This morning's Trad Media shout from the battlements comes from Technology Review Editor Jason Pontin, who uses posts by Clay Shirky and Dave Winer to argue that the electronic barbarians at the gate "know nothing about the business of media." On the strength of this statement alone, Pontin is sure to drink for free at meetings of his peers for at least a month.
Pontin's point? Those who say that publishers lack good answers to the profitable future of their industry are simply wrong. "While the details are still debated," Pontin writes, "the broad outlines of tomorrow's media are becoming clearer. Consumers must pay for more of what they read; publishers and the media buyers who purchase advertising must be given technologies that will make online display ads more competitive with the keyword ads that search firms sell."
Pontin makes his case in support of these assertions in an expanded version of his column that I'll refer to as the "How to Save Media" version. Since it covers much of the ground I wrote about in March, I was quite interested to read it -- and rather bemused to note how blithely Pontin whistles past some deeply gloomy graveyards.
Let's critique it, shall we?
Right-sizing the mass audience
There's an important idea at the top that we shouldn't miss. Pontin opens by arguing for a mass-media future in which the circulations of individual printed publications decline to reflect their natural audiences.
The notion of "right-sizing" the audience for publications is long overdue in Pontin's profession. I learned it, of course, not from some mass media mogul, but from blogger/podcaster Dave Slusher in 2005. But I digress. Pontin's manifesto deserves credit for rephrasing the unbundling/niche idea in business-case language even a publisher can understand.
Why get smaller? Because you've oversold to people who only vaguely like your product, and you did that to maximize an inefficiently derived advertising rate that no longer attracts ad buyers. Getting smaller means improving the quality of the audience. That's another way of saying that the old model has been flipped on its head: Today you charge a higher rate when you deliver an efficiently derived target market.
Pontin's dictum "Publishers should charge fewer readers more for subscriptions" makes sense in this limited context, but keep your eye on this bouncing ball, because we'll be coming back to this point.
And note this extremely important distinction: Pontin, who comes from the magazine world, already lives comfortably in the niche universe. But there is absolutely nothing comforting about this argument to publishers of newspapers, who swim in the sea of generalized, bundled content. The advice is technically accurate, but it's akin to telling a fish, "To survive in this new environment, all you need to do is grow feet, dump those gills and start breathing gas instead of liquid."
Paid content and free content
Pontin's manifesto point A.3 is worth quoting in its entirety because it's spot-on:
Content that some readers pay for in one medium (now, usually print) should never be offered without charge to other readers in another medium (usually electronic). Instead, publishers should distribute editorial to their subscribers on a variety of platforms (see A.5 below). This is not to say that much content should not be freely available to readers and paid for by advertising revenues.
And how should we distinguish what is free and what may be placed behind a pay wall?
Editors can charge readers for content that is uniquely intelligent; that relies on proprietary data, investigation, or analysis; that helps readers with their jobs, investments, or personal consumption; or that is very expensively designed. Everything else should be available free, because it is news or opinion, which are commodities and must be offered up to the aggregators, social networks, and feeds. Such content can be monetized (to use the ugly jargon of our industry) only through traffic, which drives ad impressions.
And of course I agree. It's a restatement of arguments I've been repeating for years (most recently, III.3), and I certainly didn't invent any of these ideas. They're only new around boardrooms.
But let's pause for a moment. What was Pontin's original point about the "broad outlines" already emerging? "Consumers must pay for more of what they read."
For those of you with jobs and lives, I should point out that "paid content" is a hot topic this spring, which is why I spent 45 minutes pacing the 17th floor hallway at the Trump Tower in Chicago on Friday, talking over the phone to employees at The American Press Institute who have been commissioned to write a report on the subject. It's hot (again) because newspaper publishers are grasping desperately at the hope that pay walls will halt their slide into the waiting maw of oblivion.
So when Pontin writes that "consumers must pay for more of what they read," newspaper publishers cheer. And when he says that "news and opinion" should be free, he exempts almost everything they produce. And when you examine the history of charging for investigation, analysis and material that is "uniquely intelligent," you bump up against an inconvenient fact called "Times Select." One wonders what hope the average American metro daily has of charging for such things when the staff of The New York Times couldn't make the distinction work.
Are there paid content models that work? Absolutely: ESPN Insider gets my money. And WSJ Online thrives by offering info that has a bottom-line value to subscribers who can pass along the bill in their monthly reimbursable expense forms. And while I don't know a thing about its financial picture, I know that Stratfor is still in business, charging premium prices for what I called The Intelligence Briefing Model of Journalism.
But lets return to the audience for Pontin's manifesto: Once you back out the exemptions, can we really agree that consumers paying for more of what they read is a meaningful outline of the news and opinion business? Because to me it sounds like Pontin essentially agrees with our side, which contends that charging for newspaper content online is idiocy.
Back to advertising
The essential problem with most Trad Media futurism is that it gets the present so fundamentally wrong, particularly on the subject of advertising. There are some structural reasons for this, and here's the big one: Because print display advertising is so much more profitable, companies that publish both in print and on the web will ALWAYS emphasize their print ads over their web inventories. They do this with their policies (many newspaper website ads aren't true web ads, but print "upsells"), but also at the individual ad-rep level.
And it's worth stating this again: If web ads were nearly as profitable as print ads, we wouldn't be having any of these conversations. The old model would have migrated comfortably to the new platforms, Trad Media companies would still be making 15 to 30 percent annual profits, and publishers would have continued their long tradition of not caring about journalism. That's the editor's job, and as my first boss told me "You can judge how your newsroom's doing by tracking the publisher's golf handicap."
Stated another way, the market for newspaper advertising isn't a free market. The print ads are a monopoly in most cities, and the web ads on the online version of the paper aren't competing freely with the print product. What's the true market value of a skyscraper ad on a newspaper story online? I'd suggest we really don't know.
