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.
