The Decline and Fall of Old Media

By Dan Meadows

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I wrote a piece a while back about how the prevailing attitude toward print publishing is that is dying a rapid death. In that piece, I refuted that point, claiming that print is not, in fact, dying but undergoing a fundamental shift from the monopolized world of old media and large conglomerates to one of smaller, more reader-centric companies that will lead to a rejuvenation. Since then, I have read much on the plight of media companies struggling to find a way to turn the tide. Here is some of what I’ve learned, all of which supports my theory that those who refuse to change will die out.

If you haven’t heard, there was recently a semi-secret meeting in Chicago between top publishing executives to discuss how they could conspire to force us all to pay for the consistently declining quality of content they’re producing. The main points of agreement seemed to be that they should move their content behind locked down pay-walls and extort fees from search engines such as Google for having the audacity to link to their content. I say go for it. If these companies want to sequester their content away from the open internet, expecting people to pay for what they already get for free, and remove themselves from open searches of the net, then more power to them. All the better to hasten their demise and move aside for those of us who might actually be able to use the tools of new technology to find a way to make a buck.

There are several competing possibilities for how big publishing can achieve this, most of which following an iTunes-like approach of collecting publishers together under one banner and selling access to their content in a number of ways, ranging from overall subscriptions, bundled content, and micro-payments per article. One particular effort, Journalism Online LLC, touts the value of this kind of makeup not to better service readers or advertisers, mind you, but to allow publishers to collect vast amounts of personal info about readers and exploit that to create massive rate increases for the publishers themselves. Yeah, that sounds like a winner.

A consultant for Journalism Online LLC, Merrill Brown, actually went on to say, and I quote, “We would argue that very few high quality products have ever been delivered for free.” Considering that I’ve spent the past twelve years producing high-quality free distribution publications, let me be the first to tell Mr. Brown exactly where he can shove his argument.

Providing Tons of Filler

I also ran across an article about Dean Singleton, the chairman of the Associated Press, you know the organization that provides tons of filler so your local reporters don’t have to, threatening to go all Digital Millennium Copyright Act on websites and search engines who so much as quote an AP article. This from an organization who does little more than pick up articles from its subscribing members, slap an AP copyright on them and pass them on to other members. According to the AP, to quote even five words out of one of “their” articles, you owe them $12.50. Never mind the concept of Fair Use, or the long-standing journalistic tradition to properly site and build stories from other’s work, you quote the AP, according to Mr. Singleton, you’re a thief. Even just printing the headline of a piece is enough to “steal the essence of the article.”

Then there’s this collusion meeting, and let’s call it what it is, collusion. Certainly, there are highly paid anti-trust lawyers who will argue otherwise, but when the heads of the largest companies in the industry gather together to discuss how to collectively market and charge for their work, that is the very definition of collusion. One publishing executive at this meeting, Walter Isaacson, former editor of Time Magazine, actually said, and again I quote, “paid content models are necessary to protect creativity.” I had to read that sentence three times, in fact I’m snickering right now just typing it, and had to drag myself off the floor wiping the tears of hysterical laughter from my eyes. The very people who have consistently devalued creativity for decades during their enormous profiteering efforts are now the defenders of creative freedom? Wow, these guys truly have no shame. According to Moody’s Investors Services Senior Analyst John Puchella, on average, the largest media companies spend a paltry 14% of their budgets on content. The very products by which they hope to make these enormous sums of money, and they can only manage to invest 14% in its development and production. Maybe that’s what he meant by protecting creativity. “We want you to make products that people will willingly shell out for, we just aren’t going to give you any resources to do it. Be creative.”

Now let’s talk about boxing for a minute because I think there are some interesting parallels between the former Sport of Kings and the path the newspaper industry is taking right now. There was a time where boxing was one of the biggest things going. A big fight was like the Superbowl. Then, in the mid to late 1980s, with the emergence of cable television, they made a bad choice. Where other sports, most notably the NFL, NBA and Major League Baseball, took advantage of the new media technology that was growing every day, boxing chose to put its major events almost exclusively on pay-per-view. Locking their products behind a hard pay wall may have made them a quick buck, but it cost them dearly in exposure and interest. Boxing no longer holds any relevance to our society outside of a small and shrinking minority of fans. Quick, name the heavyweight champion of the world. Don’t feel bad, I don’t know, either. I wouldn’t hesitate to say that if boxing ceased to exist tomorrow, most of us wouldn’t even notice. And it all happened because the sport chose to erect pay walls around its products rather than adapt to a changing media world. Sound familiar?

