What’s wrong with news companies? Do they have a strategy for surviving past the age of print? Why aren’t they executing it? Why do they only cut expenses? Why don’t the billionaires build the digital news business model?
The questions have been asked for so long that they grow tiresome.
After Ken Doctor’s recent piece on whether newspaper companies are even trying to build a sustainable digital business model, I had a Facebook discussion with a friend who has a digitally based job with a television station. He said, in part:
“Big Media print organization wont last much longer. If warren buffet cant figure out a business model for you – who will? My guess is they will milk as much as they can until it isnt profitable any more and then the papers will have to buy the rights back to their names. My advice would be just to start a blog, hire some stringers per piece and get a good, small digital sales team together.”
And that’s what so many people say, in a nutshell. Chuck the paper now, the legacy costs as well as the legacy revenue, and just go whole hog into digital.
That might seem like a slam dunk to those in the digital business, but it makes a giant assumption: that the people running news companies are primarily interested in journalism.
I have argued increasingly what is implied in Doctor’s new article for Nieman Lab, that those running the news business by and large are not in it to serve the community, which is why there is not great concern with making sure there is a future news model that works.
The idea of retooling and refocusing, of giving up some — or, to be more accurate, most of — your current revenue to build a currently less profitable kind of business that has more legs, so that local journalism survives matters only if what is of top importance to you is local journalism. If you don’t care about journalism, if you are first and foremost a business person, your decisions are based on current revenue. Why would you cut your profit on purpose to pursue a theory that may, possibly, bring you more money in 20 years than your current path is likely to bring? That’s 20 years away — and it’s a theory.
Take my friend’s example, Warren Buffett. People keep pointing to him and saying he hasn’t “figured out” a business model. But look back at his statements. He never said he would reinvent the industry. What he has said is that if someone else finds something that actually works, he would evaluate it, but in the meantime he thinks small, locally focused papers can be profitable for some time.
And that’s what made Buffett a billionaire — looking for places where there is money to be made with minimal investment. He isn’t a venture capitalist.
We keep waiting for someone with deep pockets to rescue journalism. Charles Foster Kane existed only in the movies, but even there he was losing $1 million a year.
News people will not stop feeling screwed around by the people on the business side until there are no more business people left, and they will have left because there was no more money to be made.
When journalists move on from newspapers, it feels different. It’s personal. It’s more than a career shift and a mindset change.
When business people leave newspapers, they don’t change careers, they just move on to the next job. It isn’t personal. It’s ledgers, assets, liabilities and margins — money in, money out.
That’s why it feels like such a betrayal to journalists, and why journalists never seem to understand why everyone seems only to want to break their hearts.