Why We Need the New News Environment to be Chaotic

The business environment for newspapers continues to be grim. Pew recently reported that advertising revenue rebounded in 2010 for all forms of media, except newspapers.* This might just be a matter of transitioning from print to digital revenues but for the fact that the market values a print reader far more than a digital one. The more or less official label for this problem is “analog dollars to digital dimes”; because of the enormous difference in assumed value per reader, lost value from print is not made up for by gains in digital readership.

The ‘analog dollars to digital dimes’ problem doesn’t actually seem to be a problem. It seems to be a feature of reality. Digital revenue per head is not replacing lost print revenue and, barring some astonishment in the advertising market, it never will. There is no supply-side scarcity to boost margins; power over aggregation has moved from producer to consumer; advertisers prefer selling cameras and shoes on purpose-built sites; readers feel the same about finding jobs and dates; and there are few commercial or geographic restraints on competition. The market values analog readers more highly than digital ones because the market is right.

Seeing this, several people have started looking for ways to exit that market. One of the most widely circulated of these ideas is David Swenson and Michael Schmidt’s proposal that newspapers be subsidized the way colleges or foundations are.* Steve Coll followed this with a suggestion that commercial papers be allowed to reinvent themselves as non-profits.*

The intuition common to such proposals is that advertising revenues can no longer be relied on to fund serious reporting. (Gadget reviews and celebrity coverage, yes, but not the police beat.) Evidence entered for this thesis includes the decline in print’s commercial fortunes*, the attendant downsizing of newsrooms—already 30% smaller, on average, than a decade ago*—and the outright collapse of papers like the Rocky Mountain News, Albuquerque Post, and Cincinnati Post.*

Proponents of market-supported journalism, among them Jack Shafer*, Alan Mutter*, and Jeff Jarvis*, have replied to these non-profit proposals at length, but their common thesis, distilled to its essence, is “Oh please.” This group points out that there is simply not enough philanthropic money to support current news-gathering organizations, and any suggestion that there someday might be isn’t strategy but fantasy.

Evidence for this thesis includes the gap between supply and demand for philanthropic funding* or from the narrowness of funding sources, as with ProPublica’s getting 80 times as much money from its board as from online donations.*

This argument between Journalism as Philanthropy and Journalism as Capitalism (to borrow Jarvis’s phrase) seems like a dilemma, in the literal sense of the word—a forced choice between two alternative premises. It isn’t really, though, because there is also the grandmotherly option: Both groups could be right. It’s possible that for-profit revenue is shrinking irreversibly and that non-profit funding sources won’t make up for the shortfall. The least we can say about this possibility is that it can’t be discounted on current evidence.

* * *

One proposed response is to radically reform newspapers as both organizations and businesses. Here, as one of countless examples, is something from a recent post by Tom Matlack*, the former CFO of The Providence Journal:

[T]here is no longer an uncomfortable ménage à trois between newspapers, readers and advertisers. It’s monogamy at last. Newspapers have to focus all their energy on producing extraordinary journalism—in a form and in substance—which thrills us as consumers. […] So fear not. Your paper is not dead. You just have to demand, and be willing to pay for, a news product worthy of your affections.

Matlack’s sentiment is clearly heartfelt, and creating a high-quality product for a group of loyal and passionate readers willing to pay for it certainly sounds like an interesting business to get into. It just doesn’t sound like the newspaper business.

Here’s what the newspaper business sounds like: the modestly talented son of the founder can generate double-digit margins based on little more than the happy accident that there are people who like football and buy cars living within 30 miles of his house.

That’s the newspaper business, or at least it was until recently. The average US paper runs more soft than hard news, uses more third-party content than anything created by their own staff, and reaches more people who care about local teams than local zoning. Telling the publishers of those papers to create a digital product so extraordinary that readers will pay full freight is a tacit admission that they do not know how to make such a product today.

Much public worry about newspapers concerns a relative handful of excellent dailies with national or international ambitions. Most papers, however, aren’t like that. The New York Times and the Enid, Oklahoma News and Eagle occupy different parts of the news ecosystem, and they face different stresses and fates, but more papers—many more—exist at the News and Eagle end of the spectrum.*

It’s easy to view the current business climate as a culling of the herd, but newspapers are not barbershops; the closing of a hair-cutting business in Oklahoma wouldn’t much affect people in New Hampshire, but the closing of a paper would, because the nation’s news publications are sewn together in a crazy quilt of shared cost and effort.

The News and Eagle, the Laconia Citizen, the Biloxi Sun-Herald, the Deer Park Tribune, and a thousand more such papers are all but monopoly suppliers of local news, they all train young reporters who go on to work elsewhere, they all employ the stringers who are on the scene when a tornado hits, and they all buy syndicated content from the Associated Press or King Features, who in turn lower costs for some publishers while raising revenue for others. When a paper fires reporters or closes outright, it further weakens that fabric.

* * *

Buy a newspaper. Cut it up. Throw away the ads. Sort the remaining stories into piles. Now, describe the editorial logic holding those piles together.

If you’ve picked a general interest paper, this will be hard. I recently learned, from a single day’s paper, that a bombing in Kirkuk killed 27, that Penelope Cruz has only good memories of filming Pirates of the Caribbean while pregnant, that many U.S. business hotels are switching to ‘shower-only’ bathrooms, and that 30-year fixed mortgages fell from 4.63% to 4.61% the week before.

The rationale for creating such a bundle went something like this: “We will print enough content to fill the hole left after we’ve sold the advertising space. We will include content proportional to the amount and intensity of reader interest, modified somewhat by editorial judgment. Overall, the value of the bundle will be more than the sum of its parts.”

Many people who worked for newspapers didn’t think of this as something that happened to work well in certain cities and towns during a particular era, but as something real: “Of course Ratko Mladic’s arrest belongs in the same package as a photo spread on ornamental grasses! How else would you do it?” For all that selling such a bundle was a business, though, people have never actually paid for news. We have, at most, helped pay for the things that paid for the news.

