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

A project of the Shorenstein Center on Media, Politics and Public Policy

Author Archive

The Great Unwatched

The trend of analog marketing dollars becoming digital dimes supporting online content isn’t abating. Earlier this week, David Segal in The Times literally undressed the online video ad market and discovered – wait for it – that marketers may not be getting everything they’ve paid for when placing video ads onto online sites.

One of the most egregious examples, a company selling products described as “mom related” found some of its videos ads were appearing on pornographic websites. Of course, not all ads get played in the wrong places and many brands get great value by using online video spots. But as we explore in Chapter 11, The Advertising Rollercoaster, “Somewhere along the way, the advertising business left it in the riptide and made it to the beach.”

What we meant is that plenty of marketing dollars moved online – and the pull of video ad dollars is helping to continue that trend – but much of that money is no longer going to support online content, especially news sites. We wrote, “Moving ahead, however, it will certainly take significant innovation to alter the strong current of digital advertising away from print and, as audiences continue to migrate online, eventually away from television as well.”

It seems that innovation in the news business – even in video – is still getting pulled out to sea.

Will evolving rules around net neutrality further hamper creating new models for news?

It’s difficult to miss the current debate over what’s known as net neutrality, or the rules that govern how the Internet works. Last week the New York Times proclaimed, “F.C.C., in a Shift, Backs Fast Lane for Web Traffic.” The proposed changes may have implication for all online businesses, and the news business will not be exempt.

Until now, the F.C.C. has maintained that all Internet Service Providers (ISPs) must allow Internet traffic to move back and forth without discrimination based on who owns or who’s requesting the content. (ISPs are the companies that connect you to the Internet at one end of the “pipe” and content providers to the other end.) Now the government is considering allowing ISPs to created paid fast lanes that would allow some content to get to users faster and more reliably than other content.

The fear among critics of this idea is that innovation will be stunted because larger, well-established entities will gain control over the fast lanes and new market entrants will be forever disadvantaged. Proponents, naturally, say this is a long overdue fix to an imbalance in Internet economics and no one will be harmed unilaterally.

As an excellent summary in The Atlantic netted it out, this debate isn’t about neutrality, it’s about determining “where innovation actually begins and what the government should do to encourage it.” I suspect that will be true for new online models for news.

While I’d prefer the government play as small a role as possible in the evolution of models for news, it shouldn’t be lost on us that what gets decided about the future of net neutrality may have a big impact on which business models will be viable for journalism, and which won’t have a chance of succeeding, no matter how clever or innovative.

BuzzFeed, Vice and the next generation in serious news?

Noteworthy story in The Independent by Ian Burrell pointing out the investments being made at Vice and Buzzfeed to fund original journalism, including full-on investigative reporting.

The opportunity that both organisations have identified is to serve the so-called “millennial” audience of twenty-somethings who have supposedly turned their backs on mainstream news providers.

I’m not sure they’ve proven they can withstand the riptide that makes it so difficult for producers of original journalism to make money reliably, but these two built significant revenue streams first and now are seeking to enhance audience loyalty, which should only strengthen opportunities to make money.

“The media is a big place and we don’t need anyone else to fail in order for us to succeed,” he [BuzzFeed’s UK editor, Luke Lewis] said. “We have our own way of doing things and it would not necessarily work for any other publisher.”

Another Take on the “Original Sin” of Publishers

We spend a great deal of time in the Riptide interviews and essay looking at what’s been called the Original Sin of the news business. That is, when news business owners (mainly newspaper and magazine publishers) decided to give their content away without charge on the Web. Our conclusion: It didn’t really matter because a few other entities with very different business models (namely Reuters and Yahoo) did it anyway and disrupted the news business. Recently, I had a chance to re-read Dick Tofel’s marvelous essay on the same collision of the news business and digital technology, and I was reminded that he presents a somewhat different take on this question, and it’s worth reading.

