Posts about newspapers

Statement to the Judiciary Subcommittee on Antitrust

March 12, 2021 by Jeff Jarvis
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I was called about possibly testifying to a hearing of the House Judiciary Subcommittee on Antitrust regarding technology companies. That’s not happening but I decided to submit a statement to the committee. Here, minus my bio, is what I have to say:

Statement to the Subcommittee:

I write to the committee to express my concern about often well-intentioned but ill-conceived internet regulation, which could have deleterious effects on freedom of expression; which tends to protect incumbent media and technology companies at the expense of innovation and competition; and whose unintended consequence is frequently to grant internet platforms yet greater power. It is worthwhile to examine the effects of internet regulation elsewhere as it is debated here.

Consider, for example, Australia’s media code. The net result, according to the news site Crikey, is that the country’s existing media duopoly of News Corp. and the Nine Network will receive 90 percent of the money being paid by Google and Facebook, both of which are now in the position to decide which news organizations should receive support. Small news startups that might compete with the powerful incumbents receive no protection or support in the law. The Australian code amounts to a link tax — for those companies that link to news are required to pay for news — and Sir Tim Berners-Lee, inventor of the web, testified to Australian legislators that such a precedent would “make the web unworkable around the world.” It would break the internet. I regret that in the end, Google and Facebook succumbed to what I see as corporate and political blackmail.

In Europe, various changes to copyright law — Germany’s Leistungsschutzrecht, Spain’s link tax, the EU’s Articles 15 and 17 of the its Directive on Copyright — amount to regulatory capture, for the large internet companies can afford compliance but I have spoken with smaller competitors for whom the expense and effort are crippling. Germany’s NetzDG hate-speech law requires Facebook to decide — in a private company rather than an open courtroom — what speech is manifestly illegal. Europe’s Right to be Forgotten court decision puts Google in the position of deciding what speech should be remembered or forgotten. The UK is considering regulation that would require platforms to take down “legal but harmful speech.”

Online speech is imperiled in many quarters. In Italy, Facebook was forced to reinstate a site for a neo-fascist group. Poland has announced a new law that would require platforms to carry all legal speech, a nightmare that would protect the worst of the net. I would remind us that compelled speech is not free speech. In addition, Singapore instituted a fake-news law, which puts internet companies in the unwanted position of being arbiters of truth. Similarly, India is enacting regulation that would require platforms to take down speech that is false or threatens national unity.

In the United States, Google’s recent announcement that it will forego ad targeting on the web based on third-party data was applauded by privacy advocates who have demonized web cookies as so-called “surveillance capitalism.” But this again amounts to regulatory capture as Google itself has plentiful first-party data about consumer behavior as well as the resources and technical means to innovate in advertising. Incumbent publishers, on the other hand, are stuck without their own first-party data or innovation. I know this because in my university center, I spent years trying to convince publishers to change their product and business strategies to prepare for this day. They generally insisted on relying on their dying print businesses and on third-party ad networks online, and now they are retreating behind paywalls. As a result, just when we need it most, reliable news is becoming a product for the privileged few who can afford it. According to Oxford’s Reuters Institute, only 20 percent of Americans pay for online news and it is a winner-take-all market with most people paying for only one subscription for news — almost two thirds of subscriptions go to just three publishers: The New York Times, The Washington Post, and Rupert Murdoch’s News Corp.

Note well that most local newspaper companies in the United States are now controlled by hedge funds, which are not inclined to invest in innovation and which, by their nature, tend to sell assets and draw cash out of these enterprises. If there ever were an attempt to enact an Australia-like law here — if it could overcome clear First Amendment objections — any money resulting from it would end up in the balance sheets of hedge-fund owners and would benefit neither journalism nor innovation at legacy, local news companies.

Thus to grant newspaper owners an exemption from antitrust, as has been discussed, would be profoundly anti-competitive, for it would — as in Australia — entrench the interests of the largest companies on both sides of the table, media and technology.

Similarly, I argue that breaking up major technology companies is an emotional response to the discussion of technology and power. It would not meet the test of rectifying consumer harm, for users benefit tremendously from free, open, and inexpensive services. Also, there is considerable competition; note Microsoft’s role in this debate.