So long as newspapers faced little competition for advertisers or readers, this was a distinction without a difference, but as papers are being sundered by the internet, we can see how tangled the system always was. Outside a relative handful of financial publications, there is no such thing as the news business. There is only the advertising business. The remarkable thing about the newspapers’ piece of that business isn’t that they could reliably generate profits without accomplishing much in the way of innovation—that could just as easily describe the local car dealership. The remarkable thing is that over the last couple of generations, those profits supported the fractional bit of those enterprises that covered the news.

This subsidy relied on cultural logic peculiar to newspapers; publishers were constrained not just by their investors but by their editors (who expected the paper to be ethical in the short term) and by their families (who expected the paper to be viable over the long term). In return, a publisher could extract some of the value of the paper in prestige and sinecure instead of cash.

This system was never ideal—out of the crooked timber of humanity no straight thing was ever made—and long before Craig Newmark and Arianna Huffington began their reign of terror, Gannett and Scripps were pioneering debt-laden balance sheets, highly paid executives, and short-term profit-chasing. But even in their worst days, newspapers supported the minority of journalists reporting actual news, for the minority of citizens who cared. In return, the people who followed sports or celebrities, or clipped recipes and coupons, got to live in a town where the City Council was marginally less likely to be corrupt.

Writing about the Dallas Cowboys in order to take money from Ford and give it to the guy on the City Desk never made much sense, but at least it worked. Online, though, the economic and technological rationale for bundling weakens—no monopoly over local advertising, no daily allotment of space to fill, no one-size-fits-all delivery system. Newspapers, as a sheaf of unrelated content glued together with ads, aren’t just being threatened with unprofitability, but incoherence.

* * *

This fall, I’m joining NYU’s journalism program, where, for the first time in a dozen years, I will teach undergraduates. Someone who turns 19 this year will have not one adult memory of the 20th century; for them, the Contract With America, the Monica Lewinsky scandal and the first Gulf War are roughly contemporaneous events, just as, for my 19 year old cohort, the Summer of Love, the Watts’ riots, and Kent State all seemed to have happened in that one busy month we called The 60s. When it comes time to explain the media landscape of the 20th century, I will be teaching my own youth as ancient history.

I could tell these students that when I was growing up, the only news I read was thrown into our front yard by a boy on a bicycle. They might find this interesting, but only in the way I found it interesting that my father had grown up without indoor plumbing. What 19 year olds need to know isn’t how it was in Ye Olden Tymes of 1992; they need to know what we’ve learned about supporting the creation and dissemination of news between then and now. Contemplating what I should tell them, there are only three things I’m sure of: News has to be subsidized, and it has to be cheap, and it has to be free.

News has to be subsidized because society’s truth-tellers can’t be supported by what their work would fetch on the open market. However much the Journalism as Philanthropy crowd gives off that ‘Eat your peas’ vibe, one thing they have exactly right is that markets supply less reporting than democracies demand. Most people don’t care about the news, and most of the people who do don’t care enough to pay for it, but we need the ones who care to have it, even if they care only a little bit, only some of the time. To create more of something than people will pay for requires subsidy.

News has to be cheap because cheap is where the opportunity is right now. For all that the Journalism as Capitalism people can sound like Creflo Dollar mid-sermon, they are right to put their faith in new models for news. If for-profit revenue is shrinking and non-profit funding won’t make up the shortfall, we need much cheaper ways of gathering, understanding, and disseminating news, whether measured in information produced or readers served.

And news has to be free, because it has to spread. The few people who care about the news need to be able to share it with one another and, in times of crisis, to sound the alarm for the rest of us. Newspapers have always felt a tension between their commercial and civic functions, but when a publication drags access to the news itself over to the business side, as with the paywalls at The Times of London or the Tallahassee Democrat, they become Journalism as Luxury. In a future dominated by Journalism as Luxury, elites would still get what they need (a tautology in market economies), but most communities would suffer; imagine Bell, California times a thousand, with no Ruben Vives to go after the the politicians.*

The thing I really want to impress on my students is that the commercial case for news only matters if the profits are used to subsidize reporting the public can see, and that civic virtue may be heart-warming, but it won’t keep the lights on, if the lights cost more than cash on hand. Both sides of the equation have to be solved.

* * *

Real news—reporting done for citizens instead of consumers—is a public good. This is true both in the colloquial sense of ‘good for the public’ and in the economic sense of ‘best provisioned for a whole group at once.’

The supplier of last resort for public goods is usually the government, but in the United States, public funding of media has always been politically fraught, outside a few subsidies like reduced postal rates. This leaves us the problem of producing a public good without much in the way of public monies.

Taking cash from advertisers is one way to do this, though a less good one than it used to be. As Jay Rosen points out*, many other ways are possible: NewWest.net gets money from its conference business*; The Guardian from the Scott Trust*. Donations are still another: some organizations have a syndicate of large donors, as with ProPublica * or The American Independent*. Others have many small donors, as with the crowdfunding of Spot.us projects, or the listener donations to NPR.

And, critically, subsidy can be in savings rather than cash. Some of what professionals did in the old model can now be done in combination with amateurs, or crowds, or machines: MAPlight* and PoliGraft* and Sunlight’s Lobbying Tracker* couldn’t track links between money and politics without online databases; the Charlotte News Alliance* and the Tuscon Citizen * rely on local bloggers; the Davis Wiki* and the the Oil Spill Crisis Map* provide structure to user-contributed material; Tackable is betting that the first photographer on the scene will be a citizen with a phone*.

None of the models being tried today are universally adoptable; the most we can say is that each of them happens to work somewhere, at least for the moment. This may seem like weak tea, given the enormity of the current changes, but if our test for any new way of producing news is whether it replaces all the functions of a newspaper, we’ll build things that look like newspapers, and if replicating newspapers online were a good idea, we wouldn’t be in this mess in the first place.

