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Tuesday, June 09, 2009

Where the media is not going

Rupert Murdoch has said he can see a future without printing presses. He's already planning to charge in some way for access to some of News International's websites. Does he know what he's doing? I would guess that he doesn't entirely but he knows he has to do something involving revenue rather than expenditure. The alternative is watching his print business drain away.

The reactions of the digerati are predictable, whether they're represented by Michael Wolff on his news aggregator (polite way of saying leecher) Newser or Jeff Jarvis on the Guardian Media Talk Podcast. It won't work, they say. If Rupert would only hang on a year or two, listen to his users and change his corporate culture a new dawn would eventually break in which News International would no longer be looking at a declining market.

I can't get over the blithe confidence of these guys. It's the same airy faith that it will all work out I find in anyone who works for a publicly-funded organisation or gets their money from a very large vault rather than from customers or advertisers. You can't help but think that if they really knew a radically new way of doing things they would be out there raising the finance to launch the big game-changer. Because if they're right there must be an enormous opportunity.

Rupert Murdoch probably doesn't know what's happening. I certainly don't. I am however prepared to stick my neck out and say what I'm pretty sure is not going to happen.

* "New models" are not going to be cooked up in universities or think tanks.
* The decline in ink and paper advertising revenue is not going to be replaced by digital advertising revenue. Not now, not tomorrow, not ever.
* You can not blame this crisis on the short-sightedness and penny-pinching of all newspaper proprietors large and small.
* Since the internet abolished scarcity you can not get a premium on advertising revenue in premium environments.
* If users don't eventually pay in some way there will not be anything worth paying for.

Now tell me what is going to happen.

20 comments:

  1. To quote, "I can't get over the blithe confidence of these guys. It's the same airy faith that it will all work out I find in anyone who works for a publicly-funded organisation or gets their money from a very large vault rather than from customers or advertisers."

    Slightly off topic I know; but doesn't that apply to our government too?

    Good post. We are in the midst of a revolution aren't we.

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  2. Perhaps we're all just lacking in imagination, but bear with me a sec. What happened to people who made typewriters, or photographic film, or penny farthings, all things outpaced by technology? They either a) went bust, b) adapted what they made or c) "downsized" into being very specialist. My problem with newspapers is that while the delivery mechanism has changed, the basic consumer need hasn't. No one is saying I don't want a typewriter, I want an Apple Mac. They want news. Ok, so we have to give them news. How do we afford do that? Well, they could pay for it. Or we could get other people to pay to interrupt them consuming it, let's call them advertisers. Anyone got any other ideas? Because we've noticed that creating news is preposterously expensive, and people still want us to give them news.

    No one knows what's going to happen, not because we lack imagination but because it is a genuine, copper-bottomed mind boggler. People probably won't pay, and advertisers certainly have many other ways to spend their money. I've said it before on this here blog, but the future of news I can see involves people who happened to be there when it occurs, and the BBC, and not many other people.

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  3. Hello Mr Hepworth - I'm a fan of your blog - I find myself checking it most days. You're entertaining and wise.

    You've asked, so for what it's worth, my unorganised thoughts about what's going to happen...

    You're an expert. You've got a blog. My admiration for you/your work means I feel the need to offer this free content to the content you've created - this is a clue to how news will work in the future.

    I'm not keen on agreeing with the Jeff Jarvis types - but he is onto something - even if its delivery can lack wit and grit.

    Big news corporations are built around scarcity and ownership of distribution systems (transmitters / delivery vans) - the internet
    makes delivery of info easier so barriers to market fall away. Lots of news providers = can't charge a lot for adverts = doesn't support the administration of large corporations.

    Also I find myself waiting for the news to come to me - through this blog for example / through friends on Facebook. So the need for me to buy a newspaper is reduced.

    I agree with yr points: new models not from uni, digital revenue will never reach concentrated heights of ink and yr scarcity comment.

    But I question: Newspaper proprietors and 'worth paying for' points.

    I remember ten yrs ago, ink profits were high and many proprietors, understandably, didn't want to engage with the internet - it was for "geeks".


    I think, gulp, that large commercial news organisations will become smaller and maybe concentrate on building their brands around certain areas. Just cars, just houses, just politics, for example - and their websites will carry lots of targeted ads. This will provide income - but nowhere near as much as the days of scarcity.

    Us consumers of news will rely on trusted aggregators to supply us with the links that tell us about breaking news. News stories will use more 'user generated' video to tell the story - like Ian Tomlinson story. More and more phones now have video cameras.

