On how we learned to stop worrying and love Chron.com

Last night I helped with a going-away party for one of The Talented Videographer's coworkers at the Houston Chronicle, and, as usual, the mood was somber. There have been something like six rounds of layoffs in the last couple of years. I noticed that, while individually they're all interesting people who I'd like to grab a drink with, assembled together they hum with a funereal air. Gallows humor isn't very humorous. The only mildly funny thing was the celebration: strictly speaking, the coworker isn't really leaving -- she's just moving from editorial to advertising. We generally agreed it was a vast improvement; the paper might not survive, but her new industry will.

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"Pinch" Sulzberger and the Demise of the NYTimes

There's a strong article out in Vanity Fair about Arthur Sulzberger, Jr., and his stewardship of the NYTimes. At its most basic, it argues that Sulzberger lacks the vision and the talent to recognize the kind of changes necessary and to execute them (but also, that his rod-sparing love for the paper is spoiling the institution). It also points out that all other major publishers have proven equally inept (except, perhaps, Rupert Murdoch). But it gives two striking examples of sharp ideas which they failed to act upon:

First, from Diane Baker, who came on as C.F.O. in 1995:

Her biggest disappointment came when she crafted a potentially lucrative partnership with Amazon.com, already the biggest bookseller on the Internet. The Times would link all the titles reviewed in the paper’s prestigious Sunday Book Review section, ordinarily a money drain, to the online bookseller and receive a percentage on every book sold. “We could have made the Book Review into a big source of revenue,” she recalls. Baker knew that Amazon.com planned to eventually sell everything under the sun, to become the first digital supermarket. Not only would the deal have produced revenue from book sales, it would also have cemented a partnership with a tremendous future. She envisioned the newspaper as a virtual merchandising machine. Instead of the old carpet-bombing model of advertising, it would in effect target ads to readers of specific stories. “You know what they said?,” Baker recalls. “They said, We can’t do it, because Barnes & Noble is a big advertiser.”

Think about it -- the Times didn't just miss out on a cut for selling books for Amazon; they missed out on a share of selling EVERYTHING on Amazon which Amazon now offers. With 20 million unique Times visitors a month, that would be TONS of revenue -- and vastly more valuable to Amazon (or anyone else) that half-page ads.

And then this from Max Frankel, a former executive editor:

Frankel wrote two memos, which he no longer has, but whose content he remembers clearly. In the first memo he argued that, because computers were so good at generating lists, and cross-referencing them, classified ads in newspapers were doomed. He suggested that the Times set up a computer system to allow buyers and sellers to deal with each other directly online—“It was essentially Craigslist,” Frankel jokes. “I should have started it up!” Craigslist was created in 1995 and today averages billions of page hits per month, with reported annual revenues in excess of $80 million. It is a major factor in the decline of newspaper ad revenue.

“The second idea was much more important, and came a little later,” Frankel says. “I wrote that one big coming threat posed by the computer was disaggregation: the Internet disaggregates the hunt for information. The need for information would survive the advent of the digital era, but the package offered by The New York Times might not. So how do you protect the package? What was so great about The New York Times was not that we offered the best coverage in any particular field but that we were very good in so many. It was the totality of the newspaper that was a marvel, not any of its particulars. The Web threatened to break that up. One way to weather this, which I suggested, was that we needed to pick the fields in which to be pre-eminent. If you want to have the best sports package, then start hiring the staff and make yourself the best go-to place for sports information. If it is business, or politics—whatever—pick one and make yourself the best, or make a strategic alliance.” This is the approach taken by ESPN.com, by Bloomberg.com, IMDB.com, Weather.com, and a multitude of others. Any one of dozens of sites specializing in, say, politics or the arts could have been taken over and built up around the Times’s expert staff.

And the article adds that the Wallstreet Journal pursued this path , and is aggressively filching market share from the Times.

It's a striking article, because it indicates how much it is the upper-level management of newspapers who are to blame. How many great ideas have been floated by reporters and editors, only to get canned somewhere up the ladder by hide-bound and purblind management. It certainly confirms my experience-at-a-distance with the Chronicle. (Seen that new website lately? Nothing bespeaks self-confidence like a unacknowledged bastard.)

It's also an interesting article because it evinces the same qualities which it argues that Sulzberger lacks; that is, it does not allow its apparent affection for newspapers and even for the man to get in the way of the story. And for that reason it's honest, painful, and very interesting.

P.S.> If you click on the "Beta" at 29-95.com, you get a sparkling pony. I think I'm charmed.

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Death of Journalism Mash-up: Ezra Klein and Matt Continetti on Clay Shirkey

Below is a Blogging Heads clip where Ezra (of the American Prospect) and Matt (of the Weekly Standard) toss around an article by Clay Shirkey on the death of newspapers. It's a great conversation between two pretty high-profile policy bloggers.



The argument from Shirkey is very, very strong. It states that the vast majority of newspaper readers have only been interested in the news on A1 of their local paper. And the ad revenue generated by that interest subsidized a ton of additional journalism. Klein calls it a "benevolent inefficiency." He argues that all of that journalism was really for a handful of regulators and politicians--the elites--and not for the general audience. And now that people in any market can get more and better versions of that A1 national news from the New York Times, bloggers and cable networks, there's no argument for the rest of the stuff local newspapers provided, and no subsidy to provide it. The collapse of local papers means that this regulatory feed-back is going to shut down, and "we won't know what we won't know"--to allude to an earlier post.

