Shoptalk: Only Entrepreneurs Will Save Journalism

By: Howard B. Owens
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Water. It’s everywhere. If it hadn’t already happened, who would think of bottling it and turning it into a business? Mother Nature seems to have a monopoly on the water business.

For most of the 20th century, no entrepreneur thought much about competing with Mother Nature. With the advent of safe and efficient municipal water supplies and chlorination, the bottled water business that thrived in the 19th century dried up before the Jazz Age.

Then, along came Perrier in 1977, at a time when yuppies worried about polluted water sources and yearned for things that seemed fresh, clean and trendy. Today, bottled water is $300 billion industry.

From A&P, Sears & Roebuck, U.S. Steel, IBM, and Microsoft, many companies once feared as monopolies suffered declines not because of government intervention, but because of competition and failures of business leaders to invest, adapt and innovate.

As journalists fret about Facebook and Google, there are periodic calls for Mark Zuckerberg or Sergey Brin to set aside just a small portion of their vast fortunes and fund journalism. These pleas are always directed at making sure journalists can keep covering news. There’s never a mention of funding R&D and building new business models. Most journalists seem to have concluded, with nary a glimmer of doubt, that journalism is doomed without philanthropy.

Craig Newmark is the hero of the month because of his $6 million commitment to various journalism organizations. This is a worthy and laudable act by Newmark, but as near as I can tell, based on the list of organizations he supports, such as Poynter, the Sunlight Foundation and the Center for Public Integrity, these are all organizations focused on the content side of the business.

Journalists love these donations, but what happens when the funds dry up? The need across the nation to keep journalism functional from one generation to the next is billions of dollars bigger than charitable contributions could ever hope to sustain.

Over the past 20 years of my online news career, I’ve seen many praiseworthy efforts from various nonprofit organizations aimed at helping journalism deal with the challenges it faces in the era of digital disruption, but these funds have largely been funneled to content-side endeavors. Where grant funds have gone to technology and business model ideas, the amount provided has been a pittance compared to the need.

Hence, the results have failed to provide any sustainable path forward for journalism.

Here’s the issue: Journalism doesn’t have a content problem. It doesn’t have an audience problem. Yes, we live an era when the president calls what we do “fake news” and poll after poll says public trust is at an all-time low, but it’s not like trust was all that high in the 1990s, in an era of record profits. And it’s not like we’re alone. Trust in every American institution has been falling since Watergate.

There’s no amount of money that is going to fix the trust issue.

While it’s noble to fund better functioning newsrooms and new ways of producing content, those donations are unlikely to produce new revenue. There will be no new business models that emerge from those scarce resources going to essentially more or better content production. These initiatives won’t help us reach bigger audiences, except on the margins, given the massive reach of news reporting in current markets, so these funds really don’t help build businesses.

Charitable contributions have a short life span. When the money runs out, it’s gone. They are feeding fish to the poor instead of giving away poles, hooks, and worms at a time when a few more lines in the water could help feed a whole village.

Again, we don’t have a journalism problem. We don’t have an audience problem. We have a technology problem. We have a business model problem. That’s where investment money needs to flow. The more ideas funded, the more ventures backed, the better chance one or two successful business models emerge.

While the nonprofit model has long had a place in the journalism landscape and will continue to be vital to a functioning democracy, the news business thrived once because it is first and foremost a business. The free market is the best way to fund the greatest diversity of voices and ideas, and competition always makes for the strongest companies and the best journalism.

Howard B. Owens is founder of Album Corp (albumcorp.com) and publisher of The Batavian and the Wyoming County Free Press, both online-only news sites in Western New York. A full version of this article can be found at bit.ly/2pyoPYq.

Published: July 19, 2017

8 thoughts on “Shoptalk: Only Entrepreneurs Will Save Journalism

  • July 19, 2017 at 7:22 am
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    As one of those entrepreneurs, I have to agree with the overview of the problem, though I question the conclusion that this is a problem that technology will solve. Hoping that somewhere somehow there will be a gee-whiz technology moment for a business model that will reverse the current trend with the news industry seems less than a solution than a parent reassuring a child that everything will work out in the end.