    Consumers of news also become the creators/distributors of news - the need for middleman newspaper structures is reduced (i know, I know - the 'citizen journalist' dream/nightmare - but we're getting close to it). Trusted aggregators will emerge. There will always be a place for the crafted sentence and edited picture - but the audience, just maybe, wasn't as keen on the high polish as the professional journalists thought they were.

    I don't think charging for general news will work - exclusives are rare these days now that many of us carry mobile phones with cameras and internet access.


    Please note: I tend to modify my views every 30 seconds or so, depends on how I'm feeling.

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  4. I remember ten yrs ago, ink profits were high and many proprietors, understandably, didn't want to engage with the internet - it was for "geeks".

    I don't recognise this. Who were the newspaper proprietors who were not spending fortunes on their web operations in 1999? I think that was when they were spending like there was no tomorrow, wasn't it? Arguments like this usually involve bold innovators making fortunes while the forces of conservatism do nothing. That doesn't work as an anaylsis of what's going on here. The bold innovators can't make any money except by getting the forces of conservatism to pay them.

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  5. The debate about free news content mirrors the same debate about how great it is that music was liberated from "the man" and the shackles of old-style corporate culture by the internet.

    Youtube, last FM, rhapsody, spotify, Pirate Bay: all proclaimed as the future at one time or another, are routinely praised for their forward thinking approaches and new business models.

    Everything will be paid for by advertising. Whoopee, everything is free!

    Then some find they can't make a buck especially if they have to do old-fashioned things like pay out royalties to those old-fashioned content providers at old-fashioned rates.

    Thus the old, out-moded, out-dated content providers are told they must revise their business models in order to support the new players on the block - aka "we totally screwed up in our projections for profitability but if you don't cut your rates to something we can afford then you're obviously a dinosaur."

    As with the future of music, so with the future of news. The problem with the "everything for free" culture is that there is that we seem to have forgotten the truth of some old-fashioned sayings: If it looks to good to be true that's because it is too good to be true.
    Oh, and let's not forget our old-fashioned and hopelessly outdated pal - "there is no such thing as a free lunch."

    Somebody,somewhere ends up paying.

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  6. I notice that blogger now has a magic new button on the post creation page called "Monetize". Surely all publications can just click this button?

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  7. dickdotcom7:57 am

    David, I read your post just after reading this: http://reutersinstitute.politics.ox.ac.uk/about/news/item/article/awkward-questions.html which you may find interesting ...

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  8. Thanks for that, Dick. You can find it here.

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  9. StephenC12:50 pm

    Mr Hepworth.

    The future of news is in free delivery, provided by google/yahoo/bbc/another. These will be funded by either the public (bbc) or organisations which provide the news feed as a way of entising us into thier other products/services, and, yes, we the public will become a prime source for a lot of it - for better or worse. However, there will always be a need for news analysis, and this is where journalists (or people who are capable of putting a good sentence together as well as offer valid arguements) will still be needed. The skillset won't change, the focus will. As consumers we are being molded into accepting 'bite size' news, delivered to us through mobile devices and read in snatched moments inbetween everything else. We will need to rely on 'after the event' professional summaries more and more to get to the root of a story.

    Another good post sir, thank you!

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  10. Isn't it possible that the lack of scarcity problem is going to be solved by more news companies folding?

    It's striking that when you really need the thing that news organisations provide - from breaking news of a major event to a review of a new restaurant - you can easily find five near-identical versions of the same thing. It's bonkers. They're all hanging on for grim death, hoping they're the ones who survive to the oligopoly phase.

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  11. dickdotcom7:11 pm

    I think there's an answer out there somewhere but I'm not sure exactly what it is ... I think it depends on two things:

    I read somewhere recently that there's an economic law that states that where the incremental cost of distribution tends towards zero, then price tends towards zero. After all if there's almost no extra cost to the Guardian of them delivering me an http page with a story on it - why should I pay them for it?

    Secondly you have to consider what people are actually buying when they buy a product ... it's probably less the product than, ahem, the meta-product (or the brand values): Quality, Trust, Distinctiveness, Delivery. It explains why is The Word probably the only media I regularly pay money for ...

    Quality - good writing, high editorial standards, great access to interviewees
    Trust - the writers have a pedigree in their area
    Distinctiveness - they take an editorial line which is true to the magazine and not to be found elsewhere
    Delivery - It's best read as a magazine rather than on the web - I can read it in bed, on the loo, on the bus etc ...