The Kindle, Another Pipedream

The Kindle is another pipedream that newspaper publishers are grasping at for hope. For those of you who don’t know, the Kindle is a tablet style reader produced and sold by Amazon ostensibly to provide a platform to sell digital books. Recently, Amazon released a new, double-wide version of the reader that some have clutched onto as a means of distributing electronic newspapers for pay. Why someone would pay to read what is essentially a scanned copy of a newspaper is a little confusing to me, plus the Kindle updates things only twice a day and has no open internet access, which means no dynamic functions, links or anything that makes the internet stand out from a static newspaper. The device costs nearly $500, which pretty much prices out most of the country. But even at that, distinguished newspapers like the New York Times and the Washington Post are offering Kindle subscriptions to their work. Unfortunately for them, because Amazon controls the entire process and owns the rights to the primary device, they collect upwards of 70% of the subscription fees from the papers just for the right to use the device. And this is what passes for a positive development for newspapers today.

My entire point is that pay walls won’t work, shutting out or extorting huge fees from search engines won’t work, stretching the copyright laws to stop people from even referencing your articles won’t work. What these efforts will do, however, is to further shrink these companies relevance and usefulness to our society. They seem to think that they hold such an important place in our lives that people will happily fork over more money just because they demand it of us. Well, just look at this area. There are no fewer than 10 websites and blogs, including this one, who cover local issues in this area, and some of them do it very well, sometimes more in depth than the supposed professionals. And this is just a small corner of Maryland. Imagine the vast network of sites that exist in a place like New York, with more coming every day. The idea that local coverage will vanish if newspapers go away is just foolish. And it’s arrogant. But what can you expect from corporations who have owned a virtual monopoly on coverage for so long?

Industry is in Full Panic Mode

None of this is particularly surprising. The industry is in full panic mode, unwilling and unable to find a means of adapting to rapidly changing conditions, and they are going on a last ditch offensive. We all know how well that worked for the music industry before they were forced to conclude, after years of rapidly declining sales and profits, that maybe selling digital music online is actually a better idea than suing your customers. So I say again, adapt or die. If the largest players in the industry are so locked in to the notion of control and pay walls, then enjoy that. It will only hasten their demise. And for you publishing executives who are so frustrated and upset that people aren’t willing to do whatever you tell them and have the audacity to refuse to pay whatever you demand of us to support your profit margins, don’t go away angry. Just go away.

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Thanks Dan for allowing us to publish this piece on old media.  This is an important topic to us at Someone Noticed and your insights are appreciated.  Here are a few links to some earlier submissions by Dan

Publishing is a Dying Industry

Observations on the Publishing Climate and the SPCA

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6 responses to “The Decline and Fall of Old Media

  1. Dan, do you pay for a subscription to cable TV or satellite TV? Do you pay extra to get HBO or Showtime? Years ago people said “no one will pay for tv they can get over the airwaves for free.” Time has proven that view false. You get more content, different content and/or exclusive content (HBO, etc.)
    Many people pay for XM/Sirius satellite radio subscriptions in their car or on home receivers. Not too long ago people said the same thing: no one will, or should, pay for radio content.
    The mistake the big papers made was in not charging for their content in the first place, with the exception of the Wall St. Journal. The Journal is making money on online subscriptions.

  2. Actually, I don’t have cable or satellite radio. Can’t bring myself to pay for something that I won’t use that often. The Wall Street Journal is an interesting and unique case. Because its content is so specialized and packaged so uniquely, they have a good platform to charge for their online material, more so than the average daily newspaper does. Also, their target audience is largely made up of well-to-do folks who have the extra money laying around to spend. In most cases to this point, attempts to charge for content have led to massive declines in site visitors, loss of any realistic opportunity to produce significant advertising revenue and a general loss of market exposure for the publications who have tried it. I’m all for paying for content if it is actually specialized or unique, but most of what newspapers have tried at this point is just recycling what they already have in the paper. There are far too many free sites out there for that to draw any kind of significant revenue, and all it really does is lock the newspaper away from most web traffic. Self-defeating, in other words. The problem as I see it is not that publishers didn’t charge for their online material from the get-go, it’s that they tried to use the internet as a means of squeezing even more revenue out of already used material with little or no effort. Without a change in that approach, any attempt at paywalls will be met with shrugs and web traffic will just move on to the next site that isn’t charging.

