newspapers

It almost seems indecent, at this point, to catalogue the death rattle of newspapers. Not a week goes by without the obituary of yet another once-esteemed daily newspaper, especially in the United States. Interest in this subject is becoming morbid.
There can be little doubt that the Jacobins of journalism have the upper hand. The blog posts of Jeff Jarvis are becoming increasingly strident, even triumphant, as newspapers collapse under the weight of their own arrogance. Jarvis, whose analysis is already post-newspaper, has on his side billionaire Warren Buffet, who said he wouldn’t buy newspapers “at any price”.
Added to these voices of doom we now have Howard Kurtz, a respected media critic who writes for the Washington Post and is perhaps better-known for his CNN show on the media, “Reliable Sources”. In his column today, Kurtz confesses, more out of sorrow than anger, that he’s come to the conclusion that newspapers are toast. As once-proud newspapers like the Boston Globe teeter on the brink of extinction, says Kurtz, he has reluctantly joined the ranks of the pessimists.
“The last few weeks have shaken my belief,” he writes, “suggesting that what I find indispensable — a daily compendium delivered to your doorstep — may be left behind by history and public indifference.”
Kurtz adds: “Newspapers are probably dying as a mass medium, except perhaps for elite or specialized audiences. Cutting down forests, printing the product and trucking it across the region no longer make economic sense. What is lost is the sense of community when everyone read the daily rag.”
I once hosted a television show on the media, and later ran a national daily newspaper which was then, as now, hemorrhaging red ink. I’ve never indulged in excessive nostalgia about the media business since moving on, but this indeed would be a fascinating time to host a television show on the media. I’ll be tuning into CNN International (from home in Paris) in coming weeks and months to follow the debate on “Reliable Sources”.
Meanwhile, another voice has jumped into the fray. Jason Pontin, editor-in-chief and publisher of MIT’s Technology Review, has published a counter-thesis argument under the ambitious title, “How to Save Media”. Pontin takes gentle swipes at some of the articulate voices among the Jacobins, notably Clay Shirky, whose “fashionable wisdom” about the death of newspapers Pontin rejects. On the oft-posed issue of what can replace newspapers, Shirky has asserted: “People committed to saving newspapers [are] demanding to know, ‘If the old model is broken, what will work in its place?’ To which the answer is: Nothing. Nothing will work. There is no general model for newspapers to replace the one the Internet just broke.”
Pontin has less time for Dave Winer, whom he dismisses as a “grumpy California software programmer”. Winer, known for developing the RSS Web-feed format, once wrote: “Fifteen years ago I was unhappy with the way journalism was practised in the tech industry, so I took matters into my own hands. And then dozens of people did, and then hundreds followed, and now we get much better information about tech. It will happen everywhere, in politics, education, the military, health, science, you name it. The sources will fill in where we used to need journalists. … Everyone is now a journalist.”
Shirky and Winer, argues Pontin, know nothing about the media business as practitioners, and consequently their radical visions are little more than “folly and ignorance”.
It would be inaccurate, indeed churlish, to characterize Pontin’s views as the voice of reaction. But he certainly belongs to what can be described as the cautiously conservative camp – let’s call them Girondins — that opposes what it sees as the vices of revolutionary excess.
Pontin makes some valid points that reveal his own disenchantment with how journalism organizations have been managed in the past. I am in a position to confirm his assertion that journalists traditionally have been “encouraged to cultivate a mild contempt for readers”. I also agree with his prescription that newspaper organizations must get smaller – and fast.
Pontin, as his title boldly announces, has a plan. Readers should consult his article for details. I had the impression that he’s less optimistic about the future than he claims. He concludes, for example, with the following prediction: “Things change or die, including once-cherished organizations. Today’s newspapers and magazines will be transformed or replaced by other publications, which will have new forms and modes of business. There will be a great and terrible clearing: scores of newspapers and magazines will vanish; those that survive will be much reduced; and most people employed as journalists or media professionals today will have different jobs in five years.”
I shouldn’t be surprised, I suppose, because the Jacobins and Girondins were, in the final analysis, simply different movements within the same revolutionary cause. And if one thing is certain, these are revolutionary times in the business of journalism.