Instead, in both industries — technology and media — the best cure for concerns about size is to encourage and support entrepreneurship and new competition. In my university, I started a first-of-its-kind program in entrepreneurial journalism to teach journalists to do just that. I hope next to turn my attention to internet studies, to foster the design and creation of a next generation of the net: one built not just to speak but to listen, one designed to build bridges rather than battlements, one that protects the benefits of today’s historically unprecedented opportunity to hear voices too long not heard in mass media. There is much work to be done and much opportunity to create competitors to the present proprietors of the net and media. This is where we should focus our attention in policy.

The net is yet young. We don’t fully know what it is and may not for generations, even centuries. Note that the first newspaper was not published until a century and a half after Gutenberg introduced movable type. In my research for a book on the end of the Gutenberg age, I have learned much about the reaction to the introduction of printing. After initial and brief utopian glee at its prospects, authorities worried greatly about print’s power to spread the fake news of the day, to cause unrest (the Reformation and the Thirty Years’ War), and to disrupt institutions. I have also learned that governments’ attempts to control printing and thus speech largely failed. In a prescient 1998 paper for the RAND Corporation, “The Information Age and the Printing Press: Looking Backward to See Ahead,” James Dewar argued persuasively for “a) keeping the Internet unregulated, and b) taking a much more experimental approach to information policy. Societies who regulated the printing press suffered and continue to suffer today in comparison with those who didn’t.”

In what I have said here, it might sound as if I oppose all internet regulation. I do not. I worked for more than a year with a Transatlantic High-Level Working Group on Content Moderation Online and Freedom of Expression, convened by former FCC Commissioner Susan Ness under the auspices of the Universities of Pennsylvania and Amsterdam. The group included many experts and luminaries, such as former Secretary of Homeland Security Michael Chertoff, former Ambassador Eileen Donahoe, former Estonian President Toomas Ilves, and former members of the European Parliament Marietje Schaake and Erika Mann. Our report recommended a flexible framework for internet regulation based on transparency as the basis of accountability as well as the establishment of e-courts to rule on matters of legality where that should occur, in public and in court.

To put this in my terms, I have long argued that both technology and media companies should make covenants of mutual obligation with their users and the public — not just rules for users but promises from the companies for what we may expect of them in building useful, respectful, and productive services and environments. In the model of the Federal Trade Commission, I would favor requiring them to provide data about their implementation and impact so as to hold them accountable to their promises. I also hope for a multistakeholder forum — of technologists, lawmakers, regulators, civil society, academics, and users — to grapple with new and unforeseeable problems, such as pandemics, and to exploit new opportunities.

Internet regulation should not be about punishing power or success but instead about creating the means to work together for a better internet, a better society, a better future.

Stop. Stop the presses.

February 3, 2020 by Jeff Jarvis
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At the end of an exceptional first week for our new program in News Innovation and Leadership at the Newmark J-school, the students — five managing editors, a VP, a CEO, and many directors among them — said they learned much from teachers and speakers, yes, but the greatest value likely came from each other, from the candid lessons they all shared.

When I first proposed this program about four years ago, I suggested it should offer a smorgasbord of courses to be taken at will. Then I was fortunate enough to recruit Anita Zielina, the ideal news executive, to create and run it. She said (nicely) that I was wrong and that the program had to revolve around a tight cohort of students sharing their education together. She was so right. This week, I watched this group build trust, respect, and empathy — and a common store of knowledge and insight … as well as exasperation.

Next Saturday in Philadelphia, the Tow-Knight Center at Newmark, will take part in the first meeting of an international gathering of product leaders in the news business. Our involvement grows out of one of a handful of communities of practice my colleague Hal Straus has been running for a few years, bringing top product, audience, commerce, and talent-and-inclusion executives in New York together to share — and sympathize — with each other. Aron Pilhofer at Temple and Damon Kiesow at Mizzou generously offered to include us in a collaboration to build a national product organization whose aim is to answer the question, “How do we make news organizations more audience-oriented, data-driven, and product-focused?” In short, how do we save the news business?

These people — like the Social Journalism students I wrote about so proudly last month— are our innovators. They will be our leaders. But they are frustrated by the state of the business and, of course, now and then by their bosses. They see the imperative for change; they have ideas; they are eager to run. But where? What frustrates them — and, in fairness, their bosses — is that the solutions are not evident and thus finding them requires risk, experimentation, failure, and investment of capital we do not have, capital we can acquire these days only from others who bring their own goals and agendas. Does this mean it may require letting some institutions burn to the ground so a radically new journalism can be built from the ashes?

