The Imagination Gap

As is often the case, things tend to come at me in ironic pairs. This week it was a video of Jeff Jarvis' introduction to the New Business Models for News conference at CUNY, followed a few hours later by a link to a December 2007 TED Talk by Kevin Kelly about the next 5,000 days (give or take 700) of the Web. And as is so typically the case, I found myself angling away from what appears to be the most reasonable and likely future.

For those of you not inclined to watch such videos, here's my short synopsis:

Jarvis: The Knight Foundation funded this exploration of what might happen if a major metropolitan newspaper vacated its monopoly and was replaced by a new media ecosystem (an eventuality I've discussed here and here). The study found evidence for a lively and profitable ecosystem including a healthy local-news blogosphere and a new-style news organization. In the spirit of this new enterprise, they've provided a freely downloadable spreadsheet for anyone who wants to tweak the numbers.

Kelly: Two years ago, when the Web was about 5,000 days old, Kelly wondered what the next 5,000 days would look like in retrospect (one of my favorite ways of exploring futurism, btw). 5,700 days ago, most futurists thought the Web was going to be "like TV, only better." He suggests that no one then would have taken seriously the development of the Web-based culture we enjoy today, with free and/or low-cost tools that would have seemed like foolish Utopianism had anyone suggested them in the early 1990s. As for the future, he sees a unifying trend toward a cloud-based "one machine," plus a number of developments that will be familiar to people steeped in quality science fiction.

Even shorter? Jarvis is pointing toward a new media economy that looks an awful lot like a steady-state extension of the old media economy, only better. Kelly is suggesting that we need to get better at imagining things that seem impossible.

Kelly is right, of course. We can't see what we can't imagine, and right now the greatest failure of the mainstream media economy is its inability to witness the forces that are reshaping it. As Clay Shirky put it, today's media "radicals" are the people who are describing what's actually occurring, in real time.

So it should come as no surprise that a Knight-funded exploration of a new-media economic ecosystem would come with certain rational biases, such as an emphasis on existing competitors to what we used to think of as mainstream media. If I were an institutionally funded guy, I'd probably do the same. It's smart, it's prudent, it's rational. And if history teaches us anything about prediction, it's also doomed.

But before we move on to talk about those types of flaws, let's talk about the most obvious (and so far as I've seen, not yet discussed) hole in the NBMFN projections: scale.

Without going into the figures too deeply (the researchers reasonably point out that the projections are just a "stake in the ground,"), the study assumes a bunch of start-up news blogs, each primarily funded by advertising, each supporting a small (six employees or fewer) payroll and making double-digit profits.

The business problem? No matter how much money you invest in one of these hypothetical news sites (and, to a lesser extent, the hypothetical new news organization), you will never create a salable asset. Even if you cover your hyperlocal community efficiently and profitably, you will never capture the economy of scale that turned metro papers (and television stations, with federally regulated competition) into cash cows. So what if your company makes 16 percent margins? If the raw numbers come out to $24,000 a year, pre-tax, who is going to spend the money to buy you out? Your business is your time and attention, and those things can't be duplicated or expanded. The hyperlocal market you can effectively serve isn't large enough to warrant anyone's investment.

Restated? The news blogs postulated by the study are essentially self-employed journalists. And if you look at them this way, you can imagine there could be quite a few of them, and that some could stick around for several years. Ad networks and shared resources (sales and development services, for example) will make that possible.

But that isn't a business. It's a job without benefits, sick days or vacation, and it's not likely to be sustainable for many people in most markets. That's what I found when I investigated the subject, and I knew just enough about entrepreneurial thinking to recognize a dead end and avoid it. If you don't create an asset, you don't have an exit strategy. If you don't have an exit strategy, you don't have a business. You have a job.

The big flaw, besides scale? Subsidy. These businesses are all founded on the idea of traditional advertising. And while smart people are starting to speak explicitly about the idea that the journalism we suppose to be a civic good requires a subsidy, very few of the possible sources are either sustainable, independent or potentially abundant.