A couple months ago, I wrote a blog post about the impact of Web 2.0 platforms on health care and Big Pharma. One of the issues I addressed was the influence of Big Pharma on the medical profession through what is euphemistically called “doctor detailing”.
In plain language, it’s a multi-billion-dollar Big Pharma marketing strategy to influence doctors by offering them all manner of freebies — from free dinners and sports tickets to baubles and trinkets like pens and coffee mugs. In the old days, these “good will” practices frequently included free holidays for doctors and their families to exotic places like Hawaii, usually under the pretext of attending a “conference” about health care. Critics claimed the doctor-detailing ritual, though justified as a way of “informing” doctors about new drugs, was in fact an elaborate Big Pharma racket to induce them to prescribe their branded drugs to patients.
It seems the Big Pharma boondoggle is over. As this article in the International Herald Tribune reports, the Big Pharma companies have agreed to a new code, effective January 1st, that bars them from lubricating their business relations with doctors with things like Viagra pens, Zoloft soap dispensers, and Lipitor mugs. The code appears to be “voluntary” however, in other words without enforcement teeth. Also, some claim there are loopholes allowing the moveable feast of lavish lunching to continue.
Leaving that ethical debate aside, these new Big Pharma guidelines are perhaps a sign that, with their profits going south and blockbuster patents expiring soon, the big drug makers realise that they have to start rethinking their business model. Spending billions on armies of marketing reps tasked with gently persuading doctors to prescribe their drugs seems antiquated in the Web 2.0 world. Big Pharma companies like Pfizer are now opting to reach doctors more directly — and cost-efficiently — by buying front-row seats in their professional social networking sites, like Sermo. That raises other ethical questions, which I won’t address here. My point is that Big Pharma companies clearly have decided to adopt new marketing strategies.
The freebie culture in many professions is a taboo subject because it’s embarrassing. Big Pharma can be credited, even if they are making a virtue of necessity, with bringing it out in the open and dealing with it in a transparent manner. My former business, newspaper journalism, is another beleagured industry that has long been feeding off a freebie culture despite its murky ethical implications. In some areas of journalism (fashion, travel, entertainment), the non-stop extravaganza of inducements is alarming. The pervasive freebie culture is a dirty secret that journalists never admit openly, but privately acknowledge — especially when on the right side of a large drink.
If it’s legitimate to question, and condemn, the big-bonus culture that led to the collapse of the winner-take-all financial industries with devastating impact, surely it’s equally legitimate to question the freebie culture that pervades so many professions.
What we are witnessing, I believe, is a massive restructuing of industries whose business models are being transformed. And it is now producing an impact on behavioural issues like ethical conduct. Watch for more of these convulsions as the Web 2.0 revolution sweeps through other professions, imposing new forms of transparency on old methods based on opacity.

In yesterday’s post, I addressed some of the structural dynamics of the newspaper business that are rendering the industry obsolete. In this second post, I will address a more controversial issue: the pervasive corporate culture in newspaper journalism that, by resisting new market realities, is accelerating the industry’s decline and obsolescence.

 Let’s start with a question. Why do so many established journalists dismiss the Web-driven technological revolution that is transforming their industry? The answer, I believe, is the way journalism is organized as a quasi-profession. In other words, the origins or this resistance can be found in journalism’s conservative and self-interested corporate culture.

Journalism is not, in fact, a “profession” according to any formal definition of that term. Professions like law and medicine are characterized by barriers to entry based on formal exams and credentials. Professions moreover enjoy monopoly entitlements, restrictive arrangements, and self-regulatory powers. Members of professional bodies are subject to discipline, and even expulsion, for malpractice or misconduct. Professionals, as we know, tend to enjoy high material and status rewards. Not surprisingly, professionals organize themselves to protect and promote their specific interests – especially their monopoly power.

The uncomfortable truth for journalists is that, whatever their pretensions, they are not professionals. So-called “professional” journalism is also relatively recent. It emerged after the Second World War, mainly through the creation of journalism schools which attempted to bring quasi-professional standards to a business that was, at that time, far from prestigious or glamorous.

Then journalists got their big break with Watergate. Indeed, the professional pretensions of journalism picked up powerful momentum when the Washington Post effectively brought down President Richard Nixon. Nixon’s disgrace and downfall was a great triumph for American journalism. Following the Watergate scandal, enrolment in American and Canadian J-Schools soared. Journalism was now the “fourth estate”, a player in the system, a powerful force in public life.

That was undoubtedly true. But what journalism was not – and still is not – was a profession. What is true, however, is that journalists – especially in North America – have appropriated the status attributes of professions. Thus the journalism establishment, with its close institutional ties to J-Schools, feels strongly motivated to defend its “professional” status and interests just like lawyers and doctors do when their monopoly entitlements are threatened.

