The New Paradigm in Finance Journalism

Dec. 7.09 | About: News Corporation (NWS)

I am from the last of the pre-techie generation, and can remember our family’s first color TV, the first PC, the first walkman, and I remember thinking “who needs a cell phone”. I still get the Wall St. Journal, and Investors Business Daily delivered to my home. Younger readers are probably envisioning the Joad family, the Flintstones, or whatever their generation uses as representations of the prehistoric.

This said, it has become obvious even to a luddite such as myself that the print versions of these venerable publications are going the way of the blacksmith. What may be less obvious is the online versions of these entities is following closely behind.

The “old guard” financial publications provided value in two major ways. They provided financial information you could not get anywhere else and they carried the gravitas of jounalistic integrity that made the information actionable.

Then there is the “middle guard” represented almost exclusively by CNBC for the last 20 years or so, and more recently Fox News, and Bloomberg News. They provided very fast access to financial information that the print publications cannot deliver. To a lesser degree they also carried the gravitas of journalistic integrity.

Now we come to the crux of the matter. The “new Guard”, social networks like Twitter and the subsequent financially targeted sub networks like StockTwits, and the Blogoshere along with the financially vectored aggregators, has taken the advantage of speed of delivery away from both the old and middle guard. I can no longer count how many times I have learned of an event from these outlets well before the others have put it up on their platforms. In a world where the faster one can obtain and act upon the information is paramount, the new guard has taken the advantage away from its predecessors.

I believe the first and middle guards could retain their stature and relevance and thereby their value by maintaining the jounalistic integrity that they have. An organization of respected correspondents whose names appear under their reports, and whose policies of verification of those reports is in theory vigilan, should have the advantage over a group of independent, sometimes anonymous, individuals.

In fact, at this point they do, their reporters have longer, more verifiable, track records and their credentials can be checked easily. The sad fact is the new guard is not taking this advantage away from them, they are surrendering it voluntarily.

The management of the old guard is in fact making two errors in judgement in my opinion. One is the classic problem of all organizations, Inertia. The tendency of an object or in this case organization to remain stationary unless acted upon by a force. They are allowing the force of the new guard to be the moving force when they should have had the force of the visionary to move them ahead of the onslaught. The old guard fell into the trap of self preservation. The stability over dynamism that is inertia. They did not heed the wisdom that says either you’re growing or you’re dying, there is no status quo. They should have been the first bloggers leading the new guard rather than enter the blogosphere kicking and screaming. The fact that they didn’t will likely be viewed by history as their downfall.

Second is the possibility that they are failing in the area they have total control over. The appearance of their jounalistic integrity is falling away and the bloggers and social networks are building track records. There are still many in the new guard of dubious quality, but like the yellow jounalists of yesteryear the anticeptic of sunlight will kill these germs leaving the quality alive and exposed above the rest. While the honest and industrious bloggers and social networkers toil away they increase their gravitas, providing on point information in a timely fashion, the old guard seems to be moving in the opposite direction.

Here are some examples:

On the front page of the online Wall St. Journal the Sports news appears above the Technology and Economy news. Football picks and a story about how Twitter is rocking fantasy football? Not even a sports business story, but stories better suited to the back pages of the NY Post are what the journal offers us.

If you click on their Business page you see at the top of the page next to, and with font of equal size, is the story of some degenerate gambler who lost $127 million to casino’s and is suing them for some reason.

Then there is CNBC, who seem to be very interested in the porn and marijuana industries, with multiple documentaries on both and repeated showings of them ad nauseum.

They say that these stories are the highest rated, and that is true. So the logical course for them is to report more and more of these high ratings stories and less of those boring low rated business stories. They are degenerating into the Wall St. Post and the CNBC Lifetime network. What the old and middle guard fail to realize is there are players in those spaces better than they are at that stuff. What’s going to occur and in fact is already occuring is they are spiralling into mediocrity in what they could be the best at, and rising to mediocrity in what they are merely second or third string players in.

Seems unlikely I will renew my print subscriptions next year, and it’s only a matter of time before the online subscriptions meet the same fate. The old guard will no doubt blame societal changes for their demise but the truth is they put their own heads under the axe and are reaping the rewards of what they themselves have sown.