Closer To The Ideal

A very clever post by Arc90:

America has in fact transformed journalism from what it once was, the periodical expression of the thought of the time, the opportune record of the questions and answers of contemporary life, into an agency for collecting, condensing and assimilating the trivialities of the entire human existence, [...] the frantic haste with which we bolt everything we take, seconded by the eager wish of the journalist not to be a day behind his competitor, abolishes deliberation from judgment and sound digestion from our mental constitutions. We have no time to go below surfaces, and as a general thing no disposition.

The punch line is that this W. J. Stillman, writing in 1891, complaining of the effect of the telegraph on journalism.

A lament about the decline of the Wall Street Journal:

The politicalization of the WSJ has moved to a new and more risky phase. The paper is now in danger of being a money loser — not for its investors (tho that has already happened), but for those traders who read its content.

It used to be that articles on the Market or specific companies or various finance stories were objective and reliable and free from bias. Sure, you could always count on money losing, bat-shit crazy nonsense in the editorial pages, but that was a special area of sequestered partisans, who due to their insanity cared not a whit about how much capital their lunatic ravings lost their readers. (The list is long and varied, but the Boskin “Obama Crash” on March 6th is a good place to start; then read anything Don Luskin writes — he is a reliable contrary indicator).

I assumed the drunks on the OpEd page did not care about what they did to your portfolio if you drank their Kool-Aid. But they were easy to avoid –you simply avoided that page, or read it and laughed. Smart investors could easily say “Go sell crazy somewhere else –we ain’t buying.” That was possible because you knew that the business pages were sacrosanct, always run with a steel-eyed objectivity that professionals could rely upon.

That is no longer the case. The lunatics now run the asylum, and henceforth, I am moving the WSJ into the column of “Stuff to read, but not take very seriously.”

It is puzzling that there are so few good outlets for financial news. You would think that with so much money at stake, a lot of media outlets would cater to the demand, but the opposite seems to happen: with so much money at stake, the investing industry (mutual funds, day traders, the stock-issuing companies themselves) can not allow the truth to go un-managed. So most media outlets focused on investing get co-opted by the investing industry. The Wall Street Journal stood apart for a long while, notable for its objectivity. Now it is sunk, though for an unusual reason – its become co-opted by the most radical elements of the Conservative movement. Very sad to see.

Every time a society is doing economically well, someone emerges to suggest that that success is based on innate differences that go back thousand of years. Meanwhile, when a society is doing poorly, someone argues that it is being dragged down by forces that have been pending since the beginning of time. The most notorious example was the preening that the West engaged in during the 1800s – Asians and blacks were naturally lazy, whereas white people were biologically superior. The grotesque reality is that such attitudes were used to justify genocide.

Anyway, now China is doing well and America is doing poorly, so David Brooks starts writing a eulogy for the US:

David Brooks: Asians place emphasis on context while Westerners place more emphasis on individuals. This seems like a gross generalization but it is robustly supported by hundreds and hundreds of studies. Richard Nisbett’s book, “The Geography of Thought” summarizes some of the evidence.

If you show Americans a fish tank, they’ll talk about the biggest fish in the tank. If you show Asians a tank they will make, on average, 60 percent more references to the context and the features of the scene. Western parents tend to emphasize nouns and categories when teaching their kids, Korean parents tend to emphasize verbs and relationships. If you show Americans a picture of a chicken, a cow and grass, they will lump the chicken and the cow, because they are both animals. Asians are more likely to lump the cow and the grass because cows eat grass. They have a relationship.

The mode of thought more common in Asia is better suited to the complex networks that make up the modern world. The contextual, associational style is simply more valid. The linear style we’ve inherited from the Greeks is less adaptive toward the modern age. I think the West may be doomed.

For my part, I think the hype about China is over done. The problems in the US economy were created by forces internal to the US, and they can be fixed by internal forces as well.