If we adopt the radical view that what seems to be happening is actually happening, then a crisis in reporting isn’t something that might take place in the future. A 30% reduction in newsroom staff, with more to come, means this is the crisis, right now. Any way of creating news that gets cost below income, however odd, is a good way, and any way that doesn’t, however hallowed, is bad.

Having one kind of institution do most of the reporting for most communities in the US seemed like a great idea right up until it seemed like a single point of failure. As that failure spreads, the news ecosystem isn’t just getting more chaotic, we need it to be more chaotic, because we need multiple competing approaches. It isn’t newspapers we should be worrying about, but news, and there are many more ways of getting and reporting the news that we haven’t tried than that we have.

57 Responses to “Why We Need the New News Environment to be Chaotic”

  1. This Week in Review: Murdoch’s mess keeps growing, aggregation ethics, and giving context to Google+ « OMCIM: Medios cultura de la paz y la legalidad Says:

    […] Finally, NYU’s Clay Shirky gave us another thoughtful essay on the unbundling of news and why the news ecosystem needs to be chaotic right now. In the end, […]

  2. David Cohn Says:

    As always – a great piece Clay. And thanks for mentioning Spot.Us. We are honored/happy to be part of the chaos.

    One thing that struck me in this piece (which I was happy to read) was pointing out that the choice between Journalism as Philanthropy and the Market Supported Journalism.

    I worked for (and have nothing but respect) for guys like Jarvis, Mutter, etc. And yet when starting Spot.us – the nonprofit road just made sense. After all, I’m asking people to donate money for a story that EVERYONE in the public will be able to read. I’ve talked with Jarvis and others about this and sometimes they made it feel like an either/or choice. As though somehow by doing a nonprofit I made a statement about my thoughts of the future of all news. It was really just a practical decision. I tacitly reject that it has to be one or the other. There will always be both. I think the “journalism as nonprofit” world has some strengths that the for-profit side doesn’t and vice versa.

    On another tangent. You are going to be an awesome undergraduate professor. I have a few from when I was at UC Berkeley that blew my mind. I hope you do that for some 19 year olds at NYU (crazy to think they don’t have any adult recollection of the 20th century).

    Next time we can – I’d love to sit and chat more.

    Best
    David

  3. Jason Stambuch Says:

    Good article. Especially with the whole murdoch phone hacking. Its hard to trust any media today with all the perverse technology reaching into our lives. For more shelf life info check http://www.eatbydate.com

  4. Howard Owens Says:

    I’m glad Brooke brought up the NYU conclave, great event and it would have enlightened Clay on a number of successful online models, including for-profit (and profitable), advertiser-supported local news sites, which Clay completely ignored in his analysis and would upset the apple cart of his thesis.

  5. Peter St Onge Says:

    You seem aware that he who pays the piper calls the tune. As in government subsidy is a very short step from government editorial dictation.

    However, government can subsidize from the other side, by simply publishing data about itself (“sunshine”). Bell city’s salaries, crime-clearance in Detroit, Pentagon prices paid, these are all more likely to be reported if the government simply publishes its data, then let newsgatherers (amateur or professional) have at it.

    Obviously you’d need a strong watchdog (GAO is a candidate), and that watchdog would need citizen monitoring. Watching GAO gets you into a scope of work that philanthropy could manage.

    I imagine this sort of subsidy, of data-production rather than giving potentially corrupting money to newspapers, is something both sides could get behind.

  6. Renee Says:

    A great thought provoking article and comments. Hadn’t really thought before how the chaos in the media could actually be a good thing. The idea of a subsidy is an interesting one, however I’m not sure how exactly it would work in reality.

  7. jupiterjenkins.com » Blog Archive » summer reading summer not Says:

    […] Why We Need the New News Environment to be Chaotic « Clay Shirky […]

  8. Un-bundling is good for consumers, but bad for marketers and content creators « People like to share Says:

    […] his article called “Why We Need the New News Environment to be Chaotic“, Clay Shirky offers some suggestions on what the newspaper business should be when it grows […]

  9. Why We Need the New News Environment to be Chaotic « Clay Shirky | Knockemdown Productions Says:

    […] Why We Need the New News Environment to be Chaotic « Clay Shirky. […]

  10. Michael Strong Says:

    The notion that journalism “needs” to be subsidized in the age of the internet is simply absurd. Has no one read Mill’s argument in “On Liberty” regarding the entire rationale for freedom of speech and freedom of the press? Let everyone argue, and no technology has ever been as fabulous for that as the internet.

    The real reason the Old Media journalists and the Old Media journalism professors want subsidies is first and foremost self-interest, but beyond that they have an Old-fashioned faith in “deliberative democracy,” a notion that is epistemologically implausible for a community larger than, say, 10,000 people (exact estimates of the upper-end of a plausible scale for deliberative democracy vary, but 10,000 is probably on the high end).

    For countless examples of empirical documentation of the epistemological constraints faced by normal human beings trying to understand political issues, see dozens of articles published in the journal Critical Review and the literature cited by those articles. For an introduction, see this article by Ilya Somin, “Deliberative Democracy and Political Ignorance,”

    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1694650

    or if Somin feels too polemical try Jeffrey Friedman’s more abstract “Ignorance as a Starting Point: From Modest Epistemology to Realistic Political Theory,”

    http://www.criticalreview.com/crf/jf/19%201%20starting%20point.pdf

    For anyone who respects empirical evidence, once one starts examining the epistemological demands required for romantic notions of “deliberative democracy” in light of real world human cognitive constraints, it becomes clear that the entire notion is as empirically implausible for large-scale societies as is a perpetual motion machine in physics.

