The Death of the Newspaper Industry

Much of the newspaper industry's decline is directly attributable to the fact it no longer commands a monopoly over distribution and therefore advertising.

Much of the newspaper industry's decline is directly attributable to the fact it no longer commands a monopoly over distribution and therefore advertising.  

The concept of one newspaper serving a reader's needs is incompatible with what the Internet stands for. News, on the other hand, will continue to survive.

For years now, the lines between Silicon Valley and the media business have been blurring. Not only do software applications now look more like media products—in that they are advertisement-supported and constantly updated— but the opposite also holds true.

Media products not only provide original content now but, like software products, also come with a wide array of tools and functions that allow customer to fiddle around with the content in a number of different ways.

This is the crux of the new-media versus old-media debate as conceptualized by people like Ryan Chittum, who recently wrote >a piece for the Columbia Journalism Review that took aim at the more utopian views of the news industry.

For Mr. Chittum, who wrote a take-down of Marc Andreessen’s bullish piece on the future of the news, the Internet has “unbundled advertising”.

The existential problem for the news is that the Internet has unbundled advertising from content creation. The new digital monopolies [Google, Facebook, Twitter] all have hundreds of millions of people creating free content for them. That’s where the big profits are,” he writes.

So what is the Internet really doing to the news industry?

For one, news is no longer synonymous with “newspaper” or even a “news website”. Secondly, the Internet has allowed all consumers of news to have access to the best news (both objectively and subjectively).

Take a look at the graph below. There are a number of newspapers in India that range from low-quality to high-quality. Unfortunately, in the pre-Internet, pre-digital age, much of what you read was determined by simply where you grew up.

If you were from Tamil Nadu, you read The Hindu. If you were from Bombay, you read The Times of India. If you were from Calcutta, you read The Telegraph. And so on and so forth. This was because newspapers couldn’t be in all markets, constrained as they are by physical obstacles like printing presses, distribution channels etc. (Even today, with the best technology, we still can’t get all newspapers everywhere.)

Unfortunately, most of these papers were probably in the brown, middle part of the first bar, with the quality of the paper being average. This means that readers were subjected to average quality news, average content selection and average quality writing for literally no fault of their own. They had no other options.

With the Internet, however, users can now access what they deem to be the best news—even if it isn’t from a newspaper or a TV channel. With Twitter, RSS readers and news aggregators, the first bar transforms into a power bar that is filled with high-quality news (in the eyes of the readers).

On an average day, a reader can now consume: a Sainath OP-ED piece from The Hindu, a rambling story from NitiCentral, an analysis from Kafila and an exclusive news break from Reuters.

What the second bar signifies is that a reader no longer has to wade through average/low-quality news. All of it is high-quality (both objectively and subjectively). Only the best news writers (who don’t just deliver plain old news, but analysis-filled news, jokes, value-added news in the form of video, etc) can now compete for the reader’s attention.

The transformation between the two bars—where the ‘average’ and ‘low quality’ parts have been cut out—is why hundreds of journalists are losing their jobs in the Western world. Journalists are simply not needed if their output is average. This is because the news industry no longer holds a region-wise monopoly on its readers.

Now, unfortunately, what makes a story/newspaper "average" or "low-quality" is often very subjective. For instance, local news stories on corruption, property taxes or the decreasing groundwater table aren't too often rewarded with Facebook likes. They however are exceedingly important as they give citizens vital information needed for voting and give activist organisations the ammo necessary to act on them. What the Internet has truly done is allow the reader to finally vote-- with advertising dollars- on what they like or enjoy the most. This is sometimes brutally fair - journalists who are really average and are not good writers get knocked out - but also exceedingly unfair, in that journalists whose stories are not popular online also get knocked out.

What is the Internet doing to advertising?

Quite simply, the Internet (along with Facebook and Google) has again broken another one of the newspaper industry’s monopolies. In the pre-Internet age, if Coca Cola wanted to do a targeted advertising campaign for either South India or North India—it would know that its best shot was to run the campaign in X or Y newspaper.

In the digital world however, newspapers have very little information on their readers. Who does have better information on readers/consumers/viewers? Facebook, Twitter and Google. Which is why, put together, they control a lion’s share of the digital advertising market.

The Internet has replaced advertising with ‘targeted advertising’—which serves as the economic backbone for most online services, including new-media news. Unfortunately, the concept of a newspaper—a broad, over-reaching general information dispenser—is incompatible with the idea of targeted advertising. Facebook, Google and Twitter know exactly what I’m looking for, why I’m looking for it and in some cases, even when I’ll be looking for it.