Daniel Lyons possibly the first article ever published in Newsweek that is both about the Internet and also true:

The past decade is the era in which the Internet ruined everything. Just look at the industries that have been damaged by the rise of the Web: Newspapers. Magazines. Books. TV. Movies. Music. Retailers of almost any kind, from cars to real estate. Telecommunications. Airlines and hotels. Wherever companies relied on advertising to make money, wherever companies were profiting by a lack of transparency or a lack of competition, wherever friction could be polished out of the system, those industries suffered.

Remember all that crazy talk in the early days about how the Internet was going to change everything and usher us into a brave new techno-utopia? Well, to get to that promised land, we first have to endure a period of what economist Joseph Schumpeter called “creative destruction,” as the Internet crashes like a tsunami across entire industries, sweeping away the old and infirm and those who are unwilling or unable to change. That’s where we’ve been these past 10 years, and it’s been ugly.

Let’s start with newspapers. You wouldn’t think that in an information age the biggest victim would be purveyors of information. But there you go. Newspapers are getting wiped out in part because they didn’t realize they were in the information business—they thought their business was about putting ink onto paper and then physically distributing those stacks of paper with fleets of trucks and delivery people. Papers were slow to move to the Web. For a while they just sort of shuffled around, hoping it would go away. Even when they did launch Web sites, many did so reluctantly, almost grudgingly. It’s hard to believe that news companies could miss this shift. These companies are in the business of spotting what’s new, right? Yet they were blind to the biggest change (and the biggest opportunity) to ever hit their own business. Watching newspapers go out of business because of the Internet is like watching dairies going out of business because customers started wanting their milk in paper cartons instead of glass bottles.

David Simon writes the single most ludicrous, misguided, uninformed post about the future of the newspapers that I’ve yet seen:

The true audience for this essay narrows necessarily to a pair of notables who have it in their power to save high-end journalism—two newspaper executives who can rescue an imploding industry and thereby achieve an essential civic good for the nation. It’s down to them. The rest of the print journalism world is in slash-and-burn mode, cutting product and then wondering why the product won’t sell, rushing to give away what remains online and wondering further why that content is held by advertisers to be valueless. The mode is full-bore panic. And yet these two individuals, representing as they do the two fundamental institutions that sit astride the profession, still have a card to play, and here’s a shard of good news: it’s the only card that ever really mattered. Arthur Sulzberger Jr. and Katharine Weymouth, publishers of The New York Times and The Washington Post, are at the helms of two organizations trying to find some separate peace with the digital revolution…

Melodramatic. Two brave souls have the power to save the noblest industry on Earth, the 4th estate, they can perform “an essential civic good for the nation”, but only if they act bravely and wisely. It is a good setup for a movie. How is it that Simon got so far out of touch with reality that he doesn’t understand how sentimental and over-heated this is?

Simon is so desperate to save the newspapers, that he wishes they could break the law:

Most of all, I know that here you are being individually asked to consider taking a bold, risk-laden stand for content—that antitrust considerations prohibit the Times and The Post, not to mention Rupert Murdoch or the other owners, from talking this through and acting in concert. Would that every U.S. newspaper publisher could meet in a bathroom somewhere and talk bluntly for fifteen minutes, this would be a hell of a lot easier.

This by itself says a lot about how doomed the newspapers are – that their supporters think the only way to save them is by breaking the law. Having written this paragraph, Simon should then draw the obvious conclusion – that there is no legal way to save the newspapers. But he is deep in denial. He has a strong emotional attachment to the newspapers, so contemplating their demise causes him too much pain – so he escapes into fantasy:

You must act. Together. On a specific date in the near future—let’s say September 1 for the sheer immediacy of it—both news organizations must inform readers that their Web sites will be free to subscribers only, and that while subscription fees can be a fraction of the price of having wood pulp flung on doorsteps, it is nonetheless a requirement for acquiring the contents of the news organizations that spend millions to properly acquire, edit, and present that work.

No half-measures, either. No TimesSelect program that charges for a handful of items and offers the rest for free, no limited availability of certain teaser articles, no bartering with aggregators for a few more crumbs of revenue through microbilling or pennies-on-the-dollar fees.