It is for this reason that established journalists regard citizen journalism as a usurpation of their professional monopoly and the status benefits it confers. Journalists argue that, since they are educated and trained, they possess professional credentials. Citizen journalists on the Web, by contrast, are rank amateurs.

For an illustration of this conservative reflex, let’s visit the Ivory Tower of journalism education in America. At Columbia University’s prestigious School of Journalism, the school’s dean Nicholas Lemann published an article in The New Yorker magazine titled “Amateur Hour: Journalism Without Journalists”. This is what Lemann had to say about citizen journalism:

“To live up to its billing, Internet journalism has to meet high standards both conceptually and practically: the medium has to be revolutionary, and the journalism has to be good. The quality of Internet journalism is bound to improve over time, especially if more of the virtues of traditional journalism migrate to the Internet. But, although the medium has great capabilities, especially the way it opens out and speeds up the discourse, it is not quite as different from what has gone before as its advocates are saying.”

Lemann was admirably diplomatic, but not enough to conceal his unmistakably condescending attitude. No one should be surprised that the dean of a well-known American journalism school that serves as a gatekeeper into the highest ranks of the “profession” is sceptical about the rise of citizen journalism. Journalism schools are part of the same institutionalized quasi-professional elite that preserves, and defends, the material and status benefits of its members.

A subject that is truly crying out for serious investigation, however, is the role of journalism schools. It’s a widely known, but never admitted, fact that many J-Schools in North America are less committed to professional training as they are to ideological indoctrination (usually of the Marxist variety, though because journalism professors these days don’t actually read Marx, deference is usually due to Noam Chomsky and his disciples). I can’t count the number of times fresh-faced journalism students have come to “interview” me, regurgitating the vaguely formed Marxist notions of their esteemed professors. When you think about it, J-Schools should be natural allies of citizen journalism — and some J profs undoubtedly count among Web 2.0 evangelists — but most of them are too tied to the institutionalized values of the “profession” to make the break.

There are other troubling issues at J-Schools. Take Nicholas Lemann’s own school in New York. Columbia’s J-School has been shaken by an ethical scandal after students were caught cheating on an exam for a required course. And what was the course? Unbelievably, it was called “Journalism Ethics”. When students at America’s top journalism school are cheating even before they get real jobs, little wonder journalism has such a poor reputation with the public.

Now let’s visit one of the most prestigious journalism institutions in the world: the New York Times. The paper’s executive editor, Bill Keller, wrote the following about citizen journalism: “I still think his concept of a minimally edited, largely self-regulating information world tilts too far toward a romantic’s vision of anarchy. And the proliferation of blogs, while wonderful in many respects, has yet to make a compelling case for the wisdom of crowds. Sometimes citizen journalism resembles mob journalism, or vigilante journalism.”

This is an intriguing point of view for a top executive at a newspaper that has been discredited by shocking ethical scandals and management fiascos. US News & World Report described the New York Times’ tarnished reputation a “crisis of confidence in American journalism”. When established newspapers like the New York Times lose the trust of their readers, no wonder many are embracing Web-based citizen journalism, which has the additional virtue of fostering and enhancing new forms of social capital and civic engagement.

Only last week, marketing guru Seth Godin was lamenting the decline of the New York Times. “Page by page, section by section, the influence of the New York Times is fading away,” noted Godin. “Great people on an important mission, but their footprint is shrinking and the company is losing stock value and cash and power and the ability to have the impact that they might.”

According to Godin, the malaise at the Times is that it’s living in the past. “The entire mindset of (every) newspaper has been driven by the cost of paper, the finite nature of paper, the cost of delivery and the cycle of a daily paper,” he observed. “You run enough articles to fit as many ads as you can sell. These are artefacts of a different age, one that today’s consumer doesn’t care a whit about. Lots of organizations go through this analysis. How do you leverage your brand or your customer base to get to the next level, to enter new markets or new technologies — and do it while running your old business. And almost without exception, organizations are run by people who want to protect the old business, not develop the new one.”

The problem at the New York Times pervades most newsrooms at largely daily papers: a corporate culture of complacency based on “professional” arrogance. It is astonishing, for example, how much time senior editorial managers spend mobilizing huge internal resources to “game” journalism awards – like the Pulitzer Prize – in order to enhance their own reputations and promote their own careers. Many newspapers managers are more interested in serving themselves than they are in serving their readers. The New York Times indeed paid a heavy price for that professional narcissism when it was revealed that its ethical breaches were institutionalized right up to senior management.

