Here’s a brief proposition I’d be curious to see contradicted:
The common factor among all profitable journalism startups in the last seven years is not Web distribution, user interaction, worse content, better content, more content, less content, paid content or free content. The common factor is a narrow audience.
Here’s the best case against paid news content. It’s two sentences long:
“We tried that. It didn’t work.”
But there’s a powerful rebuttal to that case, one that grizzled online-news veterans (like my man Steve Yelvington, linked above) miss: The economics have changed since last time.
No, consumer desires haven’t changed since 1996. Sorry, Al, they wouldn’t pay for traditional newspaper content online then, and they won’t now. But local media incentives have changed since 1996.
The real question: whether those incentives have changed enough to force newspapers to make the crucial shift that could keep them alive — a shift to niche products.
If you want to understand how newspaper incentives have changed, you need to understand the following short story from the great Northwest.
It’s a story about hog fuel.
It’s been the formula embraced by every half-crazy, screw-the-system dreamer in history, from Henry Thoreau to Jerry Maguire:
Do less, better.
And for journalists, it’s the way of the future. It’s exactly what consumers are demanding.
How cool is that?
Follow-up thought on yesterday’s iTunes for news defense: When analysts say things like:
Newspaper content is ephemeral by nature … It isn’t the same as downloading a song and keeping it and replaying it. It loses its value almost instantaneously.
…the speaker is not describing a problem with iTunes. She’s describing a problem with the way news is traditionally presented.
It’s a problem that can be solved.
Update 7/26: Jackie Hai makes a similar point, except phrased better and with extra insights. Read it.
Is an iTunes for news possible? The cool kids all say no.
They’re wrong.
A year ago — three months ago! — I would have been the last person to make a case for paid content. But I’ve been coming around, and not for the reasons you think.
It’s not because I think newspapers can ever turn back the clock or put the news genie back in the bottle. They can’t. From now on, most content will always cost $0.00.
But not all content will be free, because money is not the only cost consumers must pay to read content. Gathering information — even free information — requires time, effort and knowledge: time to find it, effort to determine whether content is reliable, and knowledge of what content does or doesn’t exist.
If a product can save its readers enough time, effort or knowledge, they’ll pay money for it.
This isn’t to say that newspaper Web sites in their current form can save people enough time, effort or knowledge to be worth money.
My point is: the problem here isn’t the price.
It’s the product.
(photo courtesy Flickr user Roby72)
Here’s a simple principle for general-interest-ish publications an age of abundance:
Most readers don’t want more. They want less. Though they want more of it to be relevant.
Quicker is better.
Simple as that.
And as Eric Schmidt noted the other day: when speed is the goal, print still works faster than pixels.
Newspapers aren’t very fast.
But print is, or can be.
That’s why print is still king among newspaper readers.
It’s something to consider.
(photo courtesy Flickr user mharrsch)
One of the many reasons that small markets are not safe from the current roil: small papers and broadcast stations, with their low pay and heavy workload, have always been subsidized by the promise of advancing to a larger market, which (unlike the small papers) offered an upper-middle-class family wage and the time to produce high-quality work.
Now that larger markets tend to be basket cases, this subsidy will cease; fewer talented, hardworking people will be drawn to smaller markets; and the quality of small outlets will suffer observably.
One word: classifieds.
By now, most people in the news business know that the collapse of classified revenue is the biggest financial threat newspapers face in the short term. But many fail to realize that not only were classifieds hugely profitable, classifieds were the only glue holding general-audience publications in one piece.
It’s one of the many reasons why startups should generally not seek general audiences.
In media that face a scarcity of supply, like broadcast television or highway billboards, things are different. But the central goal of newspapers — amassing a large general audience — is profitable only because a classified section is a snowball: the bigger it gets, the faster it grows.
(Briefly, here’s why. Obviously, every additional classified-section reader makes that section more valuable to advertisers. But because people who use a classified section want more than anything to maximize their selection of products, every additional classified ad makes the section more valuable to readers. It’s a virtuous cycle.)
All this, I’ve understood for a while. Here’s what I didn’t grok until lately: the need to maximize the classified audience used to be a huge centripetal force on news content, pulling coverage toward the center of public life, toward the things everyone shared. The publisher’s objective: maximize the audience. The editor’s marching orders: please everyone in town a little bit.
Meanwhile, there was an opposing, centrifugal force: display advertising. Unlike classified advertisers, most businesses are looking for narrow demographics. They don’t want to pay for a big display that everyone will see. They want to pay for a cheaper display that only the right people will see. The narrower your audience, the less of your marketing budget that you’re wasting.
So: retail ads would seek diversified audiences, classified ads would seek general audiences — and for a while, classifieds would win.
Then the sea change.
These days, newspapers aren’t scarce; a printing press comes free with every Internet connection. For a few years, even the lure of free classifieds on Craigslist couldn’t offset the value of the big audience offered by a newspaper. But one by one, advertisers slipped toward the free service, and the classifieds audience has followed. A tipping point came in 2007, when Craigslist’s growing audience (and that of other listings sites) got big enough to be really valuable.
More or less, this is why the crisis is happening now.
Today, retailers are still looking for niches. Retail advertisers want to push newspapers and other audience-generating businesses away from the center of public life, into all the demographic nooks and crannies.
And today, there are no classifieds to pull us back.
1) I wish them well, and you should, too.
2) …but note the comma splice on their “about” page.
Michael Andersen
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