I’m familiar with “a miracle might happen” reasoning. I went through a lot of this when my father died: “The doctor says there is no hope, but a miracle might happen.” Of course, now, looking back, I can clearly see I was deluding myself. Simon is at an earlier stage. He has not yet started mourning because he believes the thing he loves can still be saved.

He then indulges a fantasy in which he is someday regarded as a hero (I assume he will someday be embarrassed that he wrote this):

And when the Justice Department lawyers arrive, briefcases in hand, to ask why America’s two national newspapers did these things in concert—resulting in a sea change within newspapering as one regional newspaper after another followed suit in pursuit of fresh, lifesaving revenue—you can answer directly: We never talked. Not a word. We read some rant in the Columbia Journalism Review that made the paywall argument. Blame the messenger.

Especially stupid is his dismissal of the idea that online ad revenue will someday be greater than what it is now:

Clearly, the product still moves. But to what purpose, when more and more readers rightly identify the immediate digitized version as superior, yet pay nothing for that version, and online advertising simply doesn’t deliver enough revenue?

He then makes a ludicrous comparison:

For the first thirty years of its existence as America’s primary entertainment medium, television was—after the initial purchase of the set itself—provided at no cost to viewers, instead subsidized by lucrative ad revenues. The notion of Americans in 1975 being asked to pay a monthly bill for their television consumption would have seemed farcical. Yet in the ensuing thirty years, we have become a nation that shells out $60, $70, or $120 in monthly cable fees; indeed, whole vistas of programming exist free of advertising revenue, subsidized entirely by subscriptions.

So, somehow the fact that Americans are willing to pay money to get more content proves that they are willing to pay money to get less content.

Maybe the most funny thing in his whole essay is where he compares the brave, visionary geniuses who run the television industry with the stupid, crass, profit-obessessed buffoons who run the newspaper industry:

But unlike television, in which industry leaders were constantly reinvesting profits in research and development, where a new technology like cable reception would be contemplated for all its potential and opportunity, the newspapering world was content to send its treasure to Wall Street, appeasing analysts and big-ticket shareholders. There was no reinvestment in programming, no intelligent contemplation of new and transformational circulation models, no thought beyond maximized short-term profit.

Oh, those damn newspaper publishers! Always obsessed with short-term profit! Why can’t they be more like the noble, far-seeing statesmen who run the television industry?

But here is the saddest paragraph of all, the one that truly shows how much Simon is gripped by the past, rather than what is to come:

In the newspaper industry, however, the fledgling efforts of new media to replicate the scope, competence, and consistency of a healthy daily paper have so far yielded little in the way of genuine competition. A blog here, a citizen journalist there, a news Web site getting under way in places where the newspaper is diminished—some of it is quite good, but none of it so far begins to achieve consistently what a vibrant newspaper, staffed with competent, paid beat reporters and editors, once offered. New-media entities are not yet able to truly cover—day after day—the society, culture, and politics of cities, states, and nations. And until new models emerge that are capable of paying reporters and editors to do such work—in effect becoming online newspapers with all the gravitas this implies—they are not going to get us anywhere close to professional journalism’s potential.

David Simon will only respect New Media once New Media is able to replicate what Old Media gives us everyday. And here, possibly, is the one and only thing that Simon and I agree on: New Media will never replicate what Old Media gave us.

This is reality: the newspapers will largely die, and nothing is going to take their place. There will be other forms of media in the future, but they won’t look or act like what the newspapers did.

Here is the only passage in the essay where he correctly notes that the newspapers have been dying for a long time, and the Internet is only speeding a long-term, secular trend:

Last, and perhaps most disastrous, the rot began at the bottom and it didn’t reach the highest rungs of the profession until far too much damage had been done. As early as the mid-1980s, the civic indifference and contempt of product inherent in chain ownership was apparent in many smaller American markets. While this was discussed in some circles, usually as a matter of mild rumination, little was done by the industry to address a dynamic by which men in Los Angeles or Chicago or New York, at the behest of Wall Street, determined what sort of journalism would be practiced in Baltimore, Denver, Hartford, or Dallas. If you happened to labor at a newspaper that was ceding its editorial ambition to the price-per-share, it may have been agony, but if you were at the Times, the Post, The Wall Street Journal, or the Los Angeles Times, you were insulated.