    Rather the main thrust for a sustainable solution is to treat our editorial content as if it has value to the readers we are supposed to be serving and only allow those willing to honor that value to have access to the content. We must stop treating our news websites as if the advertising is the product and the news content is little more than the styrofoam peanuts dumped into a cardboard box.

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  • July 19, 2017 at 10:09 am
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    Adding finer point to Howard’s smart assessment: It’s not just a new, gee whiz tech solution that will save journalism. Rather, it will be a simple but unique implementation & leveraging of current and cutting edge tech. This will help create sustainable business models for hyper-local local news/info/journalism…and the ancillary enabling of local commerce.

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  • July 19, 2017 at 10:32 am
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    My company has built a profitable news model and now have daily online newspapers in three markets, Williamsburg, VA (WYDaily), Virginia Beach, VA (Southside Daily) and Wilmington, NC (Port City Daily). We own local radio stations in each market which we use to drive people to read our 100% local, news content. In the trailing 12 months, our publications had over 3 million users and 10 million pageviews and our revenue is up over 18% from 2016. Our reporters are all multi-media journalists and our editors truly understand how digital engagement is different than print readership. We’re growing, and are very excited about the future for local news and great journalism. Tom Davis

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  • July 19, 2017 at 10:44 am
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    This column raises some excellent points. However, I can say that we have tried many different approaches in recent years, in an effort to reinvent our business model. Among many other things, we tried creating hyper-local sites. We tried paywalls. We tried super low-cost advertising rates, custom publishing, sponsored publishing, and more. What we ran into over and over again was the perception that everything should be “free”. Our audience absolutely loves the content, but neither they nor the businesses we deal with are willing to pay anything for it. Clearly, that’s what the internet has bequeathed us.

    In the end, the things we have done that worked best for us had absolutely nothing to do with producing legitimate journalism as we think of it. And it is those things that are now sustaining us.

    So as much as I agree with the premise here, my question is still this — how in the world do you get folks to pay for something they firmly believe should be free? No matter how creative the entrepreneur, he/she still must have a viable revenue stream to drive any business.

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    • July 19, 2017 at 2:49 pm
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      Tim, thanks for weighing in.

      As you know, I’ve been a part of many so-called innovations at various news companies. At the time, I thought I was doing the right thing. Looking back on it, our efforts were too little, too underfunded, too dependent to the mother ship. I think back on proposals I tried to pursue that went unfunded because I couldn’t articulate an immediate revenue impact. Some of those ideas are now in use on non-news sites that are taking our audience and our revenue.

      Clearly, there is no future without finding a viable, sustainable way to convince readers/users to pay. That’s a technology and business model problem that hasn’t been adequately explored. The thinking behind efforts so far has been very limited in scope. There are still ways to better engage audiences and stoke a desire to provide financial support that haven’t been tried yet.

      When I speak of technology, I’m not thinking of ‘gee whiz tech.’ That approach rarely works. I’m thinking of more basic blocking and tackling. However, until you spend what’s needed to truly innovate, you don’t know what the possibilities are.

      I wrote this piece long before the recent news about the former NAA trying to get an anti-trust exemption. That sort of thinking is the exact opposite of what I’m talking about. That’s raising the white flag and making news dependent on entities that have no skin in the game. What I’m really saying is that funding for innovation in news is hundreds of millions of dollars short of what it should be. To compete with Silicon Valley, you’ve got to spend like Silicon Valley. We should stop expecting Google or Facebook to save us or even be our friends.

      Reply
    • July 19, 2017 at 6:52 pm
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      Thanks, Tim … I think I misunderstood how the comments here are threaded. Looks like I was responding to Frank when I thought I was responding to you.

      Reply
  • July 19, 2017 at 1:51 pm
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    Excellent points. I fully agree.

    Reply

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