Monday, November 10, 2008

Are Newspapers Reaching The End Of Days?

There is little more urgent on the Internet than fixing the web advertising model.

The New York Times is on the verge of going out of business. This is a business with a great and beloved product. And while the economy is indeed tanking, failure of newspapers is not about macroeconomic issues. The Times’ issues are specific to the newspaper industry. The problem is that while The New York Times still has a healthy readership, their readers are moving to the web version of the paper, where newspapers currently can’t make money.

While search based advertising is doing well, display based web advertising on which all newspapers depend, is broken. Actually, that is incorrect. It never really worked, though for some time we deluded ourselves into thinking that it did. The problem is that now, with a failing economy, people are no longer willing to look the other way.

As, Internet observers, we continue to attack newspapers and suggest derisively that they need to “figure out a business model that works.” The problem is that the critique is really aimed in the wrong direction. Of course I guess you could suggest that it is the newspaper industry’s problem since they are the ones about to go out of business, but this issue is far bigger than just newspapers.

The Internet industry has not figured out a viable way to monetize the kind of work that the New York Times does. The browser, in its current form, is an ineffective environment for exploiting non-search advertising. This is problematic because the information media business is incredibly valuable to our culture and entirely dependent on such advertising.

The kind of value that the New York Times creates cannot be produced by user generated content sites like Digg, manual aggregators like Drudge, or small time bloggers. These low cost information purveyors stand on the shoulders of very expensive giants. Like leeches, they attach themselves to, and live off the work of their much larger hosts. In general they leverage and expand upon the vital work the major outlets do, but they rarely act as original sources.

Organizations like the New York Times do real research, rigorous, editing and investigative reporting. That is not to say that they always get it right. But theirs is work that must be done. Real reporting is hard work and it needs to pay a decent wage and stay in business.

And there’s the rub. The media’s advertising based business model is broken on the web, and so the businesses that employ real reporters can’t afford to pay decent wages.

This is a crisis. If the New York Times and other major newspapers go out of business, our culture is in grave danger. We will be watching as a huge part of who we are disappears right before our very eyes.

And so, The New York Times does not have a problem, *we* have a problem. The Times is just the canary in the coalmine for this much larger and more important issue of fixing our tools. This is a problem for the technology industry to solve, and fast. Expecting The New York Times, or any newspaper to solve it is about as reasonable as expecting them to create the next great operating system. They just don’t have that kind of DNA, and we shouldn’t wait around expecting them to develop it.

The core of the problem is that advertising can’t be placed alongside content in a substantively profitable way on the web. It doesn’t work. Or at least, it doesn’t work well enough to pay for content that is expensive to create.

In printed publications, the reader’s eye wanders. A full broadsheet can be fully scanned in a second or two. The reader can focus on ads or headlines that catch her attention. Ads are scattered randomly throughout the content, and so the eye trips over things it might not otherwise see.

On the other hand, Internet advertising is structured in such a way that you know exactly where not to look to avoid it, i.e. across the top and down the side of any web page. And on the web, there is no such thing as scanning a massive page of content to find things of interest as we do with a real paper. Browsing on the Internet is like walking down the street with massive blinders on. You can’t get the kind of super-fast overview that newspaper reading affords, meaning that comfortable serendipitous discovery is much less likely.

The bottom line: display ads on the web are almost totally ignored.

As I have already stated, this is not a problem we can expect the newspaper industry to resolve, but I do believe it is eminently resolvable. And while there are many groups that could develop viable solutions, there is only one that I think has the focus and the sufficient interest in these sorts or issues to resolve them, and that is Mozilla.

As I see it, Mozilla has the right kind of people, the right mandate, and a parochial concern for the well being of the web that makes them the ideal organization to work on fixing this problem. It seems to me we need a next generation browser that allows for much easier scanning and browsing. Just as my eye can zoom in or out on a physical page, and just as I can, in a quarter of a second look at a bunch of articles on a page, so too should such things be possible in the browser.

My browsing experience should be as fast and effective as is reading a real physical newspaper. Today, browsing a paper on the web is nowhere near as fast and fun as doing the same in the real world, but I am confident that, with the right focus, we can do much better. And a side effect of such improvements could very well be the saving of the newspaper business.

Of course other companies beyond Mozilla could step up, but, for a variety of reasons, this seems unlikely. And if no one does anything, in the next 24 months, a huge and important piece of our social structure and system of governance will entirely disappear.

And so, while one may think of this as being an alarmist piece about saving the wealthy scion’s of the newspaper industry, I assure you I have no such narrow concerns. As I see it, saving the newspaper business should be viewed by all of us as a purely selfish act. We cannot afford to lose the valuable service that newspapers provide, and so saving them is entirely about saving ourselves.