    This is not a “new” problem. Already in the 20th century “deliberative democracy” was an empirically impossible notion, long, long before the internet. Walter Lippman, one of the founders of the New Republic, pioneered this line of thought in 1922, and as evidence has come in over the ensuing decades, it has only more deeply confirmed his most pessimistic conclusions regarding the nature of public opinion, despite dramatic expansions in the number of years, percentage of population educated, and overall cost of education.

    Democracy is a fabulous way to prevent the most horrible errors such as the massive famines, death camps, and large-scale wars of aggression that are characteristic of totalitarian regimes, but one should no more imagine that democracy is a finely-tuned instrument for determining the public good than that a hack saw is suitable for brain surgery. The American founders knew that democracy was a suitable tool for preventing tyranny, but not suitable for the creation of a republic suitable for promoting life, liberty, and the pursuit of happiness. This is why they created a constitution and a Bill of Rights, deliberate limitations on democracy, so that our system would function despite the inherent limitations of democratic decision-making. Sadly, the more decisions are made through electoral politics, rather than by means of constitutional principles, the more serious the epistemological flaws of democracy become. See Jonathan Rauch’s “Demosclerosis” on this point, or Mancur Olsen for the deep theoretical version.

  11. links for 2011-07-11 « Blarney Fellow Says:

    […] Why We Need the New News Environment to be Chaotic « Clay Shirky (tags: journalism debate) […]

  12. Jack C Says:

    It seems to me that the most likely solution will have to leverage the “strengths” of the current media environment, namely, the volume of content being produced. Why not take the biggest weakness and turn it into an asset?

    In addition to the suggestions you’ve outlined, there is a real role for data curating here too. In the explosion of production, there is (very likely) signal to be found buried in the very mass of noise being created.

    Put another way, three blind men touching an elephant may not be able to arrive upon the truth. However, I’d wager that curating the reports of 100,000 blind men touching an elephant would.

  13. The Grand Rapids Shootings and the Social Media Future for First Responders « Derek DeVries – Imprudent Loquatiousness Says:

    […] We now have access to a wealth of social data about the victims and perpetrators of events like this.  Roderick Dantzler’s Facebook profile was found and a link to it tweeted during the crisis.  Law enforcement investigators and journalists have unprecedented access to background information (and new responsibilities in using it – like taking the time to understand the context of content that is published). As social media continues to conquer a larger share of how humans communicate, I’m sure there’s probably a role within any emergency response organization for a designated social media public affairs officer. One could see the value of someone whose job it is to quell rumors in real-time, give “official” endorsement to news reports, add the first response side of the story to the equation, answer questions, and even capitalize on positive sentiment (for example, there was a huge outpouring of support for the Grand Rapids Police Department for their handling that could have turned into an opportunity to let grateful residents know how they can help support the police and/or their families through a charitable contribution or other community action). Suggested Reading: Apropos of this conversation, Clay Shirky just blogged about “Why we Need the New News Environment Needs to be Chaotic“ […]

  14. Mary Morgan Says:

    Since launching The Ann Arbor Chronicle in 2008, we’ve given much thought to the issues you raised here, Clay. (I was an editor with our community’s traditional newspaper, the Ann Arbor News, but quit before its owners decided to close it down in 2009.)

    We’re making a living from our online-only news site with a combination of local advertising and voluntary reader subscriptions. People have been willing to support our hard-core focus on local government and civic affairs – even though The Chronicle’s long-form, wonky style runs counter to established online conventions. We’re also convinced that the “small giants” model needs to supplant the goal of growth at all costs – we’re not looking for VC support, and never will.

    But still, somebody needs to pay the bills – and not everyone wants to read an in-depth report on city council. (Though I’m constantly surprised at how many do.) Dave Askins, The Chronicle’s editor, wrote a column last year describing why people might support a publication like ours. For many, they want to delegate the work of being informed about civic affairs to someone else. These are people who take comfort from knowing that someone is attending the meetings of public bodies and writing down what’s said and making some kind of sense of what happens there.

    http://annarborchronicle.com/2010/03/02/18th-monthly-milestone/

    As efforts like ours and other non-traditional publications gain traction, I’m hopeful that our society will emerge from this transitional time far better served. It just might take a while.

    Mary Morgan
    The Ann Arbor Chronicle

  15. kirk holden Says:

    One strange thing I notice about the ‘pile of stories’ I mentally clipped from the sea of ads – the tenure of every story is different. The unrest in Damascus is a day by day or hour by hour emergence. The Kim Kardashian bridal gown spread lasts until Kim goes shopping again. Every online publication respects this difference. The style section doesn’t change every day but is more like the old Sunday Style Supplement – it stays on the web coffee table all week.

  16. Mark Rushton Says:

    I spent over a decade working in the “professional” media and have a PhD in Development with a focus on information technology. Here’s what worries me about the “chaotic” approach to news… ethics, training and responsibility. I have my (very large) share of issues with corporate media and the folks who pull the strings behind ’em (Rupert Murdoch, anyone?).

    BUT… it’s quite disheartening to see bloggers-for-hire, like certain folks in Cuba receiving paycheques from the U.S. State Department and the share of the $20-million+ so-called “democracy funds”, who are hailed as “heroes” and persons “putting their lives at risk” to “tell the truth”. Hah!

    “Citizen journalists” who are well-intentioned but untrained in journalism ethics and law are bad enough – but those who are supported with a specific political purpose in mind, that’s quite another matter.

  17. Jeff Stanger Says:

    “It isn’t newspapers we should be worrying about, but news.” I’d go further to say that it isn’t “news” we should be worried about, but information. “News” (breaking news, headline news, etc.) seems capable of fixing itself through other channels. Deeper, thematic treatment of issues of public importance (I’ll call this “information”) seems to be where we should focus our energy. And for that, I think the solution will come down to non-media — the vast network of subject matter experts in nonprofits, foundations, academic institutions, research organizations, etc. We need to support their activities and digital communication capacity. The information is there, it’s just not made for public consumption. It needs to be.