I’ve rarely read an essay where the author’s fear of change was so near the surface, so present in every sentence.

There are at least 2 ways to attack Simon’s ideas. One is offered by Brad Delong, who makes the case that the newspapers are often full of lies and misrepresentation, and so he generally finds his favorite blogs more interesting:

I am 6.5 times as likely to be happy that I have spent my time reading one of the top stories in my RSS reader as I am to be happy that I have spent my time reading one of the top stories printed by the New York Times and the Washington Post.

To some degree this is the “Daily Me” phenomenon: my RSS reader is now tuned to bring me things written by people I learn from, while the editors of the Washington Post and the New York Times select stories on the basis of… bizarre and incomprehensible algorithms. To some degree this is because this is because the WP and the NYT are pitched at a level far below the one I want to read at, in part because they think their audience is less clued-in than I am (Peter Baker and Helene Cooper; Dan Balz) and in part because their reporters are out of their depth (i.e., Tobin Harshaw). In part this is because they are unprofessional (i.e., Mark Mazzetti and David Johnston not situating their article in its proper context in the journalistic enterprise begun by The One-Percent Doctrine). To some degree this is because their reporters know nothing about how representative their anecdotes are and so have absolutely nothing interesting to say (Michael Wilson and Solomon Moore; Michael Rosenwald)….

But there is a bigger problem: the army of small start-ups that want a piece of the New York Times’s market. Last year I spent $30,000 to start a new political web site. That is, I spent a small sum, and attracted a small audience. But there are thousands of entrepreneurs like me. Collectively, we spend millions each year, trying to establish sites that can take market share from existing newspapers. And every dollar we spend is a torpedo aimed at the old institutions of media.

In the old days, it took millions of dollars to set up a new newspaper. USA Today took 15 years just to break even. The large scale of the needed capital acted as a barrier to entry, and protected the newspapers from competition. Now a new web site can get going for just $100,000 (I’ve previously written about the costs of websites). Nothing can bring back the old days, when the newspapers could generate high margins, safe behind the barriers that kept competition limited. But David Simon doesn’t see this. Consider the static, unchanging nature of the world in which he thinks he’s living in:

Antitrust considerations prohibit the Times and The Post, not to mention Rupert Murdoch or the other owners, from talking this through and acting in concert

See, in Simon’s world, all of the owners of all of the media companies are known, and could be called together to meet, if only it weren’t for antitrust considerations. What Simon doesn’t see is the vast army of entrepreneurs who are just off-stage, waiting for the right conditions, ready to strike.

My world is very different from Simon’s world. Here’s the world that I live in:

1.) Consumers do not want to pay for online content, so if the newspapers put up pay walls, then entrepreneurs like myself will jump up and down with pure joy, and call in all our favors, to put together the funding for new companies to replace the old newspapers.

2.) However, if a miracle happens, and suddenly consumers are willing to pay for online content, then entrepreneurs like myself will jump up and down with pure joy, and call in all our favors, to put together the funding for new companies to replace the old newspapers.

Either way, more funding will continue to be invested in online media ventures, and the endlessly growing supply will drive down everyone’s margins. More so, we are in for a prolonged period of over-supply, which will drive down everyone’s margins very low, so those businesses that were built around the assumption of healthy margins (and that would include the major newspapers) are going to go bankrupt. A prolonged period of very low margins will mean that only those ventures that are built to survive very low margins will, in fact, survive. And, obviously, the web-based ventures, free of the costs of printing plants and distribution networks, sometimes even free of having an office, can get by on some extremely narrow margins.

There are no scenarios in which the newspapers survive.

Jory Des Jardins writes with nostalgia about what print media used to be like:

I’m sure if I had stuck it out a bit more and not taken a new media job five years in I might have made more of a go of it. But things discouraged me about traditional media. It had an established power structure that made it nearly impossible to get noticed. I wrote things I was proud of on the side, while editing more established writers in the waking hours and writing uninspired copy as a freelancer. But I hadn’t really established a voice that was worthy of cashing in favors from editor friends of mine.

