The Journalism Bubble

When I decided to go into the news business, we took a vow of poverty, or at least acknowledged that we’d never be rich. I chose not to go to law school and instead transferred to j-school and did so in the full awareness that I’d never be well-paid.

Wrong. I ended up being very well-paid because I worked in news in the last gasp of its century-longer monopoly bubble, which ironically came to a climax at the same time as the short-lived tech bubble. Before 2001, metro newspapers still made tens of millions of dollars in each of the classifieds categories, plus retail, plus circulation revenue. Magazines were still blockbuster businesses worth risking tens, even hundreds of millions of dollars to launch. TV will still a star medium where so-called talent was worth big money.

Journalists ended up with a severely inflated view of their own value. It was a bubble that has now burst. That is why they are barking so loudly against the wind of change. Change isn’t just taking away jobs, it’s taking away great jobs: visible, self-important, well-paying, once-secure. Damnit, it’s ruining a good thing.

Media economist Robert Picard poked a pin to that bubble - after it was deflated; this is a case of kicking them when they’re down - as he argued in the Christian Science Monitor and in an Oxford speech that journalists deserve low pay because they don’t add sufficient value. Picard says, and he’s right, that journalists spend too much effort churning our commodity value: the stuff we already know, the same stuff others are making:

Well-paying employment requires that workers possess unique skills, abilities, and knowledge. It also requires that the labor must be non-commoditized. Unfortunately, journalistic labor has become commoditized. Most journalists share the same skills sets and the same approaches to stories, seek out the same sources, ask similar questions, and produce relatively similar stories….

Across the news industry, processes and procedures for news gathering are guided by standardized news values, producing standardized stories in standardized formats that are presented in standardized styles. The result is extraordinary sameness and minimal differentiation.

It is clear that journalists do not want to be in the contemporary labor market, much less the highly competitive information market. They prefer to justify the value they create in the moral philosophy terms of instrumental value. Most believe that what they do is so intrinsically good and that they should be compensated to do it even if it doesn’t produce revenue.

So where’s the value? Gawker friend Nick Denton says it’s in reporting. So does Arianna Huffington, who just today hired away the head of investigations from the Washington Post to head her new investigative unit. Arianna has said for sometime that she’s hiring reporters because their stories get more traffic. Denton told Ad Age:

People — particularly if they’re under 40 — have news priorities other than those of the editors of The New York Times or producers of the “NBC Nightly News.” A new tablet from Apple — or last night’s episode of “Gossip Girl” or the adventures of the hipster grifter — is a bigger deal than the latest petty scandal in Albany. You think that’s a damning indictment of modern society and a recipe for idiocracy? Fine. Start a nonprofit to cover all the local-government news you think a healthy society needs. But don’t expect advertisers — or commercially-minded publishers or readers, for that matter — to share your interests. . . .

When Gawker started, there was a surfeit of information and not nearly enough context — so we provided that, in the form of links and occasionally snarky commentary. But now the balance has shifted. There are pointers to articles on the blogs, Facebook, Twitter, Digg. And all these intermediaries are looking for something to link to. If a good exclusive used to provide 10 times the traffic of a standard regurgitated blog post, now it garners a hundred times as much. That should be reassuring to people. The content market is finding its new balance. Original reporting will be rewarded.

So how can journalists create value? They can and should report - but the link economy demands that they specialize, that they stand out above the level playing field by reporting uniquely: Tell us something we don’t know, something we want and need to know, not what we already know.

Picard thinks that local newspapers can specialize and there we agree, but we disagree about the topics; he says they should take on national and international topics - Dallas on energy, Chicago on aircraft, Des Moines on ag - but I think their strength is in being local. And there I disagree, too, with Denton; I think that some advertisers - new advertisers never served by bit and inefficient papers - will care greatly about local and will end up helping to support the work that serves local customers (I spoke with one such advertiser today; more on that later).

Picard says that papers need to learn to collaborate and there, too, I agree; but he says they need to do it “throughout news enterprises” but I say they need to do it outside news enterprises, supporting and enabling networks and distributed ecosystems of news.

Picard says that journalists “need to acquire entrepreneurial and innovation skills that makes it possible for them to lead change rather than merely respond to it.” There we certainly agree; that’s why I’m running a course in entrepreneurial journalism. But I wonder whether, inherent in what he says, is that it’s too late for entrepreneurship from inside legacy institutions; it has to come from without.

But the bottom line is the bottom line: Journalists need to make an honest and harsh accounting of the value they create before they can worry about what they’re being paid and by whom. They can no longer use bubble accounting, when they convinced themselves that they and their high calling were worth their inflated paychecks (and I was among those who got them) without facing the blunt truth of the market. Now they have no choice but to face their market.

Comments

[bmw4ever:]

"As you know, we famously don't pay for our bloggers" - Arianna Huffington

Does SeekingAlpha pay bloggers who post here?

May 21 09:31 AM

[baycommuter:]

good article, Jeff, I hope everyone in our newsroom reads this. I do think the sense of entitlement is slowly being beaten out of us.

May 21 10:00 AM

[NP Refugee:]

Again, Jeff--spot on. What you've left out of the equation is the effect and contribution to the demise the craft unions have had on the industry as a whole. Journalists do need a wake-up call. I knew many columnists who used to laugh about only producing two columns a week which took them all of two hours to write and then taking the rest of the week off. They got paid handsomely for their total of four hours they worked each week. It works out to roughly $350 for every hour they actually worked, by their own account.

