Recovering Journalist

And Never is Heard a Discouraging Word...

Jeff Jarvis, poking around lately in the post-modern world of advertising, has hit upon a scary thought: What if, basically, advertisers don't need media to reach audiences? What if advertising, as we know it, is irrevocably, irretrievably broken?

Jeff writes: 

So here's the real punchline: Advertising ends up having nothing to do with media. They become decoupled. Audience no longer yields advertising. Hell, advertising isn’t advertising. It’s relationships. Media only get in the way. There’s the corner we’re painted into, the chaos scenario, perhaps the doomsday scenario for media.

Doomsday scenario indeed. (Bob Garfield has presaged some of this thinking in his excellent Chaos Scenario, soon to be a book.) To put it another way: In a world where anybody–including an advertiser–can be a publisher via the Web and other digital media, why do advertisers even need to bother with the middlemen (i.e. newspapers, magazines, broadcasters–the ad-supported media) to reach audiences? Get a Web site or Twit or online campaign to go viral and you've bypassed the traditional channels. 

One might argue that you still need mass media to start the fire—that somehow, word has to get out that there's something great there, so that the virality can be stoked. Susan Boyle on YouTube, kindled by British TV and U.S. news reports (though those mostly came after YouTube), might be an extreme example. And maybe there still will be a role for media in focusing audiences for advertisers to reach. Maybe.

But I think we're going to see more examples of grassroots phenomena that spread on their own, without traditional media help, and advertisers figuring out how to take advantage of that to save themselves huge amounts of money in getting the word out. It's still a crude system (hell, so is advertising as we know it—remember, Wanamaker was an optimist!), but it's not hard to envision a world somewhere down the road in which advertisers are, well, no longer advertisers anymore, and decide they don't need the media middlemen. 

Uh-oh.

Here Comes the Flood

It's earnings season on Wall Street, which means we're finding out just how bad the first quarter of 2009 was for newspaper publishers and other media companies.

It was bad. Very bad.

No surprise there, though the numbers are nonetheless staggering. Advertising revenue at industry bellwether Gannett plummeted 34 percent in the first quarter from a year earlier. That's a big hit—unless you compare it to Gannett's classifieds revenue, which dropped a whopping 46.5 percent. Wow. 

Analysts are expecting similar drops as other companies report their quarterly numbers over the next few days; The New York Times described the industry's ad revenue decline this week as "the sharpest drop in generations." And it's not just newspapers: Folio magazine reports that ad pages in consumer magazines declined 25.9 percent in the first quarter.

Pick up just about any newspaper or magazine and you can see this: They're painfully thin. Last Saturday's national edition of The New York Times had exactly six ads in its A section—all crowded onto A2 and A3, with plenty of room left over for the paper's index. There were no other paid ads in the A section, and none in the Business/Sports section. The only bright spot was the usual collection of movie and Broadway show ads in the Arts section—and even that was sparse. (Update 4/21: The Times Co. reported a 28.4 percent drop in first-quarter ad revenue, far beyond expectations.)

This isn't exactly news, of course. The past few months has been described as a "hundred-year flood" for the publishing business. The flood is cresting now, and the damage in its wake is catastrophic. 

Does it get better from here? Look around you. The economy is still struggling, retail sales are spotty, unemployment is still high, banks are still moribund, real estate is still depressed, automakers are still in trouble. That portends that the second quarter and even the rest of the year could be as bad as the first. That means that the rash of cutbacks, shutdowns and other bad news will continue.

False Prophets of Profit

A friend who came into the newspaper business several years ago from a career in broadcast media was surprised at the poor quality of the newspaper business' trade press, compared to other industries. Ironically, the journalism industry just didn't seem able to support decent trade magazine coverage of itself.

But Editor & Publisher, the industry's leading journal, has really stepped up its game over the past few years, and the magazine and its Web site now provides generally sharp coverage of the changes roiling the industry. It's even willing to write critically and sarcastically about some of the industry's titans (OK, some of them are easy targets), and that would have been unheard of at E&P a while back.

All this is by way of background on an excellent new piece in E&P about the various alternative business models being bandied about these days for newspapers. E&P's Mark Fitzgerald thoroughly dissects such notions as not-for-profit models, antitrust exemptions and newspaper endowments, and basically finds that none of them even begins to resemble the magic bullet that many people are hoping for. In fact, when looked at closely, some are quite far-fetched.

Fitzgerald also correctly makes the point that many of the people advocating these alleged rescue plans—usually journalists rather than business people—don't really seem to really understand the business they're part of. He underscores this with a great quote from a veteran industry executive:

"It never ceases to amaze me, some of the wild thoughts and assertions that come from those who work with us and those in our industry," says MediaNews Group CEO William Dean Singleton. "Somehow, those who write and edit the news are just so ..." he pauses, searching for the right word, "so ... divorced from the reality of the business."

Touché. Fitzgerald's comprehensive, clear-eyed analysis is a real credit to E&P, and, like Clay Shirky's great recent essay, a must read for anybody who's thinking about the future of the news business (note that I didn't say "newspaper" business). And it shows, again, why the search for new business models needs to be inclusive—and not just a reflection of the wild dreams of ink-stained idealists.

