I’ve been thinking and writing about the future of news media for a while. I was unaware of just how swiftly and drastically it is bound to change until I read this from an article in the Atlantic:
Earnings reports released by the New York Times Company in October indicate that drastic measures will have to be taken over the next five months or the paper will default on some $400million in debt. With more than $1billion in debt already on the books, only $46million in cash reserves as of October, and no clear way to tap into the capital markets (the company’s debt was recently reduced to junk status), the paper’s future doesn’t look good.
Wow. Within the next six months, major changes at the New York Times are inevitable. The article then mentions how the Fitch report has a similar dire forecast across the newspaper industry:
Fitch believes more newspapers and newspaper groups will default, be shut down and be liquidated in 2009 and several cities could go without a daily print newspaper by 2010
The article goes on to say that papers that survive will likely exist in online format only. And it talks about the Huffington Post as the new model for journalism.
In the feature of journalism it appears to me that there are two major ways to succeed: primary reporting and derivative editorial.
Primary reporting is what the New York Times and its bretheren have done through the ages: have their own reporters write their own stories. A big part of the problem is that they’ve become over-extended. It was viable for a while as classifieds, auto ads, etc.—a part of their business only indirectly linked to their journalism—were able to support big cost structures. But as the newspaper classifieds business implodes along with general display advertising, the notion of the L.A. Times having bureaus in London, New York, Washington DC, etc. is just crazy. Multiple papers writing nearly the same report on the same story is not going to fly.
News outlets doing primary reporting need to focus on a sector where they can achieve differentiation—a zone of news where they have a compotency to do a much better job than anyone else. A natural fit for newspapers is local news. Other could focus on a particular news type—like Politico on politics. Or you could be a lone ranger columnist type. But the primary reporting a news outlet does must be best-in-class: other outlets will summarize it, link to it, and the reporting will gain enough traffic to justify the costs. Older news organizations will struggle to find the discpline necessary to focus on their differentiation.
The other function will be derivative editorial. The article mentions the Huffington Post as a new model, and this is what I think they do best (their primary material is mostly op-ed and I find it too partisan). In this new age of digital journalism, the Huffington Post editors do a great job of following the news, scouring the Internet, and summarizing, linking to, and remixing the best of what they find. The compotency here is not the quality of the material that their own writers produce, but how well they pick the topics and stories to follow and how well they filter and repackage news content from across the Internet (increasingly blending in non-journalist, everyday-citizen sources) to follow those topics and stories. There is great skill to this. I forsee different papers for different demographic segments, each filtering that best set of content for the interest of their segment. The economics here can work if you attract the audience and keep your costs relatively low by not relying on your own primary reporting but instead on derivative work.
I’m starting to think that this new media world will work. You have to either provide differentiated, best-in-class primary reporting or attract an audience through the quality of your derivative editorial. Some outlets will try to do a blend of both. It is certainly a more chaotic model. But I can see how it can provide consumers a richer news experience in the end.