18 comments:

  1. Well, someone has to write the stories linked through Google News, which is mostly where I read them. Oh, I guess I have fixed bookmarks for the BBC and Yomiuri Shimbun (for interesting foreign perspectives), and a few other specialty news bookmarks for tech and science news and so on, but I get almost all my general news on the web through Google, and to some extent that's helped kill the papers, as they get practically no revenue from their pageviews compared to their print editions.

    I used to be a NY Times subscriber, however, but I quit that long before they were on the edge of bankruptcy. I quit because their articles started to suck, and because the balance of ads to articles became skewed to the point of annoyance. The quality of the paper has declined dramatically over the last 20 years, and it is still by far the best in the country (don't even mention the WSJ in the same breath), so that means the whole industry has been in the toilet for some time.

    I suppose that the Times may go down, and if they do, what hope do the myriad lesser and crappier AP-reprinting papers have of surviving? For that matter, what will happen to AP itself if no one is around to subscribe?

    But some kind of money-making system will have to emerge to replace them, or the Google News screen will just be blank. And what will the bloggers have to write about, if God forbid, they have to do the legwork themselves instead of just commenting on the real journalists' work?

    I shed no tears for the Times, since as I said I don't think they've deserved any for many years, but it will be interesting to see what replaces them, or how they manage to survive if they do.

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  2. I remember listening to a stage performance on the radio of a troupe in Baltimore performing as the reincarnated-for-one-night trio of H. L. Mencken, Thurgood Marshall and Ella Fitzgerald. They were confronted with the state of the modern world and each of the character actors portrayed their persona's viewpoint.

    Not only was it well done, but a bit stuck with me that I thought I would share. Mencken was asked about the Baltimore Sun and he commented that he was shocked that Baltimore only had two newspapers. He wondered how anyone could be properly informed with only two newspapers, and how democracy could function correctly that way.

    It was interesting, and I hadn't thought about the subject before. There is a big void craving real investigative, feet-to-the-fire journalism and providing accountability. Network TV news isn't doing this--they're just in a ratings cold war. Blogs aren't doing this--mostly, they don't have the bankroll and the reputation for the scale required to do this well. Local/regional newspapers probably could do this but not if they vanish.

    Anyway, I don't have an answer. I personally hate display advertising (I don't have TV service either). Just thought I'd share the philosophy of Mencken's ghost.

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  3. Justindz:

    Ha, that must have been an interesting broadcast. I wonder what decision-making process went into choosing those three people, who seem to be so far apart in so many ways. "Imaginary conversations" is always a fun topic if the famous people imagined are portrayed reasonably well.

    I seem to recall that earlier in the twentieth century, it was not unusual for people to read multiple newspapers. You could only choose one national televised news program to watch back in the Cronkite era, but back then they were actually all pretty good.

    Nowadays, just as you imply, TV news is utterly worthless. If it wasn't for adblock plus and more importantly flashblocker, even the web would be an agonizing experience. I wonder if there is still anyone who actually reads more than one print newspaper a day.

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  4. Newspapers at my age 72 are becoming obsolete ! I honesty have not subscribe to a home paper in years ! I do read the Times on line but I am not an answer to the fact the Newspapers have not been able to penetrate the Digital Age !

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  5. Hank,

    Are you familiar/have you heard of the 'Times' feed reader for Mac OS X? It aims to take the experience of reading RSS feeds/news sites and create an aesthetic experience similar to that of reading a newspaper:

    http://www.acrylicapps.com/times/

    It is a product that is inherently designed to cater to people who read a few, specifically focused blogs (i.e. not those of us with 50+ sites in our queue). I personally elected to ditch it for this reason, but I think for a less heavy user, it could meet their needs rather nicely.

    While I don't know if a product like this can serve as a viable long-term solution to the problem you've presented, I think it takes a step in the right direction, as far as representing a fundamental change in the way we interact with (non-user) content-generating sites, and emulating the heavily 'spatial' (for lack of a better word) experience of reading a 'hard' newspaper.

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  6. For once I get to disagree with you Hank. Your bottom line is incorrect IMHO. It should read "ads are almost totally ignored", regardless of medium.

    The NYT should of realized long ago the rates they and others charge were grossly inflated. Now that the Internet provides a way to measure direct ROI (click through's etc) on advertising everyone is realizing the real value/cost of ads.

    So, what does that leave us with? How does the NYT pay all their writers? Not with ads, regardless of delivery mechanism. Not with subscription fees as we all know how well that works. But maybe something having to do with syndication.

    TV shows make bank once they can syndicate and have their content (the show itself) on someone else's network and or in another country. There are more ways, but this is just one. I'm not talking some free web service API here of course.