It still might be argued that only institutional forms of journalism – i.e. media corporations – can produce “excellence” by devoting significant financial resources to newsgathering by staff reporters working in vertical bureaucracies. Bill Keller makes this argument when he dismisses citizen journalism as “anarchy”. The same argument is often made about states. We need states, with their bureaucratic forms of social organization and coercion, because the alternative is anarchy. Proof is the tragic consequences of failed states and stateless societies in places like Somalia.

This argument, on the surface, has some merit. But there is one important difference. When states fail, the tragic consequences are due to the absence of an alternative. In journalism, however, there are substitutes to industrially-produced newspapers and the vertical corporations that manage the work of journalists who create and package their content. The alternatives are already available on the Web.

Newspaper journalists sidestep this by focusing on the qualitative aspect of citizen journalism. Retreating behind their credentials-based “professional” status, they dismiss citizen journalism as little more than a hobby. Though as we have seen, there is no formal legitimacy to these professional status claims. They are pure pretensions.

As the newspaper industry’s crisis deepens, these professional convulsions become even more elaborate. Only last month, some fifty top American newspaper executives held a “crisis summit” sponsored by the American Press Institute. This closed-door, invitation-only powwow in Virginia had the self-appointed mandate of “saving an industry in crisis”. It would be churlish to doubt the gravity of this event, or to question the sincerity of its distinguished participants. But let’s get real. This was hardly what the newspaper industry needed: a blue-ribbon, country-club meeting bringing together the same elder statesman of American journalism who are largely responsible, directly or indirectly, for the industry’s decline in the first place. Are these really the people who are going to “save” the industry? The proceedings, in the circumstances, must have resembled the moribund Third Republic voting its own dissolution in a Vichy casino.

Beyond status, the real issue, of course, is power. The Web is diffusing power away from bureaucratically organised forms of journalism that, traditionally, have required massive capital investment. Power is shifting towards spontaneously organised journalists who can gather and disseminate news with no barriers to entry. For established forms of journalism, the writing is on the wall – and on their balance sheets.

No wonder that the old guard is declaring a cautious truce, with dignity intact. Bill Keller at the New York Times even agrees that citizen journalist advocates like Jeff Jarvis may have a point after all.

“Over the years he and I have edged somewhat closer,” says Keller. “Not to put words in Jeff’s mouth, but he now, I think, acknowledges the utility of professional judgment, skills and standards in helping an audience navigate the new information world, and the advantages of having stable institutions to pay for such things as a Baghdad bureau and to protect First Amendment rights in court. In turn, I’ve embraced the value of the audience as a participant in gathering, truth-squadding and appraising information.”

Keller’s grudging concession, while commendable, requires scrutiny. No doubt that the audience – in other words, the public – is embracing information gathering and sharing thanks to the Web. Less certain is that we need “institutions” like the New York Times to report from Baghdad or protect our fundamental freedoms in the courts. Who says that only established newspapers can perform these functions?

Also, why do established journalists claim, as Keller suggests, a monopoly on “professional judgement, skills and standards”? This is absurd. For counter-evidence, take the example an unknown American journalist, Joshua Micah Marshall, who earlier this year won a prestigious George Polk Award for legal reporting. Marshall was not a salaried investigative reporter with the New York Times, Washington Post, or Los Angeles Times. He had published his tenacious citizen journalism on his own website, TalkingPointsMemo. Marshall has never attended journalism school. He holds a PhD in history.

What is certain is that the underlying notions about “news” must be seriously re-examined, if not entirely reinvented. Jeff Jarvis has contributed to this debate by pointing out that the newspaper “article” – journalism’s main unit of production – is outmoded. Articles are static, whereas news is dynamic. Others, like Steve Outing who writes about newspapers in Editor & Publisher, agree. Outing has called for a wholesale redefinition of “news”. Many other intelligent opinions have joined this discussion. The question is thus posed: What is “news”?

As that debate moves forward, you can be certain that the industry will rapidly reconfigure itself as the shake-out starts to get brutal. There will be big winners and losers. It’s always hard to predict merger-and-acquisition activity. But it’s possible that we will soon witness another round – successful this time – of multimedia “convergence” plays as news organizations look for New Media partners in an attempt to reinvent themselves.

