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I hate to be a downer on the news industry. Especially because I have a lot of friends who work in it. But when people start suggesting that a new technology is going to help the news industry out of the slump, I gotta throw in my two cents. Worse when my point is proved by the people being the New York Times. I’m sure I have some screwups in here so please feel free to correct me via the comments below.

New technology won’t change the inherent flaw in the business models and/or value propositions offered by news organizations today. New technology isn’t eating newspapers’ lunch. It’s new attitudes held about the value of news sources, the ability of “ordinary” people to publish, the loss of stigma to self-publishing and maybe some skepticism about journalism itself. These are all people problems.

Perhaps every publisher today should consider this question: Are your customers the readership or the advertisers? How should your business change to reflect this? Any organization with a response along the lines “our customers are advertisers and we’re selling the readers to our advertisers” should repeat that to themselves a few times. Sounds pretty ugly doesn’t it?

The Old Model in New Technology Terms

It’s true that newspapers were “saddled” with a business model that had been working well for them for quite some time. It was a model which, if we translated it into web analytics terms, worked something like this:

1. Generate lots of pageviews (increase distribution/readership)
2. Verify the pageviews via a panel-based information source (i.e. get someone like Nielsen to give a best estimate)
3. Charge advertisers more money if the panel-based information source reports that you have a lot of pageviews.

For most publications this was the bread and butter.

Then there was a side business. Since there were few competitors in any geographical or topic-based market, they could charge a nominal subscription fee to each person who bought the paper. This was great because they were collecting money on both sides of the content: collect money for granting the privilege of viewing the content and collect money for the privilege of putting an ad in the proximity of the content. Nice gig while it lasted.

News organizations may have liked to believe that they could charge that subscription based on their authority or quality journalism or some other attribute that was based in the personal skills/intuitions/talents of their editorial departments. That might have been true. But it gets less true every day. Especially as senior journalism staff are let go and replaced by less expensive, newer staff.

In the online media landscape there is admittedly a lot of rough between diamonds. But when everyone you know and trust is pointing towards the diamonds, you find something shiny sooner or later. Those people you know and trust are pointing at the product of news organizations less frequently, perhaps. Instead we’re getting blog posts by true domain experts or people who were on the scene first and so on. This skips the middleman of a journalist to compile quotations (for better and for worse).

Perhaps if the news industry finally settles down whether they want to charge advertisers to be associated with the content or if they want to charge their audience for access to the content, they can come out of their slump.