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  7. For any story out there, there can be someone reporting about it and happily writing/taking pictures of it.

    As you know, if someone can do it for free, then it will be free.

    Which means the NYT or other newspapers compete with other sources giving out news for free, and ultimately, they will die if they don't change

    There might be a business around pruning the mass of information, i.e. someone who does the job of editing through all the RSS feeds and blog posts, and then selling this work.

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  8. Heri,

    No real investigative reporting is being done for free any more than people are working in factories for free. Real reporting is hard full time work. All blogs do is comment on professional reporting. They do not create original source reporting almost ever.

    Hank

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  9. i am kinda of conflicted because i really only rely on associated press wire service and local news like NY1 for NY News and US National News. However i do agree that while NY TIMES may have become non-relevant, there is a purpose served by the Gray Lady which is pure cultural.

    But to blame the internet ad based model as a culprit is wrong. That is too simple, NY Times has not merged into the new economy very well.

    I was pleasantly surprised by a free weekly newspaper called Rolling Out I remember when they were only a strictly free paper based newspaper but then they got it at least they appear to be getting it with regards to access providing news, opinions via paper, online video and website/blog. One of the best reasons to pick up Rolling Out was that they always had ads that provided where to pick up free movie tickets for that week's premiere.
    Well they now have the video for the red carpet of that Premiere plus the movie's stars pov on video which i am sure broaden's their appeal to advertisers who are trying reach that movie's demographic.

    Video sites like Hulu or even my favorite shows like LIFE, CHUCK, Knight Rider on www.nbc.com have ad which I cant tune out. I dont always remember or feel like recording regular tv shows which will not be replayed like my favorite cable shows on FX or Bravo. My favorite shows on HBO, Showtime are on demand and they arent available online.

    So i dont agree that ads based models dont work. It just has to be managed to best meet the needs of your site vistors and your advertisers. So another solution should be for NYTIMES to merge video into their site with unavoidable ads vis video that we are willing to watch.

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  10. >We cannot afford to loose
    Should be: "We cannot afford to lose"

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  11. Thanks Anonymous. That is a dumb mistake I seem to make repeatedly.

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  12. This is one of the best articles I've read in a long time! I'm always reading your blog but never commented, shame on me. :)

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  13. Thanks for the food for thought.

    I've been casting about for a good reason to get back into writing, and this really got my wheels turning.

    My sense is that the problem is much deeper than a user interface solution can tackle. The whole business model of advertiser supported news has been eaten away as the general utility of ads has decreased. These days, I can easily find what I need and want - the ads provide far less value than they used to. I believe we're on the painful cusp of the emergence of a new business model in advertising.

    I gave the whole issue a stab at:
    http://sowinglight.com/wp/?p=13

    Again, thanks.

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  14. You lightly touched on the technological issue at hand, but glossed past it too quickly. The fundamental issue is not layout, which you mentioned. It is more subtle than that.

    The fundamental problem is that banner ads are headlines and whackamoles that we are afraid of clicking on accidentally. But its not the wild rollercoaster that we may find ourselves on that scares us away from clicking on them to see some real content behind that promise of "greater enjoyment" (of whatever form). The fear is that we will not get back to where we were.

    In printed media, we can easily side track ourselves from the main article and read the details of the ad, then return to where you left off without a hitch.

    If you want a technological solution, i'll give you mine. What we really need is a rethink of the browser history. Ditch the linear list of page names in a pop-down menu. Throw it away. Replace it with a tree view/ flowchart of thumbnails that show the screen as you left it when you clicked away.

    Since you didn't read all that, i'll state it again.

    Replace linear browser histories with a tree / flowchart of your browsing. Use thumbnails instead of text.

    Now, do it.

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  15. Interesting article.

    I think micropayments might provide a solution to this problem in the future. People have been talking about it for a while, but there are still many technical details to be sorted out. It will probably have to be directly supported by web browsers in order to succeed with the average consumer, but I think the concept itself seems like a good idea.

    I would be willing to pay small amounts of money for accessing quality content—when I wanted it. Possibly it could also be combined with an online subscription via a third party (i.e. I don't want to subscribe to a specific newspaper, but rather subscribe to a service that allows me to read X articles from any micropayment-enabled site in a month).

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  16. Newspapers aren't read so much today
    because, in general, they don't have
    much to say.

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  17. Reading the morning paper was such a huge part of my routine. Not anymore. I head straight to the internet now. Even though they saw it coming, the papers were really caught off guard when it came to new media. I just hope they can figure it out before they all go bankrupt. Like them or hate them, we really do need them. I did a video commentary about this.

    http://www.youtube.com/watch?v=wl1HsZpKAdQ

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