News organizations like Bloomberg, Thomson Reuters, Dow Jones appear well positioned for the coming shakeout, if only because they don’t have a lot of ink on their fingers. By contrast, the newspaper-based cooperative, Associated Press, is already struggling. In fact, only this week we learned that CNN, the global news television network, is attempting to knock AP out of the box and drive it out of business by selling its own news as a wholesale provider. Who could have predicted, only a year ago, that CNN would take a run at AP? It’s a sign that more of these kinds of moves are in the works.

The big losers, of course, will be the ink-stained newspaper groups weighed down by layers of legacy assets – or so-called “whale shit”. Some of them, like the Wall Street Journal, may survive. Most will not. And the date of their extinction from the media landscape will likely come before 2043. Steve Rubel, in-house PR blogger/guru at Edelman, puts the date at 2014 — a decidedly more imminent and daunting deadline.

Established newspaper journalists meawhile will be swaggering without their customary self-assurance as the creative destruction of the Web 2.0 revolution sweeps through their once proud “profession”. In newspaper journalism’s senior management ranks, many will even have to endure the necessary task of shovelling a lot of whale shit out the door. It won’t be fun.

Here’s the good news. In 2043, newspapers may no longer be around, but we will still be consuming news and information. Only it might not be called journalism.

The jungle drums predicting the death of newspapers seem to be growing ominously louder every week.

When established titles like the Christian Science Monitor announce they will stop printing a newspaper and shift their product online, it would be naïve not to interpret this move, and many others, as a sign that the industry is entering a painful period of massive restructuring.

Newspapers, and the media industries in general, are also going through severe cost-cutting measures, including layoffs, as they watch their top-line revenues go south. The only question is how long the agony will last. Maybe not the death rattle yet, but the prognosis is bleak.

Four years ago when Philip Meyer predicted, in his book The Vanishing Newspaper, that the final copy of the world’s last printed newspaper will roll off a printing press in the year 2043, it seemed vaguely alarming. The same dire scenario was evoked earlier this year in a New Yorker article citing Meyer’s book. Imagine that, a world without newspapers. Today Meyer’s prediction actually seems exceedingly diplomatic. That date is thirty-five years away. That date conveniently allows the entire generation in the top ranks of the newspaper business today to retire comfortably or go quietly to their graves before the ignominy of their profession’s unquiet demise.

Unquiet indeed. The debate about the death of Old Media is getting nasty. The latest salvo was a wicked piece in Slate that subtly traduced Web 2.0 media evangelist Jeff Jarvis, whose BuzzMachine blog enjoys a wide following. The Slate article was titled: “Is Jeff Jarvis gloating about the death of print?” Jarvis indeed has established a reputation for heralding a bold new era of “citizen journalism” based on networked Web 2.0 platforms. As an evangelist, he has been sharply critical of stubborn believers in the Old Religion – or, rather, Old Media – who just don’t understand that their business model is dying.

Slate’s slicing up of Jarvis was an Old Media counter-strike, though its target was more Jarvis personally than the substance of his ideas. Until now, Old Media advocates have been remarkably stoical as Web 2.0 evangelists, filled with passionate intensity, scoff at their outdated methods and proclaim their imminent extinction. True, some polemical Old Media voices have spoken up, like Andrew Keen, whose book The Cult of the Amateur is a reactionary defence of established media institutions and a shrill assault on citizen journalism. Conservatives claim that Web 2.0 evangelists are self-promoting hucksters jet-setting around the globe on someone else’s dime to industry conferences, where they scratch around for consulting jobs, pick up speaking gigs, and flog their snakeskin oil with juiced-up slogans and buzz-words about the inevitability of “social media”. That’s more or less the portrait of Jeff Jarvis that comes into focus in the Slate article.

I must confess that I frequently find myself agreeing with Jarvis’ analysis of the newspaper business. Perhaps that’s because, like him, I am a product of Old Media who now spends a good deal of my time thinking about New Media business models. I began in newspaper journalism 25 years ago – worked as a reporter, critic, correspondent, columnist, and eventually became Editor-in-Chief of a large national broadsheet, the National Post. I’ve also co-hosted a national TV show in prime time. I’ve moreover written two books about the Old Media business. The final chapter of one of them, published in 1999, was titled, “The Multimedia Revolution”.

