An oral history of the epic collision between journalism and digital technology, 1980 to the present

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Archive for January, 2014

The Bubble’s beside the point (Part II)

Today, The New York Times reports a “major expansion” at the Washington Post. We spent a lot of time interviewing folks at the Post for Riptide. We went back to their earliest online investments in things like LegiSlate, the proprietary online business to business service covering government legislation. We talked to the family scion, Don Graham, as well as Alan Spoon, who was instrumental in setting up Washington Post Newsweek Interactive (WPNI), and Chris Schroeder, who ran LegiSlate then moved over to be WPNI’s first President. We spoke with Caroline Little, Schroeder’s successor and now the CEO of the main newspaper association, the NAA. Even though we decided early on to focus exclusively on the business-side leaders (hence, our desire to see others come in and focus on new interviewees across the broad spectrum of disruption in journalism), we did interview Marty Baron, the executive editor of the Post.

It’s worth reading Baron’s interview as a backdrop to The Times story. I’ve known, and worked with, Marty for many years and respect him enormously, although he can be a prickly business partner at times. He’s a great defender of quality journalism and has worked tirelessly during an era of newsroom downsizings to sustain the kind of journalistic “muscle” required to hold the Big Boys, from the priest abusers in the Catholic Church to the Governor of Virginia, accountable. Now, according to The Times, he’s about to add a lot of strength to the Post’s newsroom.

The Post will introduce several initiatives this year, Mr. Baron said in a memo to his staff on Wednesday. There will be five new politics reporters as well as photo editors, data visualization specialists, news desk staff and web designers. It will add a breaking news desk and a Sunday style and arts section, as well as a revamped Sunday magazine that will be “bigger in dimension and in the number of pages, with a new design and a range of new features.”

In the context of the Riptide, of course, we’d want to explore how this new investment will ultimately pay for itself. My post yesterday summarized three reports on how new entrants like Buzzfeed and Business Insider are rapidly gaining audience and advertising share from the incumbents. We asked the question, can these new players, by applying the techniques of the tech-driven web, build a bridge to the kind of quality investigative reporting that newspapers like the Post are known for? Can they develop the economics to do that?

Jeff Bezos seems to be betting that his newsroom investment will revitalize the sagging fortunes of a once great paper. There are only three ways that he will get there:

1. He can simply run the Post as a philanthropy, absorbing whatever losses he runs as a rounding error against his billions in net worth. If you like this approach, read David Bradley’s Riptide interview. Bradley, the chairman of Atlantic Media, makes a compelling argument that running a place like the Post as a charity is a road to ruin. And I don’t think that’s what Bezos has in mind. He will accept losses, maybe for a long time, but there will be a path.

2. He can go big, chasing Buzzfeed and the Huffington Post for 100+ million monthly users.  And that’s just a start. That’s an interesting path, but one that will require Baron to adapt himself to the rules of the web jungle. If you look at the practices that many of the larger new entrants have followed, they will be anathema to Marty. Not all of them, of course, but there can be no compromises when it comes to this path. Either you play or go home.

3. He can chase The New York Times and the Wall Street Journal. These guys are betting that there’s a big enough paying niche on the global stage for the kind of high quality journalism they offer. Arthur Sulzberger discussed this model with Paul Sagan and me at some length. This would be the most natural course for the Post, but it’s no slam dunk. To support the kind of newsroom that Marty runs, he will need at least a million subscribers to pay him a decent subscription fee each month. He’ll also need to give the kind of people willing to pay for The Times and the WSJ a reason to subscribe beyond “quality journalism.” The Post has a unique niche in American politics, and they could build on that, but there is vast competition in that space.

Personally, I can’t wait to see what happens at the Post. I’ve been excited ever since I heard that Bezos had agreed to acquire it. He’s one of the great entrepreneurs and business leaders of our time, right up there with Steve Jobs. That’s why I’m also hoping that the very next interview that gets done for Riptide is with Jeff.



The Bubble’s beside the point

The New York Times, the Wall Street Journal and the Financial Times all ran articles this week on the rapidly changing digital news landscape. All explore whether the recent funding of several digital news startups might be creating a bubble in the Internet news arena.

First up was David Carr who used Ezra Klein’s announcement that he’s moving over to Vox Media to make the point that Klein’s move is less about escaping old media than “going toward something else.” That “something else” is a native entity that is “optimized for the current age.”  Carr likens places like Vox to the cable programmers who turned entities like CNN (fondly known as the Chicken Noodle Network back then) into “big businesses today.” He writes that places like Vox, HuffPo, Buzzfeed and others “will eventually mature into the legacy media of tomorrow.”

Carr puts a stake in the ground around one huge question explored in our Riptide report: That legacy providers never really embraced technology as central to their transformation. He writes: “In digital media, technology is not a wingman, it is The Man.” This was a major theme in our report and goes back to the earliest days of digital media.  Eric Schmidt was perhaps most direct when he told us that you can’t innovate without engineers, and that legacy news companies simply don’t have them in any quantity. Cathy Yates, an early leader at Knight-Ridder Digital, disagreed. It was the underlying culture, not the talent issue, according to Yates. She told us she hired plenty of engineers, going back to the very beginning of web publishing. In my view, the bridge between these two perspectives was built by Will Hearst. Hearst agreed with Schmidt, but added the crucial thought that legacy media businesses and their boards have never placed deeply technical people in key leadership roles. So even if there’s a CTO or CDO sitting at the table, the essential strategy and direction is run by folks who don’t have the technical fluency to make the crucial decisions about the product portfolio. That can’t work in this rapidly evolving environment.

Will Launder’s Wall Street Journal piece (subscription required) explores the collapsing ad rates at many news sites. He also uses Klein’s departure as a hook, but goes in a very different direction from Carr. One of the sites he focuses on is GigaOm, which recently folded its paidcontent acquisition into the main site. Om Malik, GigaOm’s founder, spoke to us about the many differences between running a legacy operation and a startup. As a funny aside, he mentioned David Carr as someone who might not be affordable for most news startups. Perhaps that’s no longer true, or perhaps David might tradeoff some cash comp for equity, but Carr’s point seems to be that a thousand flowers are blooming, and some of them will turn into beautiful gardens. Launder seems much less sanguine. He closes with a quote from Jim VandeHei, a founder of Politico and another Riptide interviewee:

Mr. VandeHei suggests most investors seeking big returns would be better off betting their money on other sectors, like health care or energy, unless they are “passionate about journalism.”

This brings us to today’s piece by Henry Mance in the Financial Times. Entitled, “News groups face age-old problems with online startups,” the article discusses the increasingly difficult competitive environment for legacy news companies. While Mance mercifully leaves the omnipresent Ezra Klein out of this one, he does mention the omnipresent Buzzfeed, “the US-based website that wants its articles to be shared above all else.” With forecast revenues “of more than $100 million this year,” Buzzfeed is now moving beyond “simple entertainment” and is – according to the BBC’s James Harding – ‘muscling up to become a serious news machine.’ Buzzfeed’s history and strategy is discussed by it’s founder, Jonah Peretti, in our Riptide report, and this brings us back to Carr’s piece.

In the end, the question isn’t just whether successful news startups can satisfy the needs of venture capitalists. As Carr notes, the real issue is quality. Buzzfeed and others (including interviewees Henry Blodget, Arianna Huffington and Nick Denton) are trying to build this bridge. They are making important strides. But so far nothing quite replaces the three news organizations I’ve cited today in terms of sheer editorial “muscle,” to use Harding’s word.  Will that change? If Clay Christensen’s theories are right, it will — just read his Riptide interview to find out.