    Clay, you put more eloquently (and in more than 140 characters) what I tweeted awhile back during #wjchat: “Journalism has a nonprofit mission (public service) with for-profit obligations. Something must give.” I think that something is that we need to look outside the institution formerly known as “the media” for alternative information sources that frankly already exist. We just need to shift these sources’ self-perception and build their digital communication capacity.

  18. Warren Whitlock Says:

    The myth that we need investgative journalism has been perpetuated by those in old media to justify their existence. Journalism has never been a profession demanded by the people. It’s was created to produce more readers for the ads.

    Your young student know we can live without newspapers, so teach them how messages spread without centralized control, and how they can move us forward without this myth

  19. John Duncan Says:

    Superb piece of writing.

    As you point out the philanthropy model is a (disguised) mainstream model already used all over the world. The second-hand car dealers of Britain generously support the Guardian via the latter’s ownership of Autotrader which until recently looked like it could pay whatever bills the Guardian could generate. Sure, this is passive unwitting philanthropy but philanthropy nonetheless – the car-dealers don’t get anything commercially valuable from the subsidy they provide, but it has brought immense value to British society. Thank you Dagenham Motors.

    A model in which competing rich people produce content for their own prestige and a desire to be influential in their chosen social group, isn’t that different from the traditional newspaper model in many parts of the world. In fact the rest of the UK upmarket segment consists of a paper owned by the Barclay brothers (the Telegraph) which is trivial to their commercial interests but politically and socially invaluable. And I’m guessing the Lebedevs value the Independent’s influence over its ever-declining audience.

    The overt philanthropy model at least makes the legitimacy and prestige that comes from owning a major or minor news operation more democratic and transparent. All moderately wealthy people can now do it if they wish. Yay. The problem becomes sifting through all this content and working out what to trust and what to ignore, ie the same problem we’ve always had.

    Which is why I think you’re right about chaos being good. What is being constructed now isn’t a new news industry as much as a new news ecosystem and ecosystems don’t get mapped out and planned into existence, they evolve according to what survives a brutal relentless process of experimentation and selection. We have barely started this stage of the re-organisation of the news ecosystem. Buckle up.

  20. Brooke Kroeger Says:

    I think you would have found strong support for this position, Clay, among the 70-plus stakeholders who gathered at NYU Journalism Saturday for our Hyperlocal Conclave. And from all that I heard during a very full day, I don’t think that would exclude those pulling the bulk or at least a substantial portion of support for their sites from advertising.

    The participants all had meaningful track records of anywhere from less than a year to up to seven years online. Present were the operators of suburban sites such as baristanet.com; citywide sites like newhavenindependent.com, sacramentopress.com, and rvanews.com; community-based sites like berkeleyside.com, sheepsheadbites.com and thelodownny.com, and even a rural one, thebatavian.com. We got an excellent online tour of NPR’s city/topic-based sites. The Local sites of CUNY and NYU, with our NYTimes.com affiliation, were well-represented, of course, as were others with newspapers in their sphere such as philly.com, newsday.com, rvanews.com, and the Globe’s boston.com, which is among those in the act of ambitiously scaling large throughout that city’s suburbs.

    Contradicting the common perception from some camps, several said they are having solid success with local advertising as a primary revenue stream.

    The striking commonalities in this disparate group? All expressed commitment first and foremost to the production of the quality, civic-minded journalism you highlight but were no less mindful of the need to generate revenue. And all are directly or indirectly engaged in various forms of subsidy.

    Subsidy in what forms? Angel investors/backers who put the journalistic mission first; founders and operators who forego reasonable compensation for the sake of the building the enterprise; someone involved (not directly compensated) who relentlessly pursues grants, individual contributions, and foundation support (let’s face it; a job in itself); ad salespeople working on commission only; un- or minimally compensated reporters and writers, including highly established professionals; subscription, membership and reward plans, events planning and producing; product sales; and/or, as in our case (and I experience the value of this over and over again with The Local East Village), institutions like NYU and the Times that share the values and aspirations of the project, that see the work as core mission, and thus make the natural move to providing that all-important direct and indirect backend support –what you describe as “savings rather than cash.” The value of this is incalculable.

    As you say so well: “Most people don’t care about the news, and most of the people who do don’t care enough to pay for it, but we need the ones who care to have it, even if they care only a little bit, only some of the time. To create more of something than people will pay for requires subsidy.”

    And on a personal note, I want to say how very, very glad I am that you’ve crossed over – I mean Broadway and Lafayette – to join us at 20 Cooper Square.

    Brooke

  21. Tristan Louis Says:

    Clay,

    First of all, great piece. However, I think the landscape is wider than what you are looking at. a couple of years ago, I threaded some of the ground you are covering and came up with the conclusion that news (and, by extension, media) needs to be looked at across 3 dimensions (see http://www.tnl.net/blog/2009/09/25/the-three-dimensions-of-media/ ):

    The first axis goes from enter­tain­ing to informative
    The second from pur­chased or subsidized
    The third from mass gen­er­ated or professionalized

    Because the news landscape is wide ( celebrity news, for example, is a form of entertainment to most while it is business news to a few people), it needs to be measured across those different dimensions.

    It’s not a perfect model but it’s one that is not that dissimilar from yours. I’d love to hear your thinking on it.

  22. JLD Says:

    A well-written summary of current thought, but not much that’s new. The problem remains intractable, and “ideas” such as going to a nonprofit business model based on getting big grants are just wishful thinking (I’ve got a novel nobody is reading either – care to donate to my cause?).

    What isn’t mentioned is that the whole idea of the “journalist” is outmoded – the profession is run by jack-of-all-trades who have precious little background in any professional discipline. Read an article about a country you’ve lived in, or a company you’ve worked with and it becomes immediately apparent that most reporters are woefully unable to understand the full implications of their story, or simply get them wrong. Why pay for that?

