News media implosions are decimating journalism. The medium is dissolving in the vortex. It’s being broken down into its most basic components: A content producer, and an outlet.
It’s even less realistic in media. The trouble with things that run on rails is that when they derail, there’s no other working methods. That’s happened to news media. The advertising is the revenue, not the product. Money has to come from somewhere, and for news media, content is the only real product for sale. But charging people for journalistic content isn’t too popular.
So the answers are “subscriptions”, or impulse purchases of content, in theory. In practice, that puts costs on users, in the middle of a super recession when they don’t want costs. So the media outlets are basically opening a hot dog stand and hoping for business. They can do cut articles, do teasers, and people have to pay to read the rest of it.
Whether or not that’s realistic is another matter. Whether it produces consistent sales and revenue is highly debatable. Will people buy an online newspaper like a hard copy? I doubt it. There’s a real possibility people would swing back to hard copy, or just do occasional downloads.
Subscriptions and purchases have a real bottom line: Price. There are some bad analogies: Apple’s iTunes, for example, isn’t a model for selling news. Music lasts forever, news is in the history books tomorrow, as a digest version.
(All due respect to the Huffington Post link above, but really, it’s not, and can’t be, the same thing.)
There are also some good analogies: Kindle is a case in point, where revenue and demand have been going up. The reason for this seems to be the format, where the transitory nature of news is reflected in simple, low cost purchases and a low cost medium.
However, at the bottom of these marketing exercises, is another reality which should be getting attention and isn’t: Cost of content production to producers of media, like writers and journalists, and production costs to outlets. Neither can afford to be a charity, and a lot of the grief is being caused by costs that must be given priority as the main problems to solve.
The writer/journalist cum outworker has costs, too. Business models like this don’t even start to address the costs of just writing an article. One cent a word isn’t a massive incentive, even for me, who averages about 3-4000 words a day of original material, for some reason. Why should I earn less than someone who’s sticking their byline on an AP article? I provide more real content.
If you’re getting paid as a “journalist” to write occasional 400 word articles, the problem is eating and paying bills. And that’s exactly where a lot of journalists are winding up.
Have a look at this problem as a physical thing. While demand for content of all types is going through the roof:
1. Revenues from the old business models are getting torpedoed,
2. The content producers are getting dismal returns,
3. The traditional outlets are becoming extinct,
4. The digital outlets are saturated,
5. More journalists are competing for fewer jobs,
6. The new business models aren’t proven earners, discouraging big capital investors, who are needed to create the volumes for sales
7. Ad revenue is extremely tight, thanks to the meltdown
So: What’s a working business model, in this environment?
Short answer: It’s not a “model”, it’s concurrent “models”. No one methodology addresses everything, at this point in time.
The key is the market itself. The digital deluge has created market segments which have never existed before. That’s where the demand for content is coming from, and that’s what the business models have to address.
This is where the money comes from. News media have been evolving, like it or not, well away from the old content bases, but not fast enough to keep up with the money or the audience. The public is no longer a collection of generalists. The world is awash with special interests. Meaning for the highly generalized news media, the market segments have effectively diversified away from them, not to them.
So the first business model has to be about marketing content. That’s good for many journalists, who tend to specialize in topic niches. Niches are findable, but those niches could be big money earners if the outlets were handling them effectively. There’s an immediate cash value in supplying this market, which is interest driven, not general information available from anywhere.
The big news media can handle multiple market segments very easily, if they work according to the market, and stop trying to get the market to work according to them. There could actually be a shortage of journalists, in many areas.
The second business model is costs, both to content producers and outlets. We’re in the early stages of the worst economic conditions since the Depression. Costs have to be realistic. Content producers have to live, and outlets can’t afford to be doing massive outlays.
Solution: Retainers plus sales deals. Writers and journalists can schedule their work, and do multiple jobs across many roles pretty easily. Retainers, if there’s a few of them, add up. So do sales. The outlets shouldn’t have to pay for things that don’t sell, so they can work on performance bases. Those can be costed effectively, and budgets don’t have to creak and groan.
The third model is syndication. Other media don’t mind paying for material, as long as it’s useful to them. Some news sources and their content producers are natural sources across multiple market segments. This capacity usually isn’t developed too well. Outlets and producers can benefit from the distribution capacity of the outlets across the markets. Syndication is easy, and it’s a well understood revenue base. No miracles of innovation required, just a lot of emails.
The fourth model is market development. We’ve all seen waves of new markets arising. To say that news media has been haphazard in its recognition and development of new markets would be flattery. The fact is that media either rides these waves, or drowns under them. There needs to be space for prompt development of media for new market segments. This is really a market research function, in terms of marketing, but that’s what marketing is supposed to do, and it hasn’t been doing it.
The fifth model is innovation. Strangely, with the biggest audience in history, news media isn’t really trying anything particularly new. This isn’t as risky as it used to be, either. Digital versions of anything are relatively cheap to produce, and can go viral at the click of a Facebook page.
The sixth model is services. News media can handle services, particularly in market segment oriented media. What cashflow can they generate from services they can provide? Nobody knows, because nobody's tried it. If PC World, for example, (which is a good working model of a market segment oriented news medium) were offering services in their line of news, you think it'd sell?
Most news media has been operating on the talking heads approach for so long that it’s simply not hitting anything else. As of YouTube, that’s a museum piece. If it can be put on a computer screen, it will be looked at, talked about, and God knows, maybe even sold.
Journalism and news media can have as many crises as they like, but you really don’t
have to have them. Smell the roses, don’t get buried by them.
One other thing: What would a 1200 word article like this be worth on the New York Times or Huffington? That's what I mean about relative values of content. If you're prepared to pay for content, you can get content. Journalists need incentives, not insults.