In short, my long experience in newspapers and television procures a certain degree of confidence when critiquing Old Media. I know that business. At the same time, I don’t necessarily share the passionate convictions of Web 2.0 evangelism. While there can be little doubt that the Web 2.0 revolution has tremendous momentum at present, my own approach is more analytical than normative, more secular than evangelist.

My cards are now on the table. Now let’s return to newspapers. There can be little doubt, as previously noted, that the newspaper business is either dying or, at best, undergoing a profound structural transformation. There are many ways we can examine what is happening to newspapers, and bloggers like Jeff Jarvis are necessary voices in that discussion. So are the voices of his critics. I’d like to focus here on two issues:

First, the structural dynamics of the newspaper business that risk rendering the industry obsolete (I will address this issue in this post).

Second, the pervasive corporate culture in newspaper journalism that constrains the business from adapting to new market realities (an issue which I will address in a second post tomorrow). 

First, the industry’s structural dynamics. Let’s look at three pillars of the newspaper business: advertising, printing/distribution, and editorial.

Advertising. Five years ago when I was running the National Post, the advertising department was over-staffed with old-style “order takers”. We had dozens of advertising reps sitting in cubicles waiting for the telephones to ring. The senior advertising managers meanwhile were building good will in the old three-martini-lunch tradition. As Editor-in-Chief, I was dragged out to annual golf tournaments, pressured to make rubber-chicken speeches before clients, and arm-twisted into attending countless sales meetings because, I was told, big clients are always impressed when the top guy from “editorial” is in the room.

That was in 2003. The Web was exploding all around us. And yet I don’t think these grinding advertising sales rituals had changed much since the 1950s. I knew that the industry’s revenues were shifting online, and kept saying it. But nobody was listening. We didn’t even have editorial control of our own website. I logged on one day and punched in “George Bush”. This is the response the came up: “zero matches”. That’s when I knew we had a problem. And we did. Now let me ask this question: Was it really any different at most major daily newspapers?

Distribution. The first thing I learned as Editor of the National Post was that, while I was the most glamorous member of the paper’s executive team (editorial enjoys high prestige vis-à-vis the other departments), I certainly didn’t command the biggest budget. My editorial budget was less than 25% of the paper’s total cost structure. More than 50% of the budget was devoted to the grubby, low-prestige area of “manufacturing” – in other words, printing the newspaper. We were blowing half our revenues on just getting the product off printing presses (which, by the way, were in some cases owned by our fiercest competitors). Another big whack of the budget was getting the newspaper distributed – to subscribers’ homes, to hotels, to airports, and so forth. In sum, the vast majority of our cost structure was devoted not to “journalism”, but to below-the-neck functions of manufacturing the product and getting it to market.

I remember once giving a boardroom presentation to the senior corporate officers of my parent company, CanWest Global, a conglomerate that owns newspapers, television networks, radio stations, Web properties, and cable TV channels. The CEO was in the room, surrounded by the company’s top corporate officers. I was on my feet going through my plans and budget. Out of the corner of my eye, I noticed one of the top guys in the company, Tom Strike, tapping furiously on his calculator. Eminently likeable, Tom was known as a sharp “numbers” guy. As my publisher and I were walking everybody in the boardroom through our distribution costs, Tom was calculating the per-copy “yield”. I had a sinking feeling that his calculator was not my friend.

I was right. At one point, Tom looked up and said: “You’re in a shitty business”. Gulp. But he had a point. We had a negative per-copy yield. That’s why we were losing money. It wasn’t my editorial expenses. It was the enormous cost of getting the product printed and distributed. It was brain damage. When you are spending most of your budget getting a product to the doors of customers who don’t even have time to read it, but buy it out of habit or because it’s discounted, you’re in a shitty business.

No wonder newspapers like the Christian Science Monitor are going online. If you’re going to be disintermediated, you might as well disintermediate yourself.

Editorial. Most journalists are smart and hardworking, if egomaniacal and paranoid. I was once advised by a wise newspaper veteran that all newsrooms are essentially “adult daycare centres”. Not far from the truth. The real problem however, from a business point of view, is that journalists are totally disconnected from the realities of the business that employs them. And today, they are whistling past the graveyard.

I used to put my senior editors on the spot when we were discussing what should go on the front page. My ideas were much more expansive and less restricted by established journalistic values. I remember my Managing Editor once objecting to my lunacy by insisting to me: “But we have to the put the news on the front”. I replied: “News? Who says what’s news? You do?” Embarrassed silence.