My opinion is that the journalists who are committed to the trade will end up writing for suburban papers (for a fair wage) who will take on the traditional role of the metro paper, providing investigative insights into the communities where the audience is deeply passionate. That is fertile ground yet to be tilled. Suburban weeklies will become suburban 3-a-weeks. They will augment the chicken dinner, Eagle Scout award stories with investigative stories that seek to hold the powerful accountable and serve as a voice of the community in that which matters most because it's that which is closest to their homes.

I certainly hope I'm correct.

The point is, there is still a need for journalism, but it has to be fresh and insightful and not the run-of-the-mill regurgitation of someone else's insights and investigative work. So much material in a metro is a hodge-podge of syndicated, borrowed, nonfactual material that the newspapers come off as, frankly, lazy.

One colleague used to describe the newsroom as "the fat, dumb, and happy." I always used to say that they'd produce better quality journalism if one could find a way to compensate them on the basis of a "reader resonator meter."

May 21 10:12 AM

[Windsun33:]

I don't think that journalism is dead, but I do think that the age of just regurgitating press releases from various sources might be. It might be time to go retro back to the 20's and 30's, when journalists actually (if often very sensationally) went out and looked for news.

May 21 11:39 AM

[Jasper M:]

In Wolfe's "The Right Stuff", he referred to the press in the 50's & 60's as "The Genteel Beast". They were not looking to publish anything that was shocking in an unwelcome way. They Knew that most of the astronauts were sleeping around, but it wasn't considered news.
I supposes this is an artifact of prosperity - it times (which usually = one's own situation) are good, don't rock the boat too much.

May 21 03:26 PM

[carey_jim:]

I think you said it in the beginning of your article and then veered off into the gray area of 'truth telling for profit.'

I think what you said, in effect, is that truth telling won't get you rich and that if you want to get rich, there are many great ways to do it, but, at the very least, writing stories is not one of the more efficacious ways.

Truth telling (and I know that truth is relative, just ask any former Pravda reporter) sometimes even makes people angry enough to fire you, try to destroy your reputation or even put you in jail.

For every despised and underpaid Chicken Little, there are a thousand fat, well-paid court jesters.

May 21 03:36 PM

[Bobby Rifle:]

> Wrong. I ended up being very well-paid because I worked in news

You must be the only one.

May 21 10:26 PM

[cyaker:]

Bill Moyer's calls it stenography not journalism. It's interesting that neither the author of the above nor any of the commentator's feels it necessary to mention the failure of journalists to check their facts or the speed at which they become propagandists for government as they did in the run up to the Iraq invasion. Not to mention that no one in the mainstream media had a clue that the credit crunch was looming despite the evidence to many insiders. Last we have Bernie Maddof and a whistle blower who tried for ten years to get the SEC's attention. I can't imagine that no one in the Media had an inkling of this. Journalists need to do some soul searching and decide whether they really want to be members free press as the "Framer's" of Our Constitution envisioned or entertainer's and shills. The rest will take care of itself.

May 22 03:13 PM

[Donald Johnson:]

As a journalist, publisher, entrepreneur and long-time media observer and critic, I think it is easy to be self-righteous about how journalists work and what they accomplish. Those who point to reporting on Iraq and Madoff as examples of bad reporting over simplify and repeat complaints they've heard or read.

Those who complain reporters are simply rewriting news releases ignore the economics of journalism. Simply put, rewriting press releases worked for generations. Now, readers can get the releases online.

The economics of the media is that you need the wealth of a "60 Minutes," WSJ, NYT or LAT (historically) to employ journalists who know something more than journalism and spend weeks and months on one story.

The other fact of life is that few readers want such reporting. The biggest mistake an editor can make is to publish a series of articles over more than two or three days. People don't read them. Only panels of judges who grant journalism awards do.

What's the evidence? How many indepth mags are profitable? How many subscribers do they have? Not many.

So entrepreneurial journalism, which I used in the 1960s to make my name and career, is romantic and the ideal, but the market for it is very limited. People who will pay for such reporting and analysis hire highly skilled analysts and consultants to produce such work for a very few eyes.

If you want such "journalism," you buy a few books on a topic, read widely and do your own reporting and analysis. Few want or need such info. and fewer will pay for it.

Evidence? Look at how few pay for subscriptions to the WSJ, Barron's and Morningstar.com. How many buy Value Line and its various services? Thousands, not millions.

So I think Jarvis is training his journalism students to work for the government, hedge funds and market research firms, not for the media.

May 22 08:51 PM

[Missing_Link:]

"People — particularly if they’re under 40 — have news priorities other than those of the editors of The New York Times or producers of the 'NBC Nightly News.' "


Well put. I find it unfathomable that the media seems to be hyperfocused on minor issues like waterboarding while the biggest economic crisis in 75 years is causing massive loss of jobs, homes, and savings across the country.

May 22 11:59 PM

[Bobby Rifle:]

Waterboarding is a minor issue?

We prosecuted Japanese officers after WW2 on the grounds that it was a war crime. Even executed some.


On May 22 11:59 PM Missing_Link wrote:

> "People — particularly if they’re under 40 — have news priorities
> other than those of the editors of The New York Times or producers
> of the 'NBC Nightly News.' "
>
>
> Well put. I find it unfathomable that the media seems to be hyperfocused
> on minor issues like waterboarding while the biggest economic crisis
> in 75 years is causing massive loss of jobs, homes, and savings across
> the country.

May 24 10:06 PM