Summary: One indicator of the massive changes sweeping America is the destruction of longtime solid business models. This post discussed colleges; today we look at the news media. Tons of ink have been spilled on this, but IMO ignoring some likely outcomes.
The major news media are on a treadmill. Loss of credibility shrinks their audience, hence less revenue, hence reduced funding. Which reduces the quality of their product, hence even less audience. Worse is the loss of advertisers to new media (e.g., Craigslist and Google), which means less revenue, less funding for news collection, and smaller audiences.
This post speculates about the future, what new models might emerge from this turmoil. Here are some guesses.
- Fewer providers of news, operating with higher profit margins.
- A US news media more like Europe’s, with a wide range of partisan viewpoints
- A radically different system providing local news.
- Articles elsewhere about this topic.
- For More Information
(1) Few providers of news
Technology has opened the market for news to new competitors. The effect is similar to rapid cheap transportation’s effect on your great-grandparents’ general store: it created overcapacity. Most local outlets are uncompetitive, and there are far far too many national and global major media companies. Time will thin the herd, probably leaving fewer but stronger survivors.
The primary fact — ignored in most essays on this subject — is that the media are mostly distribution outlets for the actual producers of national and global news: the wire services. The major newspapers and TV networks also originate some of the news. Everyone else does little but re-distribute news and press releases.
The Internet gives the few news producers a direct channel to a new set of end customers. Their current customers are merely an expensive distribution network. They need to re-define their customer base and to either ring-fence their output (limiting access to subscribers) or sell advertising. Direct distribution eliminates a whole level of costs, making it possible for the few surviving news gatherers to enjoy healthy profits by some combination of these means. A smaller pie for the industry, but far fewer people feeding off it. Most of the current news media must die before they survivors enter the promised land. The transition will be painful for everybody — the dying media companies, the survivors, journalists, and us.
Of course, news is a global business. Premier firms like the Financial Times and Der Spiegel are producers of global news, now with improved access to US (and world) customers. Advertisers with global brand names will be natural markets for the few survivors.
(2) A US news media more like Europe’s, with a wide range of partisan viewpoints
A likely outcome is a US news media more like Europe’s, providing a wide range of viewpoints from explicitly partisan news media companies. Would that be better or worse than what we have today? I suspect it is a more stable outcome. Maintaining professionalism — in the sense of balanced and fair — requires much work from both journalists and their customers (us). Probably more effort than we’re willing to make, over the long haul.
(3) A radically different system providing local news
Few local media effectively cover local civic news, outside a few major cities. Typically anything that bleeds gets its 60 seconds of fame, and investigation of local elites is almost unknown. I wonder if there is a real business here. Perhaps some sort of community nonprofits will form to cover local news. Partly hobbyists earning a pittance but having fun, with adverts and donations covering costs. Much local news will be easy for amateurs to cover. Sports and politics are the prime examples, easy to cover and with large audiences. These will be great networking opportunities, and amateur news stars might wield substantial local influence.
These locals might become de facto “farm teams” (recruitment and training apparatus) for the surviving major media. Bloggers might become marginally paid reporters, analysts, and pundits for the media (trading their work for fame and exposure). That is, the major media might use locals and bloggers to enhance their reach and lower costs.
Imagine local news provided by amateurs, including poorly paid, often part-time entry-level professionals. Local news websites might act as like farm teams in baseball, with the major news services recruiting the best of them.
(4) Articles about this topic
Some articles by Clay Shirky, IMO one of the most insightful observers of the decline of the mainstream media business. They are at his blog, unless otherwise stated.
- Why Small Payments Won’t Save Publishers, 8 February 2009
- Why iTunes is not a workable model for the newspaper business, 3 March 2009
- Newspapers and Thinking the Unthinkable, 13 March 2009
- “Not an Upgrade — an Upheaval“, Cato Unbound, 13 July 2009
- A 2007 Zogby poll of public satisfaction with the quality of journalism.
- “Priced to Sell“, by Malcolm Gladwell, The New Yorker, 6 July 2009 — A review of Chris Anderson’s new book, Free: The Future of a Radical Price.
(5) For more information from the FM site
To read other articles about these things, see the FM reference page on the right side menu bar. Of esp interest are:
Posts about America’s mainstream media;
- More post-Fallon overheating: “6 signs the US may be headed for war in Iran”, 18 March 2008
- The media discover info ops, with outrage!, 22 April 2008
- Only our amnesia makes reading the newspapers bearable, 30 April 2008
- Successful info ops, but who are the targets?, 1 May 2008
- The myth of media pessimism about the economy, 13 June 2008
- Keys to interpreting news about the Georgia – Russia fighting, 12 August 2008
- “Elegy for a rubber stamp”, by Lewis Lapham, 26 August 2008
- “The Death of Deep Throat and the Crisis of Journalism”, 23 December 2008
- The media doing what it does best these days, feeding us disinformation, 18 February 2009
- The media rolls over and plays dead for Obama, as it does for all new Presidents, 19 February 2009
- The magic of the mainstream media changes even the plainest words into face powder, 24 April 2009
- The media – a broken component of America’s machinery to observe and understand the world, 2 June 2009
- We’re ignorant about the world because we rely on our media for information, 3 June 2009
- The perifidy of ABC News (tentative conclusion on a breaking story), 18 June 2009
- Are we blind, or just incurious about important news?, 6 July 2009