Its not surprising that a newspaper—in which an editorial board decides what the reader should read—cannot compete with Google or Facebook. [This competition has nothing to do with the fact that online readers create free content for Facebook.] The newspaper industry isn’t competing with online Silicon Valley-based giants so much as it is fighting with the way advertising itself as changed.

Another aspect is advertising real-estate. Front-page advertising jackets command huge premiums, because advertisers know it’s the first thing the reader has to look at when he or she picks up the newspaper. In the digital world—there is no “front-page” of a news-website. Not at least when most people get their news through Twitter – which means they click on individual links and go to individual pages.

Why don’t journalists talk about this enough?

For the simple reason that journalists aren’t trained to think like entrepreneurs—the so-called Chinese wall between editorial and business hampers any analysis regarding the news business.

When editorial and business are separated—which is absolutely critical for impartiality and objectivity— the drawback is that a journalist’s work often doesn’t directly influence the financial fortunes of the newspaper.

This is of course a little different if you score a monumental scoop a’la The Guardian and the NSA—but on a day to day basis, the work a journalist churns out doesn’t move the profit needle for the media house. The financials of a newspaper are often instead decided by the quality of management, the cost structure and how good the company’s sales and marketing departments are.

This fundamental schism is why journalists are currently struggling and confused - untill media houses transition to a pure digital form, they are paying a tax (in the form of zero increments and reduced promotion cycles) for all the physical constraints (such as printing presses, bloated HR departments) that suck up resources.

Finally, journalism schools pound in the idea that business shouldn’t matter and that journalists should only worry about the best way to present the news. While admirable, it’s also quite sad that the best journalism schools in India have zero courses on how to analyze the news industry or learning how to market ones work.

The journalists of the future will need to know how to court investors, learn the business of setting subscription rates, manage web hosting and understand how to deal with advertisers.

What’s the way forward? And where is opportunity going to be in the future?

There will be a slow schism in the news industry—much of the actual, daily, general news (breaking news, government interactions, routine press conferences, natural disasters, international news etc) will be done by news agencies such as Reuters/AP/PTI in all likelihood.

News outfits by themselves will become smaller and smaller—the bloat has to be removed—and will be funded by subscriptions (as the first line of revenue) and premium advertising (as the second line of revenue). Take for instance, The Information. It’s a technology news website that is funded by expensive subscriptions, but goes after more exclusive/investigation-based stories.

The biggest casualty will be hyper-local news. In the U.S, the number of journalists and newspapers that cover districts and towns has sharply reduced. With the news industry becoming leaner on the national level and covering more exclusive, investigation-based news, it is the hyper-local that will be ignored.

On the other hand, this becomes an opportunity. Hyper-local newspapers like Bangalore Mirror that collect more and more information on their readers will fund ways of being sustainable. A hyper-local news service that integrates seamlessly with Google Now or Apple’s Siri—and updates the average citizen as he or she/ commutes to work will become the way to consume local news. (Perhaps local radio stations will be the ones that benefit most when it comes to city-based news.)

Is all of this good for objective reporting, news, and democracy?

The biggest criticism of the newspaper industry is that it made its bed with advertisers and that is now doomed to fail as the online advertising industry drifts farther and farther away from newspapers. New media and citizen-journalism-driven websites are often referred to as “democratizing forces”, but this kind of democracy seems awfully narrow and awfully privileged to me.

Outside the new media-fuelled dope house—that dispenses its wares in plenty—people do not have the luxury of spending their time in keeping abreast of the latest Twitter feeds or trying to continuously update their news aggregators.

The poorer sections of society are trying to hold down jobs, feed their kids and take care of their parents. One of the reasons for turning to the world of advertising was to make sure that anybody could buy a newspaper for as little 5 rupees. But today, when the lower-middle class does have time to catch up on the news, they are confronted with an Internet wasteland, with the good parts often tucked away behind high pay-walls.

Another advantage of new-media journalism was its supposed sparking of public argument with the help of Twitter rebuttals and reader comments. If you ask people today, they would be happier with simple, unbiased information. Public argument was loud and polarised before the Internet and now it is louder and more polarised.

Its certainly fine to talk about “news as a conversation”—but what really matters is how well the public is informed and whether a watchful eye is still being trained on the powerful.

It is in this regard that the jury is still out on whether the Internet’s disruption has widened the choices available to the masses, or simply reduced them.

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Printable version | Feb 25, 2020 6:51:43 AM | https://www.thehindu.com/opinion/blogs/blog-hypertext/article5876547.ece

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