    Most media outlets, in common with the music business and politicians have spent the last two decades in a relentless drive twoards uniformity and conformity sacrificing trust, quality and distinctiveness in the process ... none of them have actively tried to exploit the new world to build a product set which is any different to what can be got for free ... hence they're all in crisis ...

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  12. Sorry to dive in again, but I disagree with StephenC if that's allowed on such a genteel blog. Google is not a news organisation, it has no journalists. And yes people who are at the scene of an event will capture it on their phones. But we mustn't confuse that with actual news journalism. And whatever we do we mustn't confuse analysis with news journalism. You only have to look at the woeful state of the Evening Standard lately -- all "comment" and no news -- to see that it has a very, very limited appeal. It's like comparing a Jeremy Bowen report from the middle east with a Jeremy Clarkson 1000-word will-this-do-athon in the Sunday Times. One takes talent and a great deal of money, the other talent and access to a laptop in an agreeable study in Wiltshire.

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  13. Re: Dick's post above

    After all if there's almost no extra cost to the Guardian of them delivering me an http page with a story on it - why should I pay them for it?

    The cost to the Guardian of delivering a story to you is huge but it's justified on the basis that you will pay for a paper version of that story plus thousands of other stories. Even the cost of them delivering it digitally is surprisingly high. In the end if you don't pay for it and advertisers don't pay for it it won't be there anymore. And if it isn't there then Google can't point you to it.

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  14. My completely uneducated view is that the introduction of pay per view news websites will quite possibly drive some (but perhaps not a huge number of) consumers back to printed media.
    Given that yer basic reporting of significant events will be always be available for free somewhere on the net, the only parts that will be chargeable will be things such as opinion, comment, analysis, etc.
    Personally I suspect that if anyone wants to pay for those elements they're more likely to want them in a format that they can read whilst eating breakfast, or commuting, or on the loo, etc.

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  15. I agree with Phil, I don't know where some of the commenters above get this notion that you can get "news" from "real people" or even Google or Facebook. They don't create any content themselves, just link to other people's, these "aggregators" have to get it from somewhere it just isn't wished into existence by the magic news fairy.

    Someone taking a snap of an event on their camera phone isn't reporting and most important stories take someone digging into areas that aren't in the open (eg: Watergate). Those people are called journalists. The medium may change but that won't, well it better not or we're in trouble as democracies.

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  16. To which you might add that BBC News - redoubtable service though it is - would find itself really stretched if it were the nation's only news source. A huge proportion of the stories that come through BBC News begin life as items in the written press. Take that away and you really will notice.

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  17. I was talking with some quite engaged PEP students from a good uni the other day and they have largely ceased to use mainstream media . They Claim never to buy a paper, never watch tv on a tv and are happy with the news in the 5 headlines chunks on the yahoo homepage. They steadfastly don't pay for anything online apart from role playing games.
    Not sure I have point other than I was astonished how quickly the change has happened and also will these bright young things want to pay for a bbc they percieve they never use?

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  18. When we entered the sixth form I remember that the school was insistent that we read a proper newspaper. Of course a lot of us pretended to do so while in fact looking at the cartoons and the sports pages but we were at least impressed by the emphasis given to longish reads. We knew that if we were ever interviewed for anything we would be asked about things we had read in the newspapers. The fact that PPE students (of all students) have got on to a course without reading a newspaper is pretty frightening but it probably just reflects the fact that most of our universities seem to prefer not to meet prospective candidates.

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  19. Painfully on topic, there was a very funny bit on The Daily Show last night about the New York Times being full of "aged news"

    "Go on, show me me on thing in there that happened today"

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  20. dickdotcom makes the most pertinent observation in his reference to The Word satisfying the criteria of Quality, Trust, Distinctiveness, Delivery.

    The current route taken by most newspapers of dumping all or most content on the Web is suicidal. Charging for it will cause resentment.

    In South Africa, a small media field, only a couple of newspapers make a profit and record increasing or steady circulation figures. The most successful publication, the weekly Mail & Guardian (www.mg.co.za) puts all content on the their website, plus breaking news, exclusive commentaries and analysis, blogs etc. The weekly print edition works as a "greatest hits" of the week in print.

    I suspect that the future is in mostly splitting web content from print content; that is, only limited print content spilling over on the website (which would have its own exclusive content), and vice versa.

    Print news media will need to adapt to the new means of news transmission. They can't compete with the speed of breaking news on the Web and electronic media. I expect that the print media will need to present news either through an analytical filter, or find and run unique news items or news angles.

    As for advertising, I'm no expert (as a journalist I understand the nature and role of content better), but it would seem to me that an approach which offers an integrated print/web package might provide some answers.

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