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.
It’s an old story. There were hundreds of car companies after WWI. Twenty years later there were a dozen large ones and many on life-support. Every city had scores of small general stores in 1915 when Vincent Astor opened the first supermarket, the Astor Market in NYC. Now it’s mostly chain stores, almost everywhere.
The news biz has successfully transitioned through several waves of new forms of technology. Now comes the big one. The survivors will be giant news corporations (like News Corp) and those in regional or topical niches supported by angels, dedicated subscribers, or highly targeted advertising. Unlike today, it will look like other major businesses.
Another symptom of decline
Journalism is a profession that, like all professions, requires the public’s trust. Without that they’re just clickbait vendors, posting fun content between the ads — a crowded (few barriers to entry) and therefore low profitability business. Gallup’s annual Confidence in Institutions poll shows this foundation of journalism slowly washing away: 25% have a “great deal” or “quite a lot” of confidence in newspapers (down from ~35% in the early 1980s), and only 21% in television news (down from ~35% in the early 1990s).
Gallup does a different poll asking people to rate their “trust and confidence in the mass media” on a 1 – 4 scale. Here are the numbers with the two highest levels of confidence, also showing a slow decisive decline.
Another dimension of the slow news crash
The industry’s challenge is not just an undersupply of news — that is, too little news of interest to their product (we are their product; advertisers are their clients) with too much competition to show that news. The industry also relies on expensive hunter-gathers of the news. In the past their trained experienced reporters were their strength; now they’re largely dead weight.
Look at any new event. Crowds of reporters screaming almost identical questions at the few major actors present. Press conferences show this to a mad degree. They almost outnumber the key actors at spectacles, such as at crime scenes and the national party conventions.
They fight for access as they file similar stories, most with little content — desperately seeking clickbait to gain enough audience to live another day. Reporters need safety lessons to survive the resulting media scrums without injury (“The consensus is that things have gotten worse these past few years. The appearance of additional all-news channels, the spreading of blogs and small news sites means that the number of reporters at news events has multiplied.”).
Competition has thinned the herd: the US Census shows that the number of “reporters and correspondents” has dropped by one-third, from 65,930 in 2000 to 42,280 in 2014.
I suspect that in 2028 the number of paid reporters will be down far more than just another one-third. Journalists face the scythe not only due to their excess supply but also from a powerful competitor: automation. See Journalists reporting the end of journalism as a profession. That’s an exaggeration, of course. Automation never takes all the jobs. However, much of today’s reporting consists of writing about press releases and stories about simple events and numbers (e.g., sports, economic news). Software can do much of that, with a small human input at the end of the process.
The delivery of news will also change as out e-agents sort though the vast volumes of daily news to find what we want to read or watch. That’s a subject for another day.
The oddity of these somewhat obvious observations is that they’re so seldom made. Brilliant industry experts, such as Clay Shirky, write volumes about the news industry — but relatively little about the core problems of excess supply and diminishing trust — the two make-or-break factors faced by everyone in the news biz.
Back to that article by Ezra Klein: he illustrates the blindness of many writing about this troubled but important business: “Length no longer matters — it’s as cheap to publish 100,000 words as 100.” Technically true, but almost irrelevant. An important story of many thousand words could always get published as pieces (Dickens published his interminable books in serial form in magazines). The important cost was, is, and will be for the people who research and write the story.
The news business is already controlled by a small number of hands, and that number seems likely to radically shrink during the next generation. As usual, the effects will be large, difficult to predict — and depend on our actions.
For More Information
There is a vast amount of chatter about the news. I recommend reading “Too many journalists” by French journalist Frédéric Filloux. To see the long view, read the almost delusional optimism of billionaire Marc Andreesen (it blinds him to anything but his big vision).
- A new news media emerges for our new world, unseen and unexpected.
- Are we blind, or just incurious about important news?
- We know nothing because we read newspapers — About mythical numbers
- Must the old media die for the new media to flourish?
- Clay Shirky is brilliant and American – hence often delusionally flattering.