Today, of course, newspaper editors are no longer the powerful “news” gatekeepers they used to be.  The rise of Web-based citizen journalism is disintermediating their traditional functions as gatekeepers and packagers. Newsgathering sites like Slashdot, Wikinews, Agoravox, Indymedia and many others have shifted power from “professional” journalists towards anyone who wishes to participate in the dissemination of information. In South Korea, for example, the OhMyNews site — whose motto is “Every Citizen is a Reporter” – has had a major impact on national politics in that country.

News has also been transformed by Web 2.0 platforms like Digg and Twitter. As the information flows following the recent Bombay terrorist attacks demonstrated, networked platforms like Twitter can get the “news” out faster than traditional media. As in Bombay, earlier this year when the devastating earthquake struck China, the first reports came not from media news reports, but from Twitter “tweets”. Thanks to Twitter, well-known blogger Robert Scoble reported the Chinese disaster an hour before major media like CNN. Scoble had been reading Twitter tweets from people in China while the earthquake was actually shaking the ground under their feet. In May, New Scientist reported that Facebook, Twitter, and GoogleMaps had been more efficient than traditional emergency services — which often rely on mass media — in responding to devastating California wildfires and the tragic Virginia Tech shooting rampages the previous year.

Make no mistake, Web 2.0 platforms are having a profound impact on how information is gathered and disseminated. News organisations, understandably, are inventing all sort of reasons and rationalisations to convince themselves that their own professional values and business models are unassailable (more on that tomorrow). In truth, they don’t have the luxury of being indifferent to these powerful forces. News organisations not only must reinvent their business models tied to vertical institutional structures and heavily dependent on increasingly stranded assets; they must also bring about a revolution in their corporate culture and professional values.

The first revolution (industry structure and organisation) is happening now, establishing its own facts. The second revolution (professional values and behaviour) will be harder to accomplish because it is meeting powerful forces of resistance. I will return to this subject tomorrow.