(Semi-Serious Disclosure: You have to buy it for $1.99 on Amazon, because Dick’s not giving this I.P away for free! Fully-Serious Disclosure: Dick and I work together at ProPublica where I’m on the board and he’s the President.)

A view from a Chicago newspaper publisher (and Riptide dad)

When we embarked on the exploration that became Riptide, John, Martin, and I knew that how the news gets paid for and the evolving need for readers to pay for the news they consume would be a central theme. Even as we asked a few early readers to comment on the site, we got feedback on this issue — including from a newspaper publisher in Chicago who also happens to be my dad. Here’s what Bruce Sagan, longtime publisher of the Hyde Park Herald, had to say:

Thank you for this important and fascinating history of journalism and the Internet revolution. Or should I say, ‘Internet Tide?’

Your remarkable essay ends with the questions we are all asking: ‘What is going to happen next to the news business…?’ ‘How will accountable journalism be provided to a democratic republic?’ (We can assume that celebrity journalism will take care of itself.)

Among the commentaries from your interviewees, perhaps Tim Berners-Lee shows the way. We need, he says, a new payment protocol. We need an easy way to send money from the reader to the creators of accountable journalism.

His idea was along the line of voluntary action by the reader. That is probably an unreliable way to build a self-sustaining journalism enterprise. But if there was a new payment protocol that allowed easy payment for subscriptions, or a single copy or a single story (essentially the much-discussed idea in the industry of micro payments), readers could and would support the journalism they want.

It could be argued that the reader has always supported journalism with payment. The traditional view of newspaper economics has been that the reader paid a small fee and the advertising subsidized the journalism and the operation of the publishing company. But if you pull apart the operation of most newspapers in America, you can give a different kind of description.

At most American daily newspapers in the glory days before the web, the editorial budget represented only about 15 to 20 percent of the costs of operations. Thus 80 to 85 percent was spent on production, distribution, selling advertising, administration, etc. In most cases, the gross circulation income paid by the reader covered the cost of the journalism effort. The advertising paid for the ink and paper and trucks and production and distribution personnel.

And so all we need now is a system to create journalism that gets it to the reader without paper, ink, trucks, retail sellers, etc., and have the reader pay us the small amount they have always paid for their journalism. With that we probably do not need advertising to help us along.

Well, we know how to do the first part¬–something called the World Wide Web. The second part is a little more difficult, getting the reader to pay us. But we are learning how to do that. There needs to be a cultural shift; society must accept that payment has to be made for all kinds of news. News is not free.

And there will be a fierce fight over ‘fair use’ as the aggregators and the originators of content try to define copyright for another web abused industry.

But millions of Americans spend about a $1.00 a day or more on journalism products. Granted, they are not all looking for accountable journalism. Would many pay for accountable journalism on the web if it were required and easy?

Let us use your wonderful essay, Riptide. Here is a piece of real web journalism, a long form story about a very import issue in our society. It is well researched and it uses the web in its most inventive way, making it possible for me to dig deeper into the story itself by just clicking on a link (or many, many links) to find out more. Your story itself is an example of what web journalism can be.

And let’s assume that you are part of a journalism site and that it has subscribers who are interested in what this site produces. They pay for part of the cost of maintaining the news staff.

If I was not a subscriber to your news site but was told about the story by a friend (which would happen to me as I am a practicing journalist), and if I could get the story through a simple and easy payment protocol, would I pay a fee for it? And how many thousands are there like me and how much would that add to the income of the newsroom?

What if we had a system of subscribers, plus purchaser’s of just today’s ‘paper,’ plus the sale of an individual story. Could that support a local newsroom that covered city hall and read the school budget or maintained that proverbial ‘bureau in Baghdad?’

Time to find out. We need that new payment protocol.

(Maybe we should talk to the Department of Motor Vehicles in states that run toll roads. They seem to know how to get dimes and quarters and dollars from us in an automated and painless way. Journalism needs its E-Z Pass.)

Bruce Sagan, Publisher, Hyde Park Herald, Chicago, Illinois.