I’ve been doing a lot of reading lately about Gutenberg and the birth and long progress of printing toward its eclipse in our age of digital data and connectivity. And so this morning I came across an article by Otto Fuhrmann, a book and Gutenberg historian and former director of graphic arts at NYU, in the 1926 edition of the Gutenberg Gesellschaft Jahrbuch (Gutenberg Society Yearbook). He wrote about the New York Club of Printing House Craftsmen in a lovely evocation on the value of sharing in our field, which we used to call printing.

“The times are not so far distant when every foreman or executive jealously guarded his technical ‘secrets’, in the mistaken idea that by doing so he would make himself indispensable to his employer,” Fuhrmann writes.

So it was quite natural that the younger element should find out that a business can be run without secrecy, as long as the essential facts are recognized and dealt with. A friend working in a competitor’s shop did not cease to be a friend just because his employer did not like the other employer. And the men [sic*] who had the same or similar problems to meet in the actual running of their employers’ businesses found that an exchange of views and ideas benefitted them without hurting their employers.

It is true that employers first frowned upon the very idea to have their foremen meet other foremen…. However this prejudice is gradually disappearing, in the same measure as the spirit of cooperation and fair dealing, instead of the old method of slamming a competitor, is growing. Naturally, a large city like New York was the best place in which to inaugurate the craftsman idea, and it succeeded as it deserved.

Indeed.

Fuhrmann attributes its success in part to “a gradual change in business ethics that has taken place in the last 15 years.”

This change is signified by the word “service”. It meant, fundamentally, a complete change from the old standpoint of the producer or seller that the customer had to take the goods as they were offered, or do without them. The technique of advertising became more refined, and instead of forcing goods on an unwilling customer it became a fine art, all over the business world, to find out what a customer wanted and to satisfy his desires…. Developed to the n-th degree, “service” today often means anticipating the client’s wishes…

There is nothing new. I have been arguing for years that we should see journalism not as the manufacture of a commodity — content — but instead as a service. Here is Fuhrmann in 1926 arguing the same for printing. And that is the argument made by product people (though I’ll contend that their self-anointed label is a misnomer, for their craft is all about understanding customers’ needs and desires so as to serve them; they don’t make products so much as they serve people).

Fuhrmann notes that he is writing about his craft in a time of deep disruption. The Linotype had been patented only 40 years before. Rotary presses and dry stereotyping came about the same time. Paper made from pulp came not long before. Thus the business of publishing changed greatly, becoming a mass medium. In the shop, all these technologies spread and robbed the craftsman — whose heritage was in centuries of hand composition and hand presses — of their sense of control of their art.

The increasing mechanization tended to lower the skill and to narrow the range of the individuals in the printing business. It came to the point where specialization made it hard to find good all-around craftsmen. So it can be seen that the time was ripe and the background prepared for an attempt to bring the essential factors in our industry together for frank discussion and study of their problems.

What was needed, says Fuhrmann, was for executives to have a full understanding of every technology of the industry — “he must know enough about paper, engraving, electros, binding and finishing processes” — and perspectives from other fields. “That calls for real men of no mean calibre; and, of course, the man with the greatest fund of knowledge and resourcefulness will be the most successful one.”

And so, the club. According to Fuhrmann, monthly meetings began with dinner and entertainment to provide “a good antidote against the tension and the strain of business work and furnish a background for good-fellowship.” The building of a cohort, in our modern tongue. “We particularly lay stress upon the educational feature,” with guests and lectures. And they had an annual dinner dance. (There’ll be no dancing in Philadelphia.) The club, together with other trade associations — the New York Employing Printers’ Association and the Typographical Union — operated well-equipped schools for compositors’ apprentices and “a training course for foremen in the science of modern business management,” with employers “glad to pay the entire amount of tuition, knowing that the benefit to the foremen would ultimately redound to the firm many times over.”

And so, we attempt the same today in our rapidly changing field with meetings and communities of practice and training of journalists and managers. The difference is that from 1926, printing qua printing grew, tremendously so. Its methods and means changed significantly, which had considerable impact on the product and the profession. But it was still printing.