It’s perhaps fitting that, at a time when American capitalism is being forced to think differently about its practices, its journalistic bible, the Wall Street Journal, has just come out with a top-to-bottom overhaul of its online strategy.
The WSJ is one of the first major newspapers to transform its online user experience into a Facebook-style online social network. Its conversion to Web 2.0 comes on the heels of the New York Times’ launch in June of a beta feature called TimesPeople, which allows readers to connect horizontally, comment on stories, rate and review restaurants, and share things like videos and photos.
When the two biggest American newspaper brands roll out Web 2.0 strategies within the space of three months, it surely signals a major shift for the industry. What remains uncertain is whether these moves are an encouraging sign of leading-edge thinking or, on the contrary, a symptom of a newspaper industry in a fevered death rattle.
Other industries – health care, for example – are deploying Web 2.0 platforms as part of a strategic reorientation driven by what is often called “business transformation”. They have realized that they can, and must, do business in radically new ways as power inexorably shifts towards consumers. Newspapers, as everyone knows, are going through a difficult period of structural decline as eyeballs and advertising move online. It’s time for the industry to think differently. Can Facebook-style social networking come to the rescue?
Early reaction to the WSJ’s “Journal Community” is mixed. For one thing, the newspaper’s Web 2.0 features are restricted to paid-up customers. The newspaper has erected a paywall around its Journal Community to keep out 95% of the roughly 5 million non-paying visitors to the WSJ.com site every month. The WSJ obviously believes that its well-defined, and well-heeled, customers can be aggregated – and presumably monetized — as an exclusive community of interest. But a customer community is not necessarily a social network.
In Throwing Sheep, we examine this “velvet rope” approach to online social networks. The best example is ASmallWorld, which appeals to the global glitterati who, the site’s owners believe, don’t want to consort with cyber-social climbers and assorted other virtual vulgarians. The fact is, though, that open and horizontal networks tend to be the most successful (at least as social platforms). Yet the temptation to pull up the drawbridge and capture the value trapped inside is always tempting. Let’s remember that Facebook started off as a closed community (for the campus crowd) and gradually opened up, though not enough for some persistent critics.
The Wall Street Journal clearly wants to ensure that its loyal – and paying – customers don’t sneak out the side door of a virtual social network on its website. Customer defection clearly doesn’t worry the Washington Post, which has just announced that its website will refer readers to stories by rival newspapers. Imagine a news anchor on a U.S. television network like ABC telling viewers to check out a show tonight on NBC or CBS. “Our relationship with readers is changing,” says Jim Brady, the Washington Post site’s executive editor.
The WSJ’s Journal Community is facing another challenge. True, existing subscribers can create their own profiles à la Facebook and network with other readers. Judged by MySpace and Facebook standards, however, the WSJ’s Journal Community is decidedly conservative. There are no nifty software applications that unleash a free-for-all social dynamic where everybody gets to jump in and join the conversation.
As Alan Murray, the WSJ’s executive editor for online news, puts it: “You can network with people who won’t shout profanities at you.”
These timid steps into the Web 2.0 space are signs that Old Media executives either don’t understand the social architecture of online social networking or – more likely – are afraid of losing control if they loosen control. They are late into the game, but they want to be seen as players, so what we’re seeing are very cautious moves guided by paranoia about what might happen if they open Pandora’s Box.
“It’s still the same old story, where the newspaper industry has gone slowly in this interactivity thing,” notes Steve Outing, who writes on the newspaper industry for Editor and Publisher. “They are making some strides, but overall it’s pretty slow going.”
Most newspapers, indeed, have not shown the same willingness to experiment as the WSJ, New York Times, and Washington Post. Newspaper executives, and journalists generally, tend have nervously condescending attitudes towards the Web. Consequently, most newspapers have limited their Web 2.0 efforts to token bells and whistles: adding blogs, encouraging reader feedback, posting podcasts, and including “most popular” rankings for stories. Hardly business transformation, much less a Web 2.0 revolution.
Why these conservative reflexes? Given that their house is burning down, you’d think that newspapers would be ready to try just about anything, making a virtue of necessity.
As we argue in Throwing Sheep, a major obstacle to bold innovation in newspaper journalism is the industry’s pervasive “professional” culture that is hostile to change and jealous of competition. The rise of online “citizen” journalism, for example, is invariably dismissed, albeit politely, by established journalists who believe they somehow have a licensed monopoly in the newsgathering business. At most newspapers, the majority of journalists are still in “push” mode (they do the writing, rating, ranking, and reviewing and other people read it). The idea that information can — and should — move horizontally, or bottom-up, offends (and more to the point, threatens) their professional pretentions. Journalists fear the social dynamics of online networks as potentially destabilizing. In that respect, journalists are — like most professions — monopolists.
This tension is partly generational and will sort itself out over time. Most senior newspaper managers today are above 40, and thus are sticking with the old game and its entrenched values and practices. It’s the younger generation pushing up that feels totally at ease with the social dynamics of virtual worlds and online networks. More fundamentally, however, it’s a tension about status and power. Newspapers are dying, and so is the professional culture that rose to power on the strength of the medium when it was at its apogee thirty years ago.
An absurd symptom of this e-ruption recently broke out when the journalists at the Los Angeles Times sued – yes, sued – the paper’s new owner, colourful billionaire Sam Zell. True, Zell is an outspoken tycoon who told the newspaper’s staff: “I am your Viagra”. Some LA Times scribes may be sincere in their expressed concerns about the paper’s future in Zell’s hands. But in truth, what offends Times journalists the most is that Zell is restructuring his media assets to bring them in line with current industry realities.
It’s difficult to disagree with Jeff Jarvis, a longtime journalist and J-prof in New York, who in his BuzzMachine blog made the following commentary about the LA Times saga: “Journalists are such a whiny bunch, always complaining, constantly blaming someone else for their problems. But friends, as the Rev. Wright would say, the chickens are coming home to roost. Newspapers and newspaper companies are about to die. The last remaining puddles of auto, home, job, and retail advertising are about to be sucked down the drain thanks to the economic crisis and credit is about to be crunched into dust. So any newspaper or news company that has been teetering will fall.”
Which brings us back to the Wall Street Journal and its Web 2.0 experiment. It’s one of the few newspaper brands in the world that isn’t teetering – or, at least, stands a decent chance of surviving the shake-out. Not only is its customer base unique and affluent, but the newspaper is part of an information powerhouse whose parent company, News Corp, is one of the biggest media giants on the planet (and, incidentally, owner of MySpace).
Even so, it’s possible that the WSJ – like others who have taken the velvet-rope approach to Web 2.0 social networks – will get it wrong, at least initially. Maybe they’ll eventually get it right. At least the Wall Street Journal has acknowledged that it’s time to reinvent the business.