and in an Oxford speech that journalists deserve low pay because they don’t add sufficient value. Picard says, and he’s right, that journalists spend too much effort churning our commodity value: the stuff we already know, the same stuff others are making:

Well-paying employment requires that workers possess unique skills, abilities, and knowledge. It also requires that the labor must be non-commoditized. Unfortunately, journalistic labor has become commoditized. Most journalists share the same skills sets and the same approaches to stories, seek out the same sources, ask similar questions, and produce relatively similar stories….

Across the news industry, processes and procedures for news gathering are guided by standardized news values, producing standardized stories in standardized formats that are presented in standardized styles. The result is extraordinary sameness and minimal differentiation.

It is clear that journalists do not want to be in the contemporary labor market, much less the highly competitive information market. They prefer to justify the value they create in the moral philosophy terms of instrumental value. Most believe that what they do is so intrinsically good and that they should be compensated to do it even if it doesn’t produce revenue.

So where’s the value? Gawker friend Nick Denton says it’s in reporting. So does Arianna Huffington, who just today hired away the head of investigations from the Washington Post to head her new investigative unit. Arianna has said for sometime that she’s hiring reporters because their stories get more traffic. Denton told Ad Age:

People — particularly if they’re under 40 — have news priorities other than those of the editors of The New York Times or producers of the “NBC Nightly News.” A new tablet from Apple — or last night’s episode of “Gossip Girl” or the adventures of the hipster grifter — is a bigger deal than the latest petty scandal in Albany. You think that’s a damning indictment of modern society and a recipe for idiocracy? Fine. Start a nonprofit to cover all the local-government news you think a healthy society needs. But don’t expect advertisers — or commercially-minded publishers or readers, for that matter — to share your interests. . . .

When Gawker started, there was a surfeit of information and not nearly enough context — so we provided that, in the form of links and occasionally snarky commentary. But now the balance has shifted. There are pointers to articles on the blogs, Facebook, Twitter, Digg. And all these intermediaries are looking for something to link to. If a good exclusive used to provide 10 times the traffic of a standard regurgitated blog post, now it garners a hundred times as much. That should be reassuring to people. The content market is finding its new balance. Original reporting will be rewarded.

So how can journalists create value? They can and should report – but the link economy demands that they specialize, that they stand out above the level playing field by reporting uniquely: Tell us something we don’t know, something we want and need to know, not what we already know.

Picard thinks that local newspapers can specialize and there we agree, but we disagree about the topics; he says they should take on national and international topics – Dallas on energy, Chicago on aircraft, Des Moines on ag – but I think their strength is in being local. And there I disagree, too, with Denton; I think that some advertisers – new advertisers never served by bit and inefficient papers – will care greatly about local and will end up helping to support the work that serves local customers (I spoke with one such advertiser today; more on that later).

Picard says that papers need to learn to collaborate and there, too, I agree; but he says they need to do it “throughout news enterprises” but I say they need to do it outside news enterprises, supporting and enabling networks and distributed ecosystems of news.

Picard says that journalists “need to acquire entrepreneurial and innovation skills that makes it possible for them to lead change rather than merely respond to it.” There we certainly agree; that’s why I’m running a course in entrepreneurial journalism. But I wonder whether, inherent in what he says, is that it’s too late for entrepreneurship from inside legacy institutions; it has to come from without.

But the bottom line is the bottom line: Journalists need to make an honest and harsh accounting of the value they create before they can worry about what they’re being paid and by whom. They can no longer use bubble accounting, when they convinced themselves that they and their high calling were worth their inflated paychecks (and I was among those who got them) without facing the blunt truth of the market. Now they have no choice but to face their market.

: LATER: I meant to add this yesterday: Of course, I’m all in favor of journalists making as much as they can and of as many journalists as possible being sustained by the business. That’s why I run the course in entrepreneurial journalism and why one of our tasks in the New Business Models for News Project is to find ways to maximize revenue and profit for journalists in optimal business plans.

But the standard of success may not be the pay rates that we became accustomed to in the journalism bubble. We may – I hope we don’t, but at first we certainly will – end up back in the early days of my career when we didn’t get rich reporting. Especially starting businesses, we need to recognize that it’s going to be tough and we’ll be subject to what the market will bear.

Already, though, there are hopeful excceptions: Michael Arrington and Rafat Ali built substantial empires on reporting. there is a high-end to aspire to and I hope many reach it. But as in all start-ups and all upheaval, it’s going to be hard work getting there.