Will News Tablets Finally Come Down from the Mountaintop?

With buzz growing over the Kindle 2 and its potential as a newspaper- and magazine-reading device, as well as a bookreader, it's worth remembering that the idea of an electronic tablet for reading news has a long and so far unsuccessful history.

More than 15 years ago, Knight-Ridder's Roger Fidler was famously advocating the creation of a tablet-like device as a way of distributing newspapers electronically. He's still at it, in fact, even though a lot of his vision of an electronic news future was overtaken, first by the Web and then by increasingly portable devices ranging from laptops to iPhones. (When I started out in new media in 1992, I heard regularly that no one would ever be able to read a newspaper on a computer while sitting on the john. Well, the iPhone has pretty much killed that argument!)

One of the problems with Fidler's vision was the notion that the newspaper-reader device had to come from a newspaper company. Needless to say, publishers aren't exactly technological wizzes (CueCat, anyone? Anyone?), and such development is probably better left to the Apples of the world. And now Amazon, whose Kindle offers a glimpse of what a portable electronic news reader might look like. 

Undaunted by Knight-Ridder and Fidler's experiences, however, Hearst is trying to develop its own electronic reader, in partnership with E Ink, the company that supplies the core screen technology to Kindle. It's better to let somebody else spend the big development bucks on hardware and then take advantage of their success, rather than to try to develop a specialized product that others publishers may (or more likely may not) also choose to adopt. 

While Kindle has gotten good buzz, it's hardly a ubiquitous product; indeed, it seems to be mostly beloved by journalists and a certain class of upscale book readers, and its sales–said to be in the hundreds of thousands–are a fraction of more successful devices like the iPhone.

My guess is that the Kindle is a steppingstone, transitional product, one that points the way toward the portable electronic news reader of the future, but not a big success itself. Apple is rumored to be working on a large-format version of the iPhone that will out-Kindle the Kindle and do many more things; doubtless there are other devices still in the R&D labs–including thin, flexible, roll-up screens–that will provide even better portability and quality. Devices that do much more than just present text on a screen also are likely to be more successful (again, see the Swiss Army knife-like iPhone). 

What Roger Fidler dreamed of two decades ago, and Amazon is dreaming of today, still isn't here yet. But it's probably coming, in one form or another. Just not from a publisher.

Looking Forward

In a comment on an earlier post here, Pat Thornton nails the challenge for news organizations:

I would really like the discussion to move to ways to create products, services and tools that people would be willing to pay for, rather than trying to get people to pay for content we know they don't value enough to pay for.

That's exactly the issue. There are a lot of people outside of the traditional news business thinking about this. But there aren't nearly enough on the inside thinking the same thoughts–and creating new products. They're still trying to defend the old models. The old models are broken. We have to move forward and create new kinds of products that will attract audiences–and ways to monetize those new audiences.

They Never Learn

A few months ago, after U.S. News & World Report announced that it was going to end its weekly (er, bi-weekly) print edition and move to a Web-first publishing model, accompanied by monthly print special editions, I had coffee with a couple of the magazine's top editors to talk about their new strategy. They seemed to be totally committed to Web publishing, and even spoke about how liberating it was going to be to not have to worry about print deadlines anymore (an important psychological and cost-saving factor that I think a lot of print people fail to appreciate). I came away thinking that U.S. News had a chance to be a real pioneer in the post-print world of news and analysis.

So the magazine's announcement that it's going to supplement its very good Web site by publishing a weekly PDF edition, for a $19.95 annual subscription fee, is a real head-scratcher. And I'm not the only one who's bewildered by it. 

Look, PDF publications DON'T WORK, either as a reader experience, for advertisers or as a business. U.S. readers have rejected them over and over. (Don't tell me about PDF successes in other countries–those are different markets with different cultures and tastes, and I'm not sure those "successes" have been all that successful anyway. The two Canadian PDF editions covered in this breathless story from 2006, for instance, appear to be history). 

PDF products are beloved solely by printie publishers and editors who think readers want to read the news in a print-like layout, and don't understand that a) electronic delivery is a completely different format than print and b) readers really don't want to have to print out their own magazine or newspaper. 

Every PDF or "electronic edition" newspaper/magazine facsimile started in the U.S. with great enthusiasm on the part of the publisher has stalled out at a few hundred or a couple thousand customers, even at the biggest publications. There's no market there, and the time and resources are much better spent on figuring out the optimal version of a Web-based product, mobile versions, etc.

Given my conversation with the U.S. News folks, and the Web savvy they showed at the time, I suspect something else is going on here: I wonder if the PDF edition provides U.S. News a way to avoid legal problems by fulfilling long-term commitments to subscribers who paid for the print magazine but are about to be disenfranchised. Instead, they'll get the PDF version. (Tellingly, it's free to current subscribers.) That's about the only thing that makes sense. Otherwise, U.S. News, after showing indications of some real Web savviness, is getting back on the road to oblivion.