Today, we are leaving the business of printing and text, of content and publication, even of authoring and storytelling. But, let’s be honest, we still refuse to admit it. So the solutions talked about in classes and conferences are all incremental, aimed at getting bosses and boards to allow us to change what we have done enough to keep doing it, to save what we knew rather than start on what we don’t yet know.

Stop. Stop the presses.

The death of the newspaper has been often foretold. Yes, they are still around us. But I must ask to my Twitter peril, are they better off dead than in the hands of hedgies who milk every last drop of ink, sweat, and blood from the end of the diminishing tribe of (pardon me) craftsmen of our field? Are we better off if they die so newspapers and magazines and broadcast channels are not reinvented but journalism can be?

I take full blame myself for not being radical enough in seeking new definitions of journalism. But even that confession is hubristic. For perhaps these definitions are not new but only new to us. Perhaps they should come from other fields — anthropology, neuroscience, psychology, sociology, design, philosophy — to help us envision an entirely new service to the public and its conversation. We who have the luxury and privilege of time and salary in universities should reach out to other fields to seek new expressions of society’s goals and problems and new ways to meet them using the new tools at hand.

So when all the young leaders we are gathering above who are eager to run and ask “where?” we should be ready not with answers, for we do not have them, but with audacious suggestions: Try here, try there. Try using the tools of the net and data and listen to the public we serve in new ways. Try understanding how people make decisions individually and together (even against their self-interest) and how to improve what they decide. Try listening to, valuing, and serving the people and communities who were long ignored and left unserved by our old industry, mass media. Try using the tools of connectivity to enhance the public conversation. Try new measures of value based not on our products but on how we help people improve their communities and lives.

And when they try and fail — as they must — we should offer support, convincing their bosses and boards or new funders that there is promise in this direction or that, but only if we explore. Along this journey — which I believe will be long, generations or even centuries long — we need to provide the means to bring together these brave new leaders not just to teach them what we know (so they may challenge it) but also to enable them to teach each other, to share.

* I will apologize for the sexist language of the period and then leave it unchanged and unremarked upon as it presents a picture of a past.

I, for one, welcome our new newsstand

May 13, 2015 by Jeff Jarvis
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newsstand

Facebook just gave publishers almost what I was wishing for. It is enabling news companies to go to readers where they are (we used to call that home delivery), embedding their articles, photos, videos — and ads — in users’ streams of attention and keeping all the revenue they sell or a share of the ad revenue Facebook sells. They call it Instant Articles because it saves users the time of clicking on links and waiting for web pages to load. It’s a start, a good start.

I wish that Facebook would also work to share data about users at their option so news companies could serve those users with greater relevance and value and learn to build relationships with the public as individuals and communities rather than as a mass. Here, I suggest how that could happen. For now, Facebook is allowing publishers to track some usage data. One thing at a time.

In Facebook’s blog post announcing the deal, its chief product officer, Chris Cox, says: “Fundamentally, this is a tool that enables publishers to provide a better experience for their readers on Facebook. Instant Articles lets them deliver fast, interactive articles while maintaining control of their content and business models.”

The post continues: “Along with a faster experience, Instant Articles introduces a suite of interactive features that allow publishers to bring their stories to life in new ways. Zoom in and explore high-resolution photos by tilting your phone. Watch auto-play videos come alive as you scroll through stories. Explore interactive maps, listen to audio captions, and even like and comment on individual parts of an article in-line.”

I await much gnashing of teeth over the deal. Actually, I don’t have to wait. My Twitter feed was peppered yesterday with fretting over Facebook and news, for example:

Sigh. What are we supposed to do: ignore the audience on Facebook, stomp our little feet, and take our balls and go home, expecting users to always follow us to our home pages? Last week, I had this discussion with my students, trying to get them to focus on the business terms of a negotiation with Facebook over embedded content. It was hard to get some of them past typical media emotions: not liking or trusting Facebook, worrying about rugs being pulled out in the future. These are deal points that can be negotiated. And at least Facebook wants to negotiate.

Indeed, at last, both Google and Facebook are ready to talk. Two weeks ago, Google signed a friendship pact with eight European publishers. Now Facebook has made its deal with nine — take that, Google! — publishers, not just in squeaky-wheel Europe but also in America: The New York Times, National Geographic, BuzzFeed, NBC, The Atlantic, The Guardian, BBC, Spiegel, and Bild. Note that the last one, Bild, is owned by Axel Springer, which has led the European war against Google, forcing it — and by extension, Facebook — to come to the table.