…I’d only hoped I would be able to pursue this growing interest in a model counter intuitive to the people I used to work for. A model that democratized media, to a large extent, and made possible a notion terrifying to most people like me who hinged their self-worth on “making it” in traditional media: that there’s a whole helluva lot of talent out there and it ain’t all on the Hearst, Conde Nast, or Time Warner payrolls. Traditional media just took in whom they could fit, who matched the pedigree, or who had an uncle who could introduce you to the editor, or who had this random bit of luck and was seen for what she could produce, and sometimes bonafide talent. But so may others could not even make it to the filter, let alone make a living at it.

Back in my print days, there was something so alluring about being one of a few selected, whose name would be committed to print. And there’s a whole community of folks, I’m sure, who still hold print sacred. I’m one of them, even as someone whose name has only made it via her work in new media. I fretted so long about being a part of it that even while it’s suffering I promise to someday return — if it will have me. Many bloggers who are doing just fine building platforms online still look at the book deal as the summit of success. I’ll know I’m fully evolved when I couldn’t care less about hardcover, softcover, or any cover.

Traditional media was hierarchical and often unfair. One’s actual talent was often overlooked due to the personal politics inside each organization. It is hard for me to feel nostalgia for the old model, though possibly I feel a slight nostalgia for the great era of photojournalism, when people like Henri Cartier-Bresson were at work, an era which was funded by the mass circulation magazines.

But all business models die, eventually. In the modern era, we’ve achieved the freedom to constantly re-invent ourselves. While this is occasionally stressful, it is a freedom that people have spent centuries fighting to establish. And this freedom is one of the most exciting aspects of being alive during this era. Karl Marx has a reputation for being critical of market based economies, but few people described our era as perfectly as he did:

Constant revolutionizing of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones. All fixed, fast frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new-formed ones become antiquated before they can ossify. All that is solid melts into the air, all that is holy is profaned, and man is at last compelled to face with sober senses his real condition of life and his relations with his kind.

Penelope Trunk offers another reason why old media is doomed:

So we don’t need stupid rules about conflict of interest for people who are putting themselves on the line. That rule is for old media, where writers were putting only the brand of the newspaper on the line. In old media most journalists were no-names, writing under big (newspaper) names. So if they wrote something moronic, so that they could increase the value of a stock they held, or, maybe, get more oral sex, they would put only the newspaper brand at risk. Not their own.

Which means that the arcane conflict of interest rules are to protect the newspaper, not the readers. And this, by the way, is why newspapers are going down: because they are more about themselves, and their hierarchies, and rules and structures, than they are about what their readers want. Readers should not care about the business dealings of the writers or their publishers. Readers just want good content.

This video is only 6 minutes long, and, if you have the slightest interest in the issue of the future of media, then it is very much worth watching. Jacek Utko relates his own experience using design to rescue newspapers in Eastern Europe. I think this idea can be boiled down to: “Newspapers need to become more like magazines.” That is a solid idea. After all, before the financial crisis, magazines were doing well, and they will probably do well again as soon as the recession ends.

One of the strongest arguments for protecting today’s newspaper’s is that they are vital sources of objective information. However, in practice, they are less altruistic than they are supposed to be. Some of the less pleasant realities of journalistic practice undermine their claim that society will suffer harm if daily newspapers disappear.

Matt Yglesias comments:

[P]art of the peculiar set of institutions that constitutes “journalistic ethics” is the idea of a “beat-sweetener.” This means that when a new set of powerful people is put into place, and most of all when a new presidential administration comes to DC, you see a flurry of journalists penning lavishly flattering profiles of different key players. The idea is that the key player in question and his staff will then become a useful source of future information. I don’t think anyone ever quite admits that a piece they’ve handed in is a beat-sweetener, but people in the game generally know one when they see one and it’s frequently joked about and so forth.