  23. Berend de Boer Says:

    What newspapers are struggling, aren’t we just talking about the American ones (America is not the world, repeat).

    Are British newspapers struggling?

    On raising money for serious reporting, just one example: Michael J. Totten.

    These things can work. Newspapers as aggregators are dead.

  24. Mark R. James Says:

    Great article.

    The “police beat” has never paid its own way. It used to be subsidised with classifieds, and a greater concentration of advertising in other sections of the paper. This is harder today with unbundling, but serious journalism can still contribute to the bottom line if a masthead can parley the reputation it accumulates to gain greater respect and attention for its more commercial material. Respected commercial pieces can earn income not only through page views (via advertising), but through donations, deferred charges, and affiliate-like payments whenever the journalism helps a person make a commercial or consumer decision.

    Your article also describes how advertising drives journalism to fill as much space as possible. This is certainly true in print, but this concept has unnecessarily carried over to online. Constantly-revised topic-based online articles (wiki-journalism) can be just as profitable as multiple pieces because the ads around them can change, and because new people can continually discover them.

    Not only does journalism have to move away from a series-of-articles model (like this blog), it has to treat user comments as more than a sop, where the writer has long left the building.

  25. Jay Currie Says:

    Niche!

    Subsidizing a bricks and mortar department store ’cause everyone is finding what they want online is nuts.

    I’m 55. Do I ever see a person under thirty reading a dead tree paper…never. Nor do I.

    I graze the internet with the rest of the herd. If I want to see what Kate wore I go to the whatkatewore.com blog. If I am interested in canadian junior mining stocks I go to my site, resourceclips.com. If I want to check in on US politics, Memeorandum, climate change, whatsupwiththat.com.

    All are fresher, smarter and way more on the news than dead tree media which no one sensible reads anymore.

    Subsidy will just ensure that the same dead opinions and bleeds/leads news judgement hang around for another decade.

    The dead tree business is done.

  26. Jake Says:

    I have backgrounds in: print journalism, finance, Internet infrastructure. Now happily retired at a fairly young age. From time to time I will read articles like yours when, for whatever reason, they pop in front of my eyes. If I’m in the right mood, they’ll cause me to review my personal why-the-newspapers-are-dying thesis.

    I won’t spit it out here, because I’ve told it to so many people who, as it turned out, never cared about the news to start with, that I’ve decided I’d better husband my efforts, as sporadic as they might be. After all, leaving a long comment on some guy’s website: Why bother?

    Instead, I will say this, as briefly as I can, with the preface that I truly have no ax to grind or interest to serve, and therefore in spite of any impulses to the contrary you should take my views to be independent and “disinterested,” in the old-school sense:

    1. Your analysis is glib and shallow, albeit with a few interesting points to make.

    2. Gregg Freishtat sounds like every other VC-appointed, jargon-puking CEO I’ve ever met. Which, trust me, is a shitload of them.

    3. I see no insight here into the underlying fundamentals of what drives demand for what newspapers have sold. Honest to God, none. In the end, you’re as addled by the newer delivery methods as the other guys are addled by the older ones.

    4. I have yet to find a step-by-step description of the microeconomics of the online information world. Everyone knows how newspapers make (made) their money, but no one has ever described to my satisfaction how the online information merchants make theirs, even if it’s a whole less.

    I have written much more than I intended to. You have my e-mail address, attached to my comment. If you are more than a millimeter deep, contact me and we’ll chat on the phone.

  27. News vs. newspapers « Sophistick Says:

    […] thinking about Clay Shirky’s latest discussion of the newspaper business. His basic contention is that a newspaper is an arbitrary collection of things designed to sell […]

  28. Zora Says:

    Dunno if anyone has tried news that’s free to read, but costs money if you want to comment. Seems that would get some people to pay up.

    Would require that comments be moderated, of course. Nasty comments disemvoweled or removed. Also, it would be a good idea to have a cess pit into which comments that had been removed could be poured. The SFRT (Science Fiction Round Table) on the long-dead GEnie online service had such a cess pit, entitled Duelling Modems. It had its own fans, who waited for new posts (usually flames) to arrive and then rated them for offensiveness. It was bad enough to be bumped to Duelling Modems, but having a full complement of snark dumped on one, once there, was a disincentive to bad behavior.

  29. Why We Need the New News Environment to be Chaotic « Clay Shirky « MediaBlawg = За Нови медии Says:

    […] Why We Need the New News Environment to be Chaotic « Clay Shirky. […]

  30. Robb Topolski Says:

    TECHNOLOGY has been dislocating traditional business models and industries for the past EIGHTEEN decades.

    Before any of us were alive:

    The early newswire services, at one point, were the wire telegraph operators — which failed badly because telegraphers do not make good reporters. Their independent and professional replacements struggled to pay the fares demanded by the telegraph services but there was sufficient demand by daily evening papers racing to get the market news out by early afternoon. Suddenly, cheap radio telegraphy took over. Very disruptive to the telegraph industry.

    Later came radio and television, and the evening broadcasts ate the afternoon newspaper for dinner, cutting deeply into the revenue of the newswires and papers.

    Then all of us were born.

    Now we have news 24 hours a day and a ton of models. History is repeating itself as self-published news is being tried again and the results are similar: reporters are frustrated that they also have to do so much work to market and advance their story across the social network.

    This will change. It always has.

  31. Sunday Reading « zunguzungu Says:

    […] Clay Shirky, on why we need the news room to be chaotic. […]

  32. Alex Schleber Says:

    Good stuff, and yes innovation/disruption is a good thing. Despite all of the mystery, there clearly are some solutions or at least starting points:


    “A lot of themes that I’ve hit upon over the past several months, the most important being complete and utter Content Overabundance. Only now are newspaper publishers (slowly, many of them probably too slowly) waking up to the fact that on the Web, tons of options exist for both news content, and all other content in general. Oops.