In point of fact, only one potential subsidy aligns with the larger points of the developing Web, and that's journalism that creates structured and semi-structured data as part of its process.

How will such journalism create independent value? In a variety of ways, and each is connected to trends that actually have a future.

So why aren't these ideas discussed explicitly and more frequently? Well, most obviously because they're just too new for most people, which is why I now consider it my responsibility to talk about such things over and over. I once considered that the sign of a boring writer. Now I know it's the necessary act of manifesting a new idea in the physical world. Repetition is a required part of teaching, marketing and learning, and while these ideas will seem strange and improbable the first time you hear them, I'm betting that once you hear them enough to make actively imagining them worth your while, you'll wonder why you didn't think of it yourself. Neither are these ideas originally mine. They are just part of a movement that will not be visible in the mainstream culture for some time to come.

What will it take to make these ideas apparent? The continuing failure of the existing media economy, for starters. Beyond that, it will take tools that make a particular kind of writing and information structure efficient, plus the processes and practices required to turn data into products that visitors and clients will pay to own or use.

In the short term, foundation money is likely to continue producing studies based on business models that reflect conventional wisdom about media. But there are more people writing about these ideas this year than there were last year, and so it will continue, until we look back 4,300 days from now and say, "why didn't we see it then?"

And the answer will be, "Because we were only beginning to imagine."

Comments

[xarkgirl]

It's not that we can't imagine it - I know people with some brilliant ideas - it's more about timing. Innovation is a process that needs room for failure. Most media discussions are heavily skewed by the urgency of the now. Experimentation - and the readjustments that arise from it - is a luxury.

The time to imagine a stronger hull isn't after you rammed an iceberg. At that point, you're just trying to save the boat. The better design will come from those past the fear of drowning.

[Katherine Warman Kern]

Bingo!

Change is uncomfortable, so it's probably natural to hold on to the familiar.

Agree that so far New Media is just an extension of "Old Media" in terms of distributing content original to other media and relying on the same free/ad supported business model.

So, it seems ironic that when "Old Media" says "A business model dependent primarily on advertising is dead" (Murdoch at FTC), "New Media" (Huffington) says he is desperate.

The first step to imagination is to stop denying, right? So who is closer?

Katherine Warman Kern
@comradity

[Dan]

To my way of thinking, both Murdoch and Huffington remain distantly related cousins on the same family tree. What they're really arguing over is the idea that you can/should be able to charge people to read disposable crap. Murdoch needs that money, because with his print products he's upside down in terms of overhead and revenue. Huffington doesn't care, because she makes enough money on traffic.

Which is a legit business model: Come up with a product that scales to a mass audience (readership at Huffington Post is national), then staff it with a people who fit under your revenue expectations. Keep your overhead low, and there's your business.

Thing is, this does nothing to solve the problem of local news coverage. Everyone agrees it's valuable, but the more local it is, the fewer the people who value it. It's why I suspect there will be some interesting / weird pro-am hybrids over the next few years. I just don't see that transitional state becoming the new standard.

Huffington generates original content, but I don't foresee a scenario where Huffington-esque media outlets generate enough quality content (national, local or otherwise) to replace the content we've lost due to print cutbacks, much less the content we're about to lose as print pubs shut down for good.

So when people talk about paid content models, my answer is that we need to come up with content that's worth paying for, and standard low-grade journalistic writing is just not worth much these days. I suspect, but cannot yet prove, that integrating smart data principles into our theory of the press will begin to produce things that people will pay to use/own.

I'm fortunate to be working with some people who share that vision.

[Dan]

And let's be clear about one other thing: the cable news channels don't care about the newspaper companies' claims about paid content. Never have, never will. Their business model still makes money, and they don't even pretend to charge people for content the way the print people do.