This is good news for news. At Facebook, the head of product — which is the center of power at a technology company — has made it clear that news matters to the company. Late last year, Facebook released new products for news media. Meanwhile, Google is promising to develop products with publishers and give grants for innovation and this weekend, it is holding its second Newsgeist summit in Europe (I will be there).

This is only a start. Further negotiation is needed to assure trust and more strategic benefit to news companies. And there is much serious discussion that must be held with these technology companies about their responsibility not to publishers but to society. For now these platforms are taking on the role of not only distributing but even editing the news the public sees. These are not easy questions with easy answers.

If news and technology can come to terms, we can begin to reinvent journalism in a distributed world with new business models. I’ve been suggesting that publishers consider starting new services — and new businesses — inside Facebook if the company will make that feasible. We in media can’t do it all by ourselves anymore. We are no longer monopolies in control of content and distribution from top to bottom. We now live in ecosystems where we must work with others. Get used to it. Find the opportunity in it.

LATER: On Facebook, appropriately, my friend Emily Bell asks five questions about the Facebook deal. OK, I’ll take the quiz:

1. How much revenue will this return to NYT vs its other distribution strategies?

First, given that Facebook allows publishers to place their own ads on their content and keep 100% of that revenue, then on an article-by-article basis, the revenue should be a wash. Except that if the paper recognizes a big bump in incremental circulation, then this is additional revenue. If the paper chooses to let Facebook sell the ad and take a revenue share, then I assume it does so because Facebook can get higher revenue and thus it’s a revenue increase.

But, of course, the value isn’t only in the direct ad sales. It is also in the potential to start a relationship with a new customer leading to other revenue: traffic to and ad revenue from visits to the publisher’s site and, in The Times’ case, subscriptions. This is more unknown. I recently spoke with a publisher who started putting videos on Facebook — no revenue yet — but found that they drastically increase the number of people who follow the publisher there, which, it’s hoped, leads to more business in the long run. We shall see.

All this is why I think it’s vital that we begin calculating the lifetime value of individual users and relationships, so we can calculate all this.

2. Who bears the publishing risk for the pieces FaceBook publishes?

That’s a different question in the U.S. than elsewhere. In the U.S., we are blessed with a First Amendment for digital, Section 230, which gives Facebook safe harbor.

Legalities aside, we know that Facebook does take responsibility for policing content, including that from publishers, according to its community standards [as if there could be one standard for one community in the world — but that’s another discussion]. At the International Journalism Festival in Perugia, there was much discussion of Facebook penalizing the respected Scandinavian paper Berlinkse for photos with nudity appropriate both to its journalism and its culture. This, of course, is disturbing: Facebook as editor; Facebook as censor. This is why, as I suggest above, it is urgent that we have a substantive discussion with and about Facebook — and Google and Twitter — in regard to their roles potentially as gatekeepers. That is why they need to have more sophisticated voices inside their organizations to grapple with these significant issues.

3. How will it change the NYT’s digital journalism given that richer interactive presentations won’t work in this format?

But then again, Facebook is providing new functions appropriate to its platform. We must learn to present news appropriate to platforms, use cases, and user contexts. Katie Couric doesn’t do a thirty-minute show on Snapchat Discover; she delivers what is appropriate there. Same goes for this. The Times and these other publishers should find ways to present news in new ways for new uses.

4. How much data does the NYT get access to from FB?

This is *the* key question. As I made clear above and in earlier posts, I believe we in news *must* get information about our users that enables us to serve them with greater relevance and value and thus to extract greater economic value in return. Now I have heard people from *many* technology companies say in response to this idea that publishers wouldn’t know what to do with that data if they had it. True, tragically true. But therein lies an opportunity for these technologists: teach us in media how to build and serve and extract value from relationships with known individuals; cure us of our mass-media ways … please.

5. How much further is FB likely to go in turning itself from a platform to a publisher? Will it hire editors, other journalists etc?

Facebook, Google, Twitter, et should not and should not want to become publishers, in my view. It creates tremendous channel conflict. It invites antitrust scrutiny. It limits the scope of the content they can present.