    “Online,
 newspapers have struggled to recreate the kind of loyal relationship
 with readers that they had in print.”

    You don’t say. I guess that those readers weren’t quite so loyal after all, sounds like it was more about lack of choices in localized monopolies, and false, news-mogul-y feelings of information omnipotence…

    Here’s what still has a chance of working:

    0) Fully understand and embrace the concept of Content Overabundance (until you do, the next points won’t matter). []

    1) Build and/or maintain strong, credible news brands with a true brand identity (ideally using Archetype Branding a la Apple).

    2) Make sure you allow anyone into your news content ecosystem, Pay Walls or any other similarly misguided schemes that violate 0) are ecosystem poison. []

    3) Intelligently monetize your ecosystem in the ways that remain for digital #Freeconomics: With ads like these []

    and ideally using both Impulse Purchase pricing and the New Generatives: []”

    [] Further links here: http://alexschleber.amplify.com/2011/07/06/dinomedia-awakening-too-slowly-its-time-to-embrace-fly-by-news-readers/

  33. Brian Cubbison Says:

    It sounds like much of the news might be done on an individual level by retirees, hobbyists and starving artists, who need very little money for their pursuits. Maybe enough to put gas in the car. And journalism school might be evening classes at the local rec center, along with quilting and computer classes. That’s not necessarily a bad thing. But even journalism professors would be disrupted.

  34. Embracing Chaos « (Re)Structuring Journalism Says:

    […] Shirky has a great post on his blog that neatly summarizes the woes of the news industry – it’s a great […]

  35. Ben Colmery Says:

    Why not focus on creating more demand?

    This is what bugs me about the journalism industry. It is weighted almost entirely toward creating supply, when it is the lack of demand that is leaving the industry marketless.

    This is where there has been little foresight or investment, if anything. Few Americans receive any sort of media literacy education in primary or secondary education, and as a result, are left to their own devices to become critical consumers of news. That is not a formula for future market success.

    The industry is expending so many resources studying what audiences want, and pushing journalism in that direction. Why not invest, instead, in shaping what audiences want?

  36. Why the chaos in media might be a good thing — Tech News and Analysis Says:

    […] can be done about this state of affairs? Media analyst and journalism professor Clay Shirky says not only is there nothing that can be done about it, but it may actually be a good thing, because it will help spur innovation. Let’s hope he is right, because there is plenty of […]

  37. RAD Says:

    Your best writing, Clay, has a strong economic component (in my opinion) and this piece is no exception.

    Of the three truths about the future of news 1) Subsidized, 2) Cheap, and 3) Free, I am not convinced Subsidized is true, especially in the short term. In the current chaotic transition I think Subsidized disrupts the process required to discover Cheap. I am not confident of my own or anyone else’s ability to decide what constitutes “real news”. My issue is not the subsidy itself it is the process behind the allocation.

    Picking winners implies condemning others to fail when they otherwise might not.

  38. Newsroom With A View Says:

    […] another piece of what should be required reading for journalists, this time arguing the benefits of different news organizations trying many different things to either raise new revenue or reduce the …. Much of the argument repeats the plain-English explanation of the economic underpinnings of the […]

  39. Rob Kall Says:

    I wrote about this almost two years ago in my article, Separating the Journalism Baby from the Newspaper Bathwater http://bit.ly/ZMPdT

    We need to invest in investigative journalism because it pays back on the investment by identifying graft, waste and corruption. Fund it with “subsidizing grants” and reward with bonuses the reporters whose writing saves money or is widely read– have lots of ways for journalists to earn “reputation” Consider our $15 trillion economy and consider that journalism covering it, looking for areas that need disinfecting “light” is worth one tenth of one percent of that economy– $15 billion invested in journalists, with health care. That would pay $60,000 a year to 200,000 journalists, with $3 billion left over for bonuses that crowd sourcing would decide who would receive. And sports and entertainment coverage would not be subsidized.

  40. Richard M. Anderson Says:

    Here is another example to consider.

    Two Mindsets. Two Products. Two Platforms. http://sustainablejournalism.blogspot.com/2011/02/two-mindsets-two-produts-two-platforms.html

  41. Sherwin Says:

    Subsidies are a good idea. If we want news to be more public relations and advertising, than it has to look more like science. And science needs to be funded by more than just investors.

    Even the traditional sciences struggle with market influences, which is why subsidies are still important. I present, as evidence of this, the disproportionate amount and quality of the scientific research in the pharmaceutical industry. Too many of the results are sullied by a profit motive, and too many of the projects and products are invented and guided by profit motive.

    But so too with news. Many newspapers have stopped acting like responsible presses as they work to keep the lights on, by becoming entertainment and courting favour with financially powerful interests.

    All of that to say, that it makes sense to me to remember that the point is news, not newspapers. This is a liberating conceptual move. I mean that. Maybe news has only ever been scientific reporting in the service of democracy. And unlike astrophysics, it’s relatively cheep to produce. I mean, you don’t need a frickin’ super collider to do community reporting. You need other scientific skills and infrastructure but probably not in the scale of other sciences.

    Huh. The more I think of it, the more I like the sound of “journalist as scientist.” Editors are peer reviewers. And all of the duties and responsibilities that come with this also inspire the communities they serve to support the project.

    An end to newspapers as we know them, could very well produce a higher standard of news.

  42. Devin Howard Says:

    That was fantastic. If I can ask a question:

    How do you think that Aggregation, both as a methodology and as an emergent skill or trade, is affecting the news environment? Specifically, I am wondering if the aggregate ‘feed’ model so popular among New Media outlets such as Gawker can work symbiotically with larger, more traditional, more professional news organizations to increase readership and as a channel of information, ideas, commentary, sources etc.?

  43. Kevin Kelly Says:

    I find myself in agreement all around, particularly with the notion that we’ve seen the end of mass news media having a uniform business model, or livelihood. How many people in the new economy have the same livelihood?