I'd add a further point. This additional non-A1 coverage created an enormous amount of reserve investigational capacity -- reporters who were trained to look into specific areas outside of A1 news. So when a C1 story went A1 (for instance, when Enron busted, or Katrina hit), there is a team of seasoned veterans who can provide deeply-sourced, intelligent coverage and analysis, because they'd been writing on related topics all along.

And this is the additional problem with the collapse of local news. Front-page news is only generally national -- sometimes the front page national news is in your back yard. And the New York Times and CNN can't cover those stories as well as a strong regional daily. Of course, during recent budget cutting, newspapers are already slashing the seasoned beat reporters, who are necessarily older and hence, better-paid and more expensive. So this capacity is already dying nationally, regardless of whether most of the dailies survive.

Shirkey makes a great point: the issue is not really the future of newspapers, but the future of journalism, and it's clear that going forward, those will continue to dissociate. That said, the form of the newspaper evolved to develop a very robust investigative model, and strong institutions, with all of the institutional knowledge that created. I'm not sure if internet journalism going forward can find the same long-term institutional strength. Imagine if much investigative journalism ends up funded by the public and by private foundations (as suggested by Ezra). Every major recession, every new budget-cutting push in government, would create a new crisis. Yikes.

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The End is Nigh

(UPDATED -- See below)

Matt Yglesias posts Tyler Cowen's "No Profits Here" Hypothesis:

[T]here was some productivity growth but much of it fell outside of the usual cash and revenue-generating nexus. Maybe you will live until 83 rather than 81.5 and your pain reliever will work better. In the meantime you will read blogs and gaze upon beautiful people using your Facebook account. Those are gains to consumer surplus, but they don’t prop up the revenue-generating sectors of the economy as one might have expected.

Matt adds:

Good examples of this would have to include Wikipedia (which is hugely useful but doesn’t make anyone any money at all), Craigslist (which has revolutionized the way people do a lot of things but has done far more to destroy other firms’ revenue sources than to make money for itself), and much open-source software (where the absence of copyright-enforced monopoly profits make the product more useful, but less lucrative, than closed-source products).

The post hit me like a brick in the head -- because I suddenly understood what this implied for newspapers. Until now, I've been telling The Talented Videographer (who works for a major metro newspaper) to buck up; sure things are bad, but eventually, the newspapers will figure out a profitable model for going online and the ones that do (NYTimes, WashPo, HoustonChron) will survive. And my confidence was rooted in a general belief that the internet "revolution" was more an evolution -- a shift from print to digital economy that would only temporarily destabilize the growth of such industries.

What this argument suggests, though, is that the internet is revolutionary; that there are many areas where the internet may heavily decrease the amount of capital and economic activity a specific sector can support (e.g. advertising:Craigslist, encyclopedias:Wikipedia). And this, in turn means, that there may be no return to the heady days of print journalism -- with thousands of investigative reporters employed full-time across the country. We'll be left with AP, Reuters, and ten thousand bloggers -- and nothing else. And as much as I love blogs, you have to assume that investigative journalism will suffer (politicians and business leaders return calls if you're at a major paper, but a blogger? Click). I guess the next big question: will the public care when their dailies close? Will they notice an appreciable difference in lifestyle without this investigative citizen advocacy? I'm pessimistic.

On a side note, this was essentially David Simon's stated thesis with The Wire, except that he argued journalism had already died at the dailies. And as, according to Simon, "everybody missed" that central story, I'm not sanguine about the future of journalism.

Anyway, I emailed Matt, and he thinks that its the non-journalists at the papers who face extinction:

I’ve been writing about this on-and-off for a while but basically, yes, I think that part of the print-to-digital transition for periodicals will be a dramatic reduction in the total number of people earning a decent salary doing this stuff. But bleak as the outlook may be for news reporting as a profession, I actually think it’s the less reportery elements of the modern newspaper that will be in an even worse situation. In the not-too-distant future, I predict that we’ll have approximately zero professional movie critics. There’ll just be movie fans writing in exchange for the ability to attend critics’ screenings, and some kind of aggregator websites.

That makes sense; there's no reason, if all I want is an opinion, to rely on a newspaper -- blogs are faster and sharper. (Hence Dwight Silverman is considering starting an independent blog.) But even if I want my news from a journalist, will I be willing to pay for it? Where's the new institutional structure to house, train, and develop them? I don't think experience blogging--even at larger sites like Huffpo or Talkingpointsmemo--will suffice. The best journalist bloggers are bloggers who were trained and developed as journalists.

UPDATE: Dwight Silverman emailed me a cordial note to set me straight. While he'd consider setting up a indy blog IF (big if) he became a layoff victim, he's happy with his current situation (and who wouldn't be?). Goes to show that cocktail blog gossip ain't always the most accurate (see: Wonkette).

Oh, and in case Wonkette emails ... I really meant Rush Limbaugh.

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