Summary: The news business will radically change during the next generation, and few seem to see the core problems of overcapacity (both too many companies and too many journalists) and the coming wave of automation. This post takes a brief look at both.
“Reading the morning newspaper is the realist’s morning prayer. One orients one’s attitude toward the world either by God or by what the world is.
— Hegel (1770 – 1831).
The news business is fine!
Ezra Klein, deacon of established opinion, asks “Is the media becoming a wire service?” They wish that were so. Wire services are still a business. Journalism today repeats one of the common stories of our day: a rich industry faces new competition, but prefers to listen to the band play while its ship sinks.
The obvious fact is that there are too many journalists and news corporations given their market (i.e., advertisers and paid subscribers). For most of its history their business consisted of protected markets — by industry and geographic area — each shielded from serious outside competition. Technology has vaporized those walls.
Today few care (except the old folks) what the local paper says except about local news (which they will not pay for, and whose ever-fewer local advertisers can support only in a bare bones fashion). Reporters at local news agencies can occasionally break stories, getting their 15 minutes of fame. But that’s not a living.
Meanwhile stockbrokers read the Wall Street Journal and Financial Times, liberals read The Guardian, conservatives read Breitbart and watch the pretty journalists on Fox, professionals read the New York Times, nerds read the splendid analytical work of Der Spiegel when it shows up on their Facebook page, and everybody reads hot stories when broken by the British tabloids (they break an amazingly high fraction of hot American stories).
These giants and the other news giants seem likely to grow, absorbing the audiences of the thousands of other news providers.
The consolidation process works slowly. The Boston Globe had its first issue in 1872 and became one of the nation’s top ten papers. In 1993 the New York Times bought its parent corp. for $1.1 billion (with the Globe its major asset). In 2013 John W. Henry bought it as a hobby and status symbol. The Washington Post was the core holding of the Graham family, one of the social lions of Washington DC. In 2013 Jeff Bezos bought it for $250 million (i.e., small change to him), probably to boost his status and political influence.
Most news companies will not find angel investors, only new owners that accept growth or austerity. For most the eventual choices are consolidation or slow death.