  44. Jose Moreno Says:

    The “Gutemberg Parentesis” hypotesis – don’t know if ou heard of it – is propably the most fresh idea I heard recently about the future of news. The special report published yesterday by The Economist folows that same route. It’s possible that the business of news is not really the natural condition of news and that the end of scarcity on the offer side really puts an end to any viable possibility of a news business model.

    But – that’s the main flaw of the The Economist’s report – we must not look at the past to forsee the future. We will not go back to coffee shops! Twitter and Facebook are the new cofee-shops and the conversation we had with a couple of friends we now have with hundreds chatting and thousands hearing and spreading the news. The conversations we had oraly we will now have digitally. And that is a huge difference! It´s all the difference really!

    Our digitally coded and digitally transmited information allows us to “embed” meta-information on that stream. That is how the search engines work, that’s how the social graph works. The network is increasingly intelligent enough to know what I want when I want it. Make no mistake: it will be more inteligent in the future. Not the same, nor less; it will be more intelligent, I repeat! It’s not crazy to predict that one day it will be intelligent enough to measure the value of the information it carries and pay for it accordingly, without the intervention of humans. Our forefathers who discussed public issues in coffe-shops gained prestige when they had valuable opinions to put forth. In those days, that “value” could not be measured. It the future it will.

    That rationale is the basis for my rough proposal of a “New Business Model for the Media”, that can be read in detail here: http://josemoreno.posterous.com/a-new-business-model-for-the-media. The media are now in dire need of it. But it really transcends the media, in the way that it allows a new range of possbilities for content creation and information transmission in the future.

  45. Kathy Wingard Says:

    Insightful article and certainly not wrong. You may be preaching to the choir who is worried that investigative and local journalism will be a casualty of digital distribution by volunteer bloggers who are not stakeholders.

    Paywalls are sneered at by technorati. Readers find news free elsewhere because free is the entitled model of the Internet. Just as ladies used to clip coupons out of the paper, they now share free online sources.

    Without better educated supervisors (editors) and newsroom competitors, without deadlines and quality work for pay, how will digital News “paper” publishers offer any dependable content?

    Voluntary submitters may be good, but their financial interests will lie elsewhere, meaning they will not become a trusted source. Without a reputation and paycheck on the line and without a chance to excel as a journalist, writers and reporters will be outside the news. Passion for social change and the greater good shall have died with newsprint.

    Endemically, newspapers as businesses do not know the root system of the Internet well enough to use it for the good it can do the public and themselves. To simply install a “paywall” and and hope it is a business model exemplifies this. Publishers have long understood their advertisers better than their readers. Now readers and advertisers have moved on, publishers must join the rest of us in a digital world.

    Good features, local sports, business and actual By God investigative journalism benefits from the access databases and contacts provide. Professional journalists must be encouraged and supported.

    New publishing methods save money and provide unimaginable opportunities, worldwide. How is that a negative? It is if old models are pushed beyond their natural lifespan.

    It’s been a lot of years and stories since I sat in the chairs your students will occupy. Tell them: you have to love people to do this job. That hasn’t changed. Some days, you are their only voice, no matter where you shout.

  46. Dan Gillmor Says:

    Exactly right, Clay: Chaos is a feature, not a bug, of a diverse ecosystem. Monocultures are dangerous because when they fail, they do so in catastrophic ways. Species rise and fall in diverse ecosystems, which isn’t fun for the ones that disappear. But there’s vastly greater overall stability.

  47. John Garrett Says:

    Well said. The good news is that we do live in a country where new things can be explored and old things can be tweaked. We just need courageous leaders and entrepreneurs to have the wisdom and faith to invest and explore instead of shrinking back. I believe our culture, our way of life, and our communities depend on it. Go get em.

  48. Why We Need the New News Environment to be Chaotic « Clay Shirky « Netcrema – creme de la social news via digg + delicious + stumpleupon + reddit Says:

    […] Why We Need the New News Environment to be Chaotic « Clay Shirkyshirky.com […]

  49. RalfLippold Says:

    Thanks a lot for sharing your thoughts. Yes the ever accelerating technologies which enter our lives (not just the personal and private alone), will have disruptive effects especially on the way information is distributed.

    What tended to be only locally and pre-filtered now will become sooner or later open data, and people instantly can participate in the conversation, sharing data on events, sharing knowledge, and co-write on stories that would have been never possible before.

    Ronald Coase’s “The Nature of the Firm” and the issue of transaction costs will built up fully new cooperation models between news agencies and trusted supporter communities. It happened to me a few months back when asking to attend a hightech conference and felt the urgency to share the findings with local newspapers (which actually could not send a journalist to the event). Yet that time it did not work out, rather perhaps in the future, as the co-created value of such will be seen by upper management and embedded into the current press business model.

    Cheers, Ralf

  50. Gregg Freishtat Says:

    Great analysis.

    The internet has been dislocating traditional business models and industries for the past two decades. While news is unique because of its social value, the dislocation of the business model of news is not. The Travel, Music, and Book industry have undergone similar dislocations. I still travel, read, and listen as much as I ever did — its just someone new that is profiting from my activities. I suspect the news industry is on a similar course. HuffPo & Flipboard are not the answer but their new models and technologies do portend for new and different methods of creating and distributing news.

    Being in the technology industry, I see new platforms, technologies, and infrastructure as playing a vital role (e.g. Itunes or Kindle) in re-inventing an industry which is not going away. The model will change – the players and brands may change, but consumers’ desire for credible, authentic, and trust worthy sources of news will grow – not diminish – as the quantity of content continues to grow on the Net. The think the power of “brands” will become more and more important; even if those brands do more curation of others content than creation of their own. For the business of news to be profitable online, the old model of creating everything in house must change — and fast.

    Gregg Freishtat
    CEO, Vertical Acuity

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