Like books, periodicals and newspapers are facing big changes. John Gruber, author of the blog Daring Fireball, has been following the developments in publishing pretty closely because of his interest in the industry. The main problem both magazines and newspapers face is that the internet provides ready access to information. So that aspect of news reporting—information aggregation—is gone forever. Everyone has access to the AP wire, foreign news in real-time, street cams, blogs, Twitter feeds, etc. There are even more sources of raw information available to the public than the news media used to have a monopoly on when they were the gatekeepers. All they really have left are investigative reporting, exposition, and editorial writing. Of those, editorials are what bloggers have been doing best, and many of them are pretty good at explaining background and connecting related events to current news, so many newspapers and magazines don’t even hold much of an edge in expository writing anymore. As some people started pointing out, news reporters aren’t doing a whole hell of a lot of investigative reporting either these days. Sure, there are news staff who are more experienced than bloggers, better writers, better trained, but there are a lot of people blogging, and quite a few of them are doing it professionally, with the same kind of training and background behind them that those news reporters started their careers with.
What it really comes down to is “dinosaurs and mammals,” Gruber says, and I agree. News companies have become big and bloated. A huge chunk of the personnel at a typical newspaper or magazine do not contribute content or perform editorial services. In contrast, even the bigger pro-level news blogs and sites have virtually no dead weight. Everyone contributes, everyone wears different hats, no one can get away with just working in “management.” They’re smaller, leaner, faster than the large top-heavy news corporations they’re competing with, and that’s why they’re taking over more and more of the niches news corporations used to have.
Periodicals had three main sources of income: newsstand sales, subscriptions, and advertising. Newsstand sales are gone. No one cares enough to buy print for ephemeralities like news, and non-tangibles generally don’t feel worth paying for. What might work is giving people something different from web content, something that feels worth the cost. Apps on something like the iPad have promise. People are okay with paying a couple of bucks for something on their portable device—especially if it’s well designed, has useful interactions, and offers a good reading experience. They’ll even pay small subscriptions through a convenient service like iTunes. But they’ll resist paying for content on the plain old web, partly out of habit and partly because of competition from other sources.
They’ve tried putting up pay walls in an attempt to get people to pay subscriptions. That hasn’t been working so well. It shows that the people running these companies don’t seem to know what their real business is. How do you get known as a good news outlet? People quote you, refer to you, and point their contacts in your direction as an authoritative source. Putting up a pay wall is like setting tariffs on goods you’re attempting to sell in a foreign market; it’s back-asswards.
You want more traffic, not less. You want people to access your information and bring even more people your way through linking and word of mouth. You want influence and presence in people’s lives. You don’t do that by setting a cover charge and turning away people at the door. It’s not an exclusive club you’re aiming for. If it is, you’re in the wrong segment of publishing.
The only strategy that will work on the web as of right now is advertising, and virtually all of the news companies simply require more revenue than ads bring in to support the personnel they have. They are making money, just not enough to support all the dead weight. And let’s face it, the guys in charge of making these decisions are Exhibit A examples of “dead weight.” Of course they’re not going to make their jobs obsolete, because they like their big paychecks. So they’ll steer their respective companies right into the wall just as long as they get a good severance package.
Some will argue that depending on advertising as the main or sole source of income is bad because then you don’t concentrate on your readers, but instead on your advertisers. I think that’s completely wrong for two reasons: If you don’t write good articles that people want to read, you don’t have an audience to sell ads to. And periodicals have always made far more from advertising than they ever made from subscriptions and newsstand copies, so they’ve always been more beholden to their advertisers than their readers.
The way I think newspapers and news magazines can survive is to evolve. Local papers are still mostly profitable because they have their niche; local news. Bigger organizations are going to have to become much leaner and faster, or they’re going to be carrion for the new furry denizens of the news world. They’ve got two options for revenue streams: advertising (as always) and subscriptions.
Don’t get me wrong, I think subscriptions can work, but so far periodical publishers have been going about it the wrong way. If they want to charge subscriptions, the way to do it is through a central service to make it easy for people to spend their money on you, and you have to offer a fundamentally different experience from the web version. One of the reasons Apple got people to pay for music from iTunes when those people could have gotten it from other places was because they made it easy. You don’t have to put in your information every single time, you don’t have to manage multiple charges and subscriptions. You can buy things on impulse.
Frankly, the news corps have demonstrated that they don’t have the know-how or the will to make a service anywhere near as good as iTunes on their own, so if they’re smart they’ll use Apple. (I would say, they should use Amazon’s Kindle or Barnes & Noble’s Nook too, but for magazines the lack of color is an enormous stumbling block. It’s probably all right for newspapers though.) The promise of iTunes and access to the iPad hasn’t escaped all of the publishers, but so far most of their implementations suck, and the value isn’t there.
Most news magazines, for instance, break even at about $1 a copy for a paper version. These guys don’t realize that print is dying, so in an obvious attempt to avoid cannibalizing their vanishing paper copy sales, they’re charging an exorbitant $5 per issue for access to the magazine through an iPad app when subscriptions for the paper versions are running between $12 and $15 a year. They’re setting up the digital versions for automatic failure, while their print versions go unsold at the newsstands. Considering that every halfway-aware consumer knows that virtually none of the logistical and material costs apply to a digital version, few people are going to feel that it’s worth it to pay that much simply for access to it on their mobile device.
So if news periodicals want to survive, they’re going to need to cut personnel back to those who can do writing, editing, design, and some of the support tasks. They should leverage proven online content services like iTunes and the iPad, along with possibly Barnes & Noble’s and Amazon’s e-readers. They should make sure that their respective applications are clean, well-designed, and offer a good reading experience. And they should make sure that their prices are appropriate; neither too low to meet their actual operating costs while generating sufficient profit, nor so high that readers automatically dismiss them in favor of free alternatives.