That said, I do think that these companies need to import editorial sensibilities — particularly about professional standards and ethics and the issues outlined above. So far, that hasn’t worked terribly well. I do not think that editors should be imported as news cops or consultants. I think they should be integrated into the process of product development, where relevant, to bring a better sense of both the opportunities and the responsibilities.

And while I’m involved in a seminar with my friend, the good Prof. Bell, let me add this from her on Twitter:

My answer: Yes, or we are doomed.

Last weekend in the German magazine Focus, a guest commentator argued that publishers in Google’s friendship pact had made a Faustian deal with the devil. (I’d link to the article but I can’t because, like an riddle in an enigma, it’s trapped inside a paywall inside a PDF.) This professor is essentially urging journalists and publishers to become digital isolationists. I say that is both impossible and irresponsible. The means of production and distribution in media made a small oligopoly of rich and sometimes monopolistic owners sole proprietors of the entire chain of value, from reporting to presentation to production to distribution to sales. Well, my friends, those days are over. Over. Once again, we have no choice but to operate inside the new ecosystem of users’ choice and we have no choice but to find new ways to sustain our work. Somebody I know wrote a book about that.

ONE MORE THING: So Facebook’s Instant Articles are available only in iOS? Really, Facebook? Really? So what are the more than half of us using Android phones? Chopped liver? Shit. Here I defend the new product and I can’t even see it. Garg.

The decootification of media companies

August 5, 2014 by Jeff Jarvis
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LOCALADV DIGITAL PHOTO BY JUSTIN BEST Cooties for a Kristi column.

This pretty much completes the circle: Now Gannett is ready to spin-off its print properties, following Scripps in 2007, Belo in 2008, News Corp. in 2013, Tribune Company in 2014, and Time-Warner in 2014 — not to mention the Graham family putting the Washington Post up for adoption by Jeff Bezos.

Thus ends the decootification of media companies: entertainment here/print there; future here/past there; profitable here/screwed there. In corporate transactions, an unnamed venture is called a newco. In these media transactions, the abandoning parents might as well have called each progeny a crapco. They are not only set off on ice floes like elderly Eskimos awaiting a cold death, but some of their abusive parents — namely Time-Warner and Tribune — saddled them with horrendous debt. A few didn’t. Gannett’s spin-off is to be debt-free. Give considerable credit to Rupert Murdoch — who does love newspapers — leaving News Corp. with no debut and $2.6 billion in cash.

This is happening because the bad news for news isn’t over. The last best category of advertising in newspapers is the distribution of FSIs, free-standing inserts — circulars and coupons — which by one account adds up to 30-50 percent of newspapers’ retail advertising (though retail advertising continues to plummet). The last, best reason to keep printing and distributing a newspaper is FSIs. When you see papers cut frequency of printing or distribution to a few days a week, those are not hot news days; those are the days that bring FSIs and their revenue.

I’ve been saying here for some time that FSIs will go away. About two years ago, I asked a big-box retailer that makes much money from its circulars (from charging brands for presence in them) how long it would be before the circulation of print newspapers would fall below critical mass. The reply: 24-36 months. Note how long ago that was. FSIs are holding on for now but they are bound to start dropping off (a cliff) when (1) newspaper penetration — now running about a third of the country — continues to die off and as (2) consumer adoption of digital and especially mobile couponing rises and as (3) retail itself suffers in the face of Amazon and now Amazon, Google, and eBay all experimenting with same-day local delivery. Add (4): At the PostalVision2020 conference a year ago, the postmaster general described the entire business model of the United States Post Service as an advertising delivery medium; it will compete with newspapers for those last printed circulars and coupons and it is just as desperate for them.

I’ve also been saying here for some time that the real goal of newspaper publishers should be to become sustainable digital enterprises before the day when print becomes unsustainable. I’ve worked with two companies that are trying. Digital First started down the path but hasn’t arrived; it is a more digital and more viable company but still has a way to go to reach the promised land. Advance has consolidated digital and print in its markets, reducing print frequency in some and in all markets making digital the primary product for consumers and advertisers as well as staff and print a byproduct that still produces cash. Other companies have gone for short-term cash-flow fixes — namely, paywalls, whose growth has stalled both at Gannett (about 1 percent after a year) and now at The New York Times (in its latest quarterly report, the paper said growth of core digital subscriptions — apart from new digital products that themselves didn’t sell so well — stalled at just over 1 percent).