So even if Murdoch gets his way and all the newspaper companies follow him into a pay-to-read future, it's going to be a short-lived future so long as BBC and CNN and FOX and MSNBC and the three networks keep pumping out text-based news on the web.

And what would happen locally if The Post and Courier went dark to non-subscribers on the Web? Great news for The City Paper, three TV affiliates, multiple blogs and micro-sites and, of course, TheDigitel.com, which continues to advance its claim to being the center of the Web news universe in Charleston.

None of those organizations is currently staffed to do the kinds of data journalism that I'm talking about, and honestly, most of the newspapers are too far gone to make the change. But when someone makes the turn, the game will change. It will be like World War I at the introduction of the tank: A largely static stalemate, but one side will have gained the ability to maneuver. In those situations, despite the appearance of equilibrium, collapse occurs rapidly.

[Michael Josefowicz]

Interesting post. Have you considered the model of Texas Tribune. VC funded to the tune of $2 million for two years operation. 14 people on staff. Top person gets over $300 K. Everybody else gets grown up salaries.

It's an interesting example of entrepreneurial journalism. The focus is Texas. Sort of hyper local but big enough to be interesting. They give away all rights to reproduce their stories. In fact they've made a deal with a bunch of print newspapers and cable channels.

The revenue stream is paid circulation for inside Texas politics. Plus holding events. Plus some fund raising. They are incorporated as a non profit.

It seems plausible to me. The way I see it, the data structure you propose is now trapped in wetware - very experienced journalists.

The exit strategy is a bit tricky. But any business where the value creators go home every night have a similar problem.

Do you think this makes sense?

[Cody Brown]

Nailed It.

My only comment is that describing exactly what's in that gap poses all kinds of challenges. I think you are right that you have to have a 'teaching approach' to what's happening.

I think few understand this more precisely than O'Reilly: http://www.youtube.com/watch?v=ir_7NJGhvsM

[Dan]

Actually, I think the way we'll evolve a data economy will be a tough transition for experienced journalists like me. What I'm talking about isn't *just* what we used to call "computer-assisted reporting" at IRE conferences, and in fact it's really not even *about* that kind of story.

Instead, I'm proposing that the collection of data in the process of reporting (so long as it's stored in an intelligent data structure), will eventually create value. It could be a database that is sold to urban planners, or marketers, or insurance companies, or Realtors. It could be data that gets built into various mashups, overlays and interactive tools that no other competitor can mimic.

Could reporters use that information to search for patterns and do some great journalism? I sure hope so. But that's not the reason for doing data collection. And experienced reporters aren't going to be our prime data collectors.

I suspect the best place to begin will be in some area with known informational needs. I suspect the best way to structure that data collection effort will be around the needs of the potential client. Normalize all your fields to an industry standard, use existing flavors of XML, and work these tasks into your newsroom staffing plan.

As I've discussed elsewhere, in some cases the collection will be done by clerks. In others by reporters. There will uses for Text Mining Engines and auto-tagging of natural language text, just as there will be situations where the logical tool for entering the data is a wizard interface rather than a word processor. But in every instance, the goal will be the creation of datasets that are accurate, complete, useful, interoperable and efficient.

If you're a journalist, you know how sloppy the average daily report actually is. I think this approach will quickly draw a line between sloppy narrative and transparent data structures. Data can be just as misleading as poor storytelling, but if methodologies are open, we can deal with that much more effectively.

I like the Texas example you gave, particularly in its inclusion of events in its business model. But I don't like non-profit approaches most of the time, and a statewide political report really doesn't match the local news coverage that I'm trying to fund.

Anyway, the exit strategy would be two-fold: Valuable data, which is an asset that can be sold; and tools and processes, which can be sold as products or distributed freely as platforms.

I'm working with Abe Abreu on a data repository project at the moment, and we'll learn more about these issues as we move into the Alpha phase this winter/spring.

[Jeff Ja]

Dan,

I finally got the time to respond: http://www.buzzmachine.com/2009/12/07/the-near-future/

-jeff