Clay Shirky teaches about the social and economic effects of Internet technologies at NYU. In a post today, he explains why newspapers cannot survive. Here’s the nut graf:
“Newspaper people often note that newspapers benefit society as a whole. This is true, but irrelevant to the problem at hand; “You’re gonna miss us when we’re gone!” has never been much of a business model. So who covers all that news if some significant fraction of the currently employed newspaper people lose their jobs? I don’t know. Nobody knows. We’re collectively living through 1500 (when the invention of the printing press created a revolution and changed the world). During a revolution, it’s easier to see what’s broken than what will replace it.”
Now follow this logic:
1. Journalism is essential to democracy.
2. Journalism costs money.
3. The old ways to fund journalism are no longer viable, so we need new ways to fund journalism.
4. Subscriptions, micropayments and philanthropy have never generated enough money to pay for journalism.
5. With or without newspapers, advertisers still need to reach audiences, and they’re willing to pay billions to do it, so advertising remains the most viable way to pay for journalism in the future.
6. To help advertising pay for journalism, we need to create forms that are more efficient and effective for advertisers without intruding upon the end-user. (See Matt Mansfield’s post on that here.)
7. However, we must also remain open to the possibility of funding journalism with means other than subscriptions, micropayments, philanthropy or advertising.
Read Shirky’s complete post here. It’s long, but it’s essential to your understanding that newspapers are doomed.
Newspapers are in crisis. The old revenue model is no longer viable. If media companies want to produce journalism, they’ll need to find new ways to fund it — even if those ways are not explicitly tied to editorial content.
On March 21, the undersigned will gather in Washington, DC to start creating the new revenue models everyone agrees are needed, but no one has yet delivered. We call this effort RevenueTwoPointZero.
But unlike recent confabs of executives, editors and academics, we are hands-on professionals charged with delivering media solutions every day. And because we’re hands-on, we know how build to prototypes to demonstrate our ideas to the newspaper industry. We aim to do that by the end of the day on March 21st.
We reject the belief that media companies should pursue models based on pay-for-content plans or philanthropy. The latest report from Pew concurs. Instead, we believe the best hope for media companies to make money is the old-fashioned way — by earning it from advertising.
We will begin with these tasks:
- Build an effective advertising model for news content delivered on smart phones, such as Apple’s iPhone.
- Create a better CraigsList.
- Show newspaper-centric companies how they can better meet the advertising needs of small- and medium-sized businesses.
- Re-imagine the homepage and display advertising.
This ad hoc group has been assembled by Alan Jacobson of Brass Tacks Design and Matt Mansfield of Northwestern University’s Medill School of Journalism. Jacobson has been talking about online revenue for more than a decade. Mansfield is a former deputy managing editor of the San Jose Mercury News and is the current president of the Society for News Design.
The Society and its members have been at the cutting edge of virtually every newspaper innovation in the past 30 years including pagination, color, digital imaging and multimedia. SND has more direct leadership experience with radical change than any other group in the newspaper industry. And everyone in the industry agrees that radical change is needed.
Despite the fact that most of us come from editorial, we pledge to focus 100 percent of our energy on March 21 to developing advertising models. Our commitment is such that we are paying our own way. We are employed at the following places, but we are not representing them in this endeavor.
Vernon Loeb, The Philadelphia Inquirer
Eric Seidman, AARP
Jay Small, Scripps Interactive Newspapers Group and Small Initiatives, Inc.
Mary Specht, Gannett
Yuri Victor, Gannett
Jon Wile, The Washington Post
Chrys Wu, Washington Post Digital
Chris Amico, PBS NewsHour Online
Patrick Cooper, USA Today
Kristen Novak, USAToday.com
William Couch, USAToday.com
Wesley Lindamood, USAToday.com
John Kondis, National Geographic Digital Media
Kris Viesselman, National Geographic
Kaitlin Yarnell, National Geographic
Chris Courtney, Tribune Interactive
Ernie Smith, Express and ShortFormBlog
David Kordalski, Cleveland Plain Dealer
Steve Dorsey, Detroit Free Press and SND Secretary/Treasurer
Matt Mansfield, SND President and Medill
Alan Jacobson, Brass Tacks Design
There’s an idea going around right now that contends micro-payments for news online would help fund the journalism valued by readers. It’s a quaint thought.
The problem? That idea ignores several generations of how the business of journalism works, not to mention failed experiments in the last decade. We have tread this ground.
Readers never did “pay” for the news, really. I’d bet less than 20 percent of any newspaper’s entire revenue model ever came from subscriptions. Newspapers did make their money by selling advertising. That funded the journalism, as well as the costly means of production and delivery.
Do we really believe this is all that different online? What can go away is the expensive infrastructure required for production, and a distribution system that’s outdated and untimely. Our opportunity now is to fund journalism, not all the associated costs of doing the business of print on paper delivered daily.
The world has opened up. Not embracing that is foolish.
Information online, famously, wants to be free. That’s our collective expectation.
Couple that with an audience that will not pay for news online, like they might a song from iTunes (one of my colleagues likes to say you don’t listen to news over and over again, as you do with music).
Add in a dash of competition for attention in a world overrun with information.
Sprinkle in that free actually is a business model working for many places.
And, well, you get the picture. The marketplace does not support the idea that micro-payments will work. We should not spend time thinking down this path. It’s a dead end.
What should we do instead? Design a free experience that’s able to support itself.
About that advertising problem
We have to make the online advertising experience better.
Wait, let’s make it good. Just better won’t do.
Because many of us believe that the online reading experience depends on advertising to succeed, we need to invent new forms that enhance reading. We need to find forms that will provide advertisers with value while not diminishing the experience that draws people to the content in the first place.
We also must see that many ads are rich with content. They need to exist in an environment that makes sense. The best of the advertising out there begins to understand that role in the experience it has with its audience.
The smartest brands are forging new ground by connecting with customers as never before. The social media landscape has given companies a chance to show empathy, provide useful information, and break down the old walls that existed. It’s a new frontier.
It might well be that we can find ways to support online journalism without the overt advertising subsidy. We have that opportunity if we initiate an increased awareness of those behaviors that make us all willing consumers of information. We must see anew. We have to locate in this process how the journalism, the advertising and the intersection of the two create new meaning.
That kind of thinking may result in a fantastic formula for the function of advertising, pioneering forms for linking users with brands as an essential enhancement for products and services. It’s a concept not lost on the most successful companies. They’re already doing it.
In the meantime, as we learn our way ahead in what will work for journalism, we need less intrusive ads that can enhance the overall relationship we have with valued content. We also need to embrace a mindset that accepts failures on the way to radical change.
Otherwise, we’re just driving readers away, much like newspapers did by littering pages with such density of advertising that, in many instances, the ads were only talking to each other and not to any content or context. The pacing did not make sense. The experience was diminished.
Why replicate the bad inside pages of failing newspapers on the Web? There must be a better way.
There’s a reason we like that New York Times reading experience on the iPhone (free of advertising in all its pristine readability). We are readers first.
We have to see how we can make those kinds of experiences work and fund themselves without consumers paying directly for the content, which won’t work because the expectation of “free” online is so pervasive.
Certain interactions, when conceived correctly and nurtured by community, can be the content. There’s a reason they call it the experience economy.
To that end, we must think deeply about how advertising cannot be the awful turn-off that we all avert our eyes from. How it’s good when done well. Valuable when done exceptionally.
Enhancing these experiences would be a win. For everyone.