In my post-Memorial Day malaise, I just got around to reading the current Atlantic cover story on Google & the future of journalism. Having seen dozens of similar articles over the past few years, I’m a little jaded about this sort of Eeyore news navel-gazing. That said, I found this particular article to be pretty well done. James Fallows gives an unusually clear and concise explanation of the news industry’s woes and it is clear that the folks at Google are actually thinking hard & bringing a new perspective to helping news organizations migrate to the digital future. Of course, I’ve got some opinions of my own – though maybe they should be taken with a grain of salt since I read the online version of the article for free instead of buying the magazine when I saw it at Suburban Station? The article itself is quite long (who has time to read the news?), so click through for some highlights…. Things I liked: 1. Google is trying to save news and not necessarily news organizations. It takes somebody outside of the industry to say that the legacy costs at newspapers (and TV stations, etc.) are simply too high to be sustainable. A great deal of these costs can be eliminated without really undermining the product:
Burdened as they are with these “legacy” print costs, newspapers typically spend about 15 percent of their revenue on what, to the Internet world, are their only valuable assets: the people who report, analyze, and edit the news. Varian cited a study by the industry analyst Harold Vogel showing that the figure might reach 35 percent if you included all administrative, promotional, and other “brand”-related expenses.
Taking an even more disruptive approach, you have to figure that the 15% that news organizations are spending now could be reduced even more when you squeeze more digital efficiency out of news gatherers by combining the photographer with the author and ask the digital reporter to do more work remotely (say, interviews over g-chat or skype). Doing this means that jobs, lots and lots of jobs, will go away and some quality will be lost – but the news won’t just disappear. Given the contracts, unions, and debts that existing news organizations have, it’s hard to imagine most of them transitioning to the new reality… 2. The suite of products that Google is developing to aid news organizations sounds fantastic. They’ve put together tools to develop living stories – which sound like a cross between a closed wiki (not that they’d ever use that word!) and a dedicated page, offered to bear the costs associated with uploading and hosting videos for specialized Youtube repositories that news sites can control, and are refining tools to automate the placement of display ads such that the prices can vary on the fly to produce more revenue. While all of these innovations can surely help old news sites, they can also be put to use by bloggers. Suddenly, Google has given folks who might not be technologically capable of programming or developing these tools the ability to have increasingly sophisticated sites. This is a huge subsidy.
Things I disliked: 1. The blind faith that online ads will eventually be worth what print ads were worth. The key section here reads
Hal Varian pointed out that people who read printed newspapers report spending an average of about 30 minutes a day with them, whereas online users flit in and out of news sites in an average of 70 seconds. Eventually they’ll spend more, if never quite as much as with a newspaper. At that point, he said, “you’ll be as valuable to advertisers as you ever were—if anything, more so, since advertisers can probably have a better-focused ad.”
There are several problems with this vision. First, it assumes that targeting is a good thing for newspapers when it might actually turn out to be a bad thing. In the past, advertisers paid a premium for newspaper ads even though, as the axiom goes, they knew only half of the ads worked (just not which half). The data trail that is generated online may actually show that no advertising next to the article about BP’s oil spill works. Soo…what happens then? Second, this discounts the explosion of ad inventory that’s available. In the analog days, you could only advertise in a few places. Now there are countless places for advertisers to place their content and no guarantee that they’ll come trotting back to newspapers, willing to pay more. Third, digital ads can be blocked and not even displayed. Print ads could be ignored, but they were still generating revenue just by being printed. Add all of this up and it seems misguided to assume that the papers’ old ad money will return if they can just make it through a few lean years. 2. The article punted on whether or not all this fancy technological effort can actually save hard news. After explaining that
“Bundling” was the idea that all parts of the paper came literally in one wrapper—news, sports, comics, grocery-store coupons—and that people who bought the paper for one part implicitly subsidized all the rest…“Newspapers never made money on ‘news,’” Hal Varian said. “Serious reporting, say from Afghanistan, has simply never paid its way. What paid for newspapers were the automotive sections, real-estate, home-and-garden, travel, or technology, where advertisers could target their ads.”
Fallows ends the article by saying
But Schmidt and his colleagues realize that a modernized news business might conceivably produce “enough” good content for Google’s purposes even if no one has fully figured out how to pay for the bureau in Baghdad, or even at the statehouse. This is the next challenge, and a profound one, for a reinvented journalistic culture.
If the “modernized news business” produces everything but hard news, then who needs it? As the article points out, virtually all the other components of a newspaper – financial pages, real estate listings, classifieds – have online analogues that are already thriving. The point of saving news is…get ready for it…to save the news. The point of the article sort of boils down to, Google is really trying so it’ll be OK! To fizzle out on this note was disappointing. A great deal of Fallows’ article is on target. But despite discussing ‘engagement’ throughout the article, he undersold a key underlying issue: most people don’t really read the news. Without dealing with this issue, the “save the news” brigade doesn’t fully treat what is, obviously, a serious issue for our society. While Google’s efforts will help major national entities like the New York Times transition, those organizations would probably survive somehow without the company’s help. As the head of Google News notes in the article, having 5 newspaper options for coverage of major national news events (and maybe 50 total when you include international and broadcast outlets) is probably sufficient. The 10,000 replications around the country of the story-of-the-day won’t really be missed – but whatever local and state news they provide will be. Perhaps predictably, this brings us back to my angle: the future of local news. Without producing a full dissertation here, I will say that reading Fallows’ article makes me see a media future more clearly in which national papers survive and local news becomes the purview of small, online start-ups that will be helped by Google’s software assistance (and are already springing up nationwide). The pressing question, to me, is how effective these scrappy media underdogs will be at acting as the digital fourth estate if (when) they can’t attract a mass audience.