What I find alarming is that the same publishers who seem to resent free web content are also so comfortable with CPC ("Cost per Click") ads. Advertisers love them (except for that whole "click-fraud" thing) because they pay only for responses, and with Google serving them up by keyword and sharing profits with content producers, there's an aura of "free money" around the CPC model.
But here's the flip side: Even if I'm only getting a CPC text block beside a contextually related piece of content, as an advertiser I'm free getting audience exposure with every page load. It's not the same thing as a banner ad (a model known as CPM, for "cost per thousand" page impressions), but it serves the same function every time a reader passively notices your company's name and URL, and CPC advertisers pay not a penny for that. What's more, Google captures the big profits, and most media companies can't afford to develop their own CPC infrastructure.
So if Trad Media is so hot to make a stand against online encroachment on their turf, why wouldn't it start with CPC?
Pontin's response to this is to call for better measuring devices, which is like Chrysler proposing to save its gas guzzlers by producing better fuel gauges. Yes, Pontin is absolutely correct that Web metrics are generally a mess (although the Audit Bureau of Circulation would disagree violently with his assertion that "no one knows how many people visit websites. No established third-party supplier of audience measurement data is trusted.") and that improving them would generally make for a more rational market. But he doesn't address how the CPC model serves Google and the seller at the expense of the content provider.
If it were me, I'd charge a reasonable impression surcharge on CPC ads that appear on news sites. Individual bloggers can't negotiate deals like that, but Trad Media companies might have more luck with that approach than rattling their sabers at aggregators. But of course, as Pontin says, such outsider suggestions are "all folly and ignorance. Shirky, Winer, and other evangelists know nothing about the business of media. True, the journalists who write about these matters for mainstream media often know as little; I didn't understand much until I became the publisher of Technology Review as well as its editor in chief."
Oh dear. That certainly has the feel of an instantly regrettable statement, doesn't it?
And then there's journalism
Pontin's core argument is a straw-man setup with Shirky and Winer over the economics of quality journalism. It's misreading Shirky to argue that he doesn't get this point about journalism infrastructure, and I've talked with and read Winer enough to know that he understands the cost structures behind good information -- he just doesn't think the information we produce with all our institutional backing is very good in the first place.
So yes, Pontin's initial claim makes a great deal of sense: Quality is expensive.
The comparative advantage of mainstream media is not the ownership of presses, but the collaboration of professionals. The creation of good journalism is a tremendously laborious process, requiring an infrastructure more expensive than any press.
This is correct. But read his small print, and that's not what he's arguing for the future of mass media. In fact, when it comes specifically to the future of news and opinion:
Here, although the quality of the editorial should meet the minimal standards of a publication, editors shouldn't invest too much time or money: good enough is best.
"Good enough" is a phrase with an ugly history in our business. I once worked for a senior editor who was utterly befuddled by the changes in our industry, and he returned from a national conference of senior editors in the spring of 2008 repeating the phrase "good enough" as if it were a magical talisman. Needless to say, "good enough" quickly became a euphemism for the idea that "crap is OK," at the very moment that our industry faced surging competition from the same amateurs and sources that Pontin dismisses so casually. As I wrote last week, shoddy is a lousy business plan if you're competing on anything but cost.
He also got some things right
I've been fisking Pontin here because I think he's made some errors, some of which are certainly correctable and common. But I also want to point out some good ideas in his manifesto, because they have enormous implications and need to be amplified.
Pontin's section on right-sizing the audience of your publication should be required reading for news executives. I'd add to that thought this one tweak: If you're a newspaper editor trying to figure out what to do, think less about unbundling your content and more about unbundling your metro geography and its communities of interest. If you offered me a local newspaper (online and in print) that was written and edited for people with my worldview and interests, I'd be much more likely to love it. Editing the same story for rational people AND people who don't believe in evolution is a great way to make everyone unhappy.
Also very much worth your time: The bits about subscription flexibility, sponsorships and creative advertising /marketing approaches.
But the No. 1 thing that caught my attention was what Pontin called "proprietary data." It's just a phrase he glides past in his section about what people will pay for, but it's the fundamental building block of the 21st century media economy and the topic of much of my thinking these days.
Semi-structured information, created in the process of reporting what we traditionally think of as news and stored in ways that make both facts and contexts easy to retrieve, represents my best candidate for a robust new revenue stream that could support quality, sustainable journalism well into the future. My dictum: Donate the stories, sell the data.
On Saturday I spoke to a group of American and German editors on a foundation-funded trip to Chicago, and since my topic was the future of journalism, I thought I'd talk less about where we are and instead give them a little more on something hopeful. That hopeful something is an approach to journalism founded in informatics. It's my best new shtick, I'd never made it the focus of my public speaking before, and I was looking forward to the Q&A.
The punchline? At no time during the panel session or the small group sessions that followed did ANYONE ask a question about the informatics portion of my talk. They were happy to talk about how lousy comments are, for instance, but on the subject of what I think might save their collective asses, interest was nil.
I propose that this is because we simply cannot see what we cannot first imagine, and it's past time we stopped imagining how to eke by on an ever-shrinking pool of cash for journalism and started imagining systems that not only produce more money, but also add greater value: to journalism, to our pockets, to society, to our lives.
Pontin's failure in this piece is ultimately one of imagination. He can't quite imagine that Winer's passion about journalism is fueled by love, not scorn. He can't quite imagine that Jay Rosen's "Bloggers vs. Journalists is Over" is actually a post about improving journalism in the context of the emerging mediascape. Even when he touches on a solution that could have transformative power, Pontin stops short of imagining where that thought could lead us.
My suggestion to Pontin? Relax. Sometimes you just have to let the future flow over you.