The job of turning a legacy news organization into a new digital organization is both wrenching and expensive. It requires urgency. It also requires patience and patient capital to fund reorganizations but especially innovation, which entails experimentation and thus failure — in a word, risk.

What these spin-offs signals is that media companies do not have the stomach, patience, capital, or guts to do the hard work that is still needed to finish turning around legacy media. So they spin them off. What used to be Gannett, Tribune, Scripps, and Belo are now TV companies. What used to be News Corp. and Time Warner are now entertainment companies — companies that might merge not, in my opinion, because that’s such a wonderful deal but because the best path they see to growth is not innovation there either but instead cutting costs and consolidating negotiating power to outmaneuver (with help from legacy telcos) the Netflixes of the future.

I see something else happening here: the end of the mass-media business model built on reach and frequency (unique users and pageviews) — in a word, volume. Google, Facebook, retargeting, programmatic advertising, all the companies and trends that are growing in advertising focus on individuals over masses, on data over mere exposure. If news companies do not figure out how to know people as individuals and find value there, reconstituting themselves as relationship rather than merely content companies, then they will find the ice floes under them melting sooner than later.

: LATER: Here I am on Bloomberg TV Market Makers on this story today.

Attention v. relationship economy

September 27, 2013 by Jeff Jarvis
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Oddly, Google chief economist Hal Varian analyzes newspapers‘ problems and prescribes solutions strictly from an old-media perspective — based on attention to marketing messages — rather than an internet (namely, Google) perspective of relevance and relationships.

In a speech to Italian journalists, Varian says that “the basic economic problem facing news is increased competition for attention” and that newspapers must use such tricks as tablets and dayparts to get people to spend more leisure time with news so they can show them more ads (ignoring, for one thing, the fact that advertising abundance — championed by Google — lowers advertising prices and takes from newspapers the pricing power they once had). “The fundamental challenge facing newspapers is to increase the time people spend on their content,” Varian says. “More time reading the newspaper online translates into more online ad revenue.”

I couldn’t disagree more. Pardon me for suggesting to a Googler that we would be better off asking, what would Google do?

Google reinvented the advertising model, moving past attention as a proxy for intent (“if they see my ad I can convince them to buy my product”) and placement as a substitute for relevance (“men read the sports section and men buy tires, ergo we will advertise our tires in the sports section”). Google also killed the beloved myth of mass media that supported it for a century: All readers see all ads so we charge all advertisers for all readers. Google understands that users have variable value that is increased the closer it can get to delivering relevance and intuiting intent through signals — search, location, context, behavior as well as consuming content — which come from having a relationship of mutual value with the user.

The last thing newspapers should do is continue to try to shovel their old relationships, forms, and models into a new reality. No, don’t just sell space for messages to advertisers (for they’ll soon wake up and realize the pointlessness of the exercise). Don’t try to recreate old forms in new devices like tablets. Don’t measure the value of relationship as page views or time spent. Don’t think your primary value is manufacturing content that you then try to sell.

Newspapers and other former media outlets should become — as Google is — services that still inform — that is their core value — but now can use their own signals to learn about and return relevance to people as individuals and communities rather than masses, thus deriving greater value in the transaction.

For example, through my use of its Maps, Google knows where I live and work. My local newspaper doesn’t. When I ask for “pizza” in search, Google doesn’t give me a hundred archived articles with the word “pizza” in them but gives me the nearest pizza (soon, I hope, the best pizza, the pizza I’d most likely enjoy, the pizza my friends like with ever crisper relevance … and crusts). If my newspaper knew where I lived and worked — if it gave me reason to reveal that — it could target content to me the way it already tries to target ads. Why does *every* newspaper site still treat its home page as a one-size-fits-all print page when it could prioritize news that might be more relevant to me?

The reason: because newspapers still believe in the myth of mass media; they want to hope that with enough time you will look at all the pages they make and all the ads on them. That is the old attention-based media model Varian still recommends. This is also why newspapers continue to sell advertisers space for messages when instead they should be helping those merchants build better relationships with customers. But first, newspapers have to learn how to build relationships themselves.

That is the lesson Google teaches us. That is the new media market Google, more than anyone, created.