All Or Nothing

On this day of national rebirth and renewal, some tough yet wise words about transformation for newspapers, broadcasters and other old-line media players from Diane Mermigas on the Seeking Alpha Web site:

There are no shortcuts for TV broadcasters and newspapers going digital. The internet's unique niche and scale economics must be adopted at every level of the media business to translate into sustained growth, profits and engagement with consumers and advertisers. ... It just takes courage to jump in all the way. If not now, when?

This echoes Marc Andreesen's similar advice from a couple months ago: You're simply not playing seriously–or succesfully–in the digital world as long as you're still primarily clinging to–and defending–your old business. 

It sounds radical, but to survive, media companies need to commit fully to online products and regard their traditional businesses as secondary. The focus has to be on making the online business model work–not on preserving a failing older model. Until that happens, media companies are going to continue to struggle with the transition–and, as Mermigas and others point out, consistently get beaten by more-focused competitors like Google, YouTube, Twitter, craigslist, Facebook or some startup you've never heard of...yet.

The New Media Audience

Tim Windsor posts a shout-out to Don Tapscott's book about the new generation of digital natives, Grown Up Digital, along with a telling photograph to illustrate that audience and why it's different from the audience that most of us are familiar with (and members of). As Tapscott writes:

If Wonder bread builds strong bodies in 12 ways, this generation is different from its parents in 8 ways. 

To wit:

• They want freedom in everything they do, from freedom of choice to freedom of expression.
• They love to customize, personalize.
• They are the new scrutinizers.
• They look for corporate integrity and openness when deciding what to buy and where to work.
• The Net Gen wants entertainment and play in their work, education and social life.
• They are the collaboration and relationship generation.
• The Net Gen has a need for speed–and not just in video games.
• They are the innovators.

That last point is critical. Those of us of the older generation (can't believe I'm typing that!) are really from a different age these days. We're have media and business behaviors and desires that are radically different from this new generation. We're a bunch of old fogeys, horse-and-buggy drivers in an era of supersonic vehicles.

Th members of that new generation are not only the new audience–they'll be building the new successful products (they already are, in fact). When I talk to journalism classes, I tell them to go out and create and build things that they and their friends will like and use–not what our generation wants. We're dinosaurs, and the way we consume media is fading fast. 

Everybody in the media business needs to be looking hard at this new generation's values and targeting products to them–and letting that generation take the driver's seat in deciding what those products will be. Seems obvious–but too many of us are still clinging to what is increasingly clearly past.

Magazines, Eating Their Young

I presume everybody who reads this blog also looks at Jeff Jarvis' BuzzMachine, but just in case, you should click over there and read his post about the magazine industry, which in turn references an interesting and troubling story from the New York Observer.

Upshot: Many magazine companies, cutting back costs like everybody else, have decided to make those cuts on the digital side, and hunker down in print. That's a pity, as Jeff points out. Magazines have always been slow to understand the power and potential of the online world, and this is just more of the same. Blindly assuming that the print business will come back to previous levels, they're missing great opportunities to position themselves for the future, especially, as Jeff notes, leveraging their brands into online community hubs.

Maybe when you're a weekly/monthly your culture just doesn't understand the concept of urgency. Or maybe they're intoxicated by those damn smelly perfume ads. But magazines need to be doing more, not less, on the Web if they want to have a long-term future. Clinging to print is a close-minded, losing strategy. 

It's probably not a coincidence that America's smartest magazine, the New Yorker, is doing smart things online these days, rather than retrenching. But the rest of its glossy brethren are acting very, very dumb.

Gathering Lots of Moss

Hot news from the magazine world: Wenner Media, publisher of venerable music/culture magazine Rolling Stone, has just hired its first-ever executive with responsibility for all things digital.

Oh. My. God. What decade are we in?

Let's face it, Rolling Stone, once the hippest magazine on the planet, hasn't been anything like hip for decades. Dislocated hip, maybe, or broken hip. Something elderly-sounding. But even that's no excuse for how badly the magazine has missed the digital zeitgeist. This probably shouldn't be surprising, since it never really caught up with the music video revolution a generation ago, either, and is still largely stuck in the '60s and '70s in its view of music and culture. 

Its Web site is abominable, the worst sort of cut-and-paste print repurposing job, and founder and CEO Jann Wenner still openly worries about cannibalizing print readers by putting content online. (Good news, though: He's started reading the New York Times online! Far out, man!) Turns out, in fact, that RollingStone.com has basically been outsourced to Real Networks (another happening sort of outfit) for the past few years. Sheesh.

Now, finally, Rolling Stone is going to try to get with this digital thing all the kids are talking about–you know, that social networking stuff and those mp3s and iPod thingies they seem to be using to play music instead of vinyl LPs and 45s. What a concept. The magazine must be all-a-Twitter. Better (or worse) yet, the company's new chief digital officer comes from no less a cutting-edge publisher than...Readers Digest.

Best of luck to them, but this is just more proof that, when it comes to the online realm, magazines make even newspapers look forward-thinking. In the end, the lesson here may be, to twist a phrase on which Rolling Stone all but based its founding philosophy back in 1967: Never trust any magazine over 30.