Duncan Black points out how much this underines the idea that society can not survive without these media institutions:

I think the main issue with beat sweeteners is that they’re part of a whole host of journalistic practices which aren’t especially pretty… and more than that, they’re practices that the public is largely ignorant of. There’s a lack of transparency in journalism which is often at odds with the great degree of self-righteousness regularly exhibited by some in the profession. You can’t simultaenously be a superhuman devotee to truth telling and someone who writes stories deliberately to curry favor with sources. Such practices might at times be, on balance, good for the overall goal of providing information for readers (though frequently they’re probably just good for the overall goal of personal career elevation), but they’re also a reminder that journalism as practiced is not the pristine objective truth machine that some suggest when writing columns about how bloggers suck.

Clay Shirky is brilliant:

Revolutions create a curious inversion of perception. In ordinary times, people who do no more than describe the world around them are seen as pragmatists, while those who imagine fabulous alternative futures are viewed as radicals. The last couple of decades haven’t been ordinary, however. Inside the papers, the pragmatists were the ones simply looking out the window and noticing that the real world was increasingly resembling the unthinkable scenario. These people were treated as if they were barking mad. Meanwhile the people spinning visions of popular walled gardens and enthusiastic micropayment adoption, visions unsupported by reality, were regarded not as charlatans but saviors.

When reality is labeled unthinkable, it creates a kind of sickness in an industry. Leadership becomes faith-based, while employees who have the temerity to suggest that what seems to be happening is in fact happening are herded into Innovation Departments, where they can be ignored en masse. This shunting aside of the realists in favor of the fabulists has different effects on different industries at different times. One of the effects on the newspapers is that many of their most passionate defenders are unable, even now, to plan for a world in which the industry they knew is visibly going away.

The same thing has been happening in the American auto industry.

Sam Zell made a terrible mistake when he bought the Tribune Company:

When the Tribune Company announced that it was filing for bankruptcy, last Monday, Sam Zell, the man who bought the company a year ago, for $8.2 billion, said that its problems were the result of a “perfect storm.” You take readers and advertisers who were already migrating away from print, and add a steep recession, and you’ve got serious trouble. What Zell failed to mention was that his acquisition of the company had buried it beneath such a heavy pile of debt that any storm at all would likely have sunk it. But although Zell was making excuses for his own mismanagement, the perfect storm is real enough, and it is threatening to destroy newspapers as we know them. Layoffs and buyouts have become routine. The Miami Herald and the San Diego Union-Tribune are reportedly on the selling block, while lawmakers in Connecticut are trying to keep two newspapers there afloat. Even the New York Times Company has slashed its dividend and announced that it would borrow against its headquarters to avoid cash-flow problems.There’s no mystery as to the source of all the trouble: advertising revenue has dried up. In the third quarter alone, it dropped eighteen per cent, or almost two billion dollars, from last year.

Newspapers are simply a method of delivering ads:

It turns out that subscribers are more expensive, not less expensive, than online readers. Yes, they pay more — but they’re not paying for intensive reporting, experienced editors, and the like. They’re paying for printing presses, mobbed-up newspaper delivery operations, and the whole enormous physical infrastructure involved in getting thousands of tonnes of newsprint delivered to millions of front doors every morning. It’s a hugely expensive operation, and its costs are nowhere near covered by subscription revenues.

There’s an old saying that you’ll never understand newspaper economics until you understand why newspaper vending machines are designed so that you can take as many papers as you like for your quarter. Newspapers are, first and last, devices for delivering ads to readers. It’s the ads which account for all the profits, not the cash coming from subscribers or people who buy their paper at the newsstand. Yes, news itself is free, nowadays. But it always has been. What we’ve been paying for all these years was never news, it was papers.

Lately there have been a lot of articles about the newspaper industry. We are told that this recession is killing off newspapers, everything is moving to the web. There is some mourning, people wonder how journalism will survive once the newspapers are gone. But consider the other side – where will the ad dollars go? When the next boom hits, America will have a lot less newspapers than it has had in the past. And much more of the public will think it natural to get their news online. Doesn’t it seem that at some point quite a bit of ad revenue must become available to online ventures?