  3. getting out of Dodge

    You want to know why media is dying around here, just look at the SPCA mess. I read on the SPCA site that the state police had cleared them. Then over on the Delegates site I read about all the problems with that Caroline County States attorney report. All kinds of problems and the state ethics lawyer even said so. So to sort it out I turn to my newspaper for some reporting, hoping that they would dig into it for people. Nope no luck there. They don’t seem to know about the stuff either of the other sites do. Guess I’ll have to depend on the SPCA and the delegate to tell me the parts they want to. Maybe the Whig could just post the full letter and I can figure it out myself.

  4. Getting Out of Dodge

    Actually I see your point and it relates to the post I just did on the Young Republican Club’s Tax Forum. Our newspapers just aren’t digging into the complexity of these local subjects, where a report by an independent journalist is what is needed. I recall the Whig didn’t mention much of what either of the other sites said so you have to wonder what the actual report said and which one has it right. That’s exaclty the sort of service the newspaper could provide — dig into it, examine the actual report, ask hard questions and then write a story as an independent third-party. It would be helpful. What I’m finding these days is that I’d just like for the authorities to post the original document or press release and I’ll be able to see for myself. When the subject of the constant yield rate (the term means exactly what it says. The yield will be constant) was confusing everyone and everyone was spinning it their own way, I went to the county web site and there was a very logical press release explaning that it was a 5% increase. Getting out of Dodge you’re probalby right, just post the original letter from the Caroline County State’s Attorney so we can all read it and know what it says. That’ll be the best way to get the information without filters from others these days, I guess.

  5. By-the-way, Lousie & Dan have you noticed what’s happening to the Satellite Radio channels. First they merged since the market couldn’t support two of them (Sirrius & XM). Now they’re really struggling (of course I realize the economy is causing some of that). What they say and what they told the FCC when that federal agency was worried about a monopoly is that they’re under intense competition. It’s coming from free Internet streaming sites, Hi-Def Radio Channels, and the music channels on your cable system, as well as IPODS and who knows what else digital!

    The Internet streams are generally free and we’re going to discontinue our paid subscription radio services since we now have plenty available for free from other sources. We didn’t have that when the radio service first started since we were limitied to largely poor or margianl quality broadcast radio. I rarely listen to broadcast or Sat radio anymore. I just stream some of the nation’s best stations to my computer from places like WERU in Blue Hill, Maine and WKSU in Kent State Ohio, CSPAN Radio, and some of the better NPR affiliates. With all those selections, why pay for it.

    Finally now I’ve streaming it to my cell phone and I find when I get in the car I just listen to some radio station at a distance with qualitiy content.

    It really is about the content, whether it’s print or some other media. If you have a product and it is valued, all of the rest of the stuff won’t matter. Now I realize that economics and things will play a role, but you can’t have a product that no one wants as in a newspaper with not much news.

    Someone will figure this out someday, especially with all those highly paid publishers and executive staffs mulling over the solutions. They’d be better off without a few more executive and using that cash flow to put an extra three or so reporters in the newsroom.

    You have to have value in your product and in the case of the newspaper, it is reading material. When they forgot they, they started a down hill slide long before the Internet and the economy started the free-fall.

  6. Mike,

    Some cable companies like Comcast that operate ISPs are also fighting against internet content as well with things like metered pricing. Basically, the more bandwidth you use, the more they charge you. They claim its just a pricing strategy to help pay for infrastructure but that argument doesn’t hold water as the amount of bandwidth someone uses doesn’t siginificantly affect their expense for providing it. Most likely, its an attempt to protect their cable business. More and more television stations are making their programs available for streaming or download online and, obviously, watching a tv show or movie uses up a ton of bandwidth compared with simple internet surfing or checking your email. It’s the same premise, if the satations make the shows available for free online, why would people pay for cable and dozens of stations they’ll never watch when they get what they want, when they want it.

    This is why government oversight is important. Basically, monopolies like this shouldn’t be allowed. Companies like Comcast have an obvious conflict of interest in operating cable and ISP services, and this kind of activity hurts us all. It’s why the recent publishing collusion should be stomped out before it gets going. I even read the other day that the industry is going to start lobbying congress for an anti-trust exemption, something that definitely should not be allowed.

    I’d like to see the Obama administration get more into serious corporate reform, namely forcing the larger multi-national corporations to split up preventing monopolistic activities. It’s especially important with the internet and communications technology that content providers not be allowed to control internet access as well. But I’m afraid that the bad economy, and dire predictions of doom from the industry if they aren’t allowed to collude, will force their hand to all of our detriment.

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