The other day, I wrote about the potential challenges of local non-profit journalism like that planned by Crosscut.com, my recent former employer, in which I also am invested. Today I'd like to suggest that we shouldn't give up on commercially supported journalism. Clearly, it's not going to work for Crosscut right now, but that doesn't mean it can't work for existing news outlets, even those struggling.
This week comes news that Tribune has filed for bankruptcy. This is the newspaper (Los Angeles Times, Chicago Tribune) and broadcasting company taken private just last year by Sam Zell for $8.2 billion, a price that some then speculated would be too great a burden given the borrowing involved. Sure enough.
It's just one, albeit large, newspaper company among many enduring the worst of times.
Reflections of a Newsosaur blogger Alan Mutter has an excellent two-part overview of the national situation, examining the sad state of advertising revenue, which is compounded by the recession, and how newspaper companies likely will respond, with cuts in newsgathering, print-edition size, and the initiation of joint operations. If you want to get up to speed with 15 minutes of reading, those links are for you. Writes Mutter:
The list of potential expense reductions includes squeezing staffing, shuttering bureaus, carving out layers of middle management, telescoping multiple sections of the paper into one, tightening newshole, scrapping syndicated features and wire services, axing op-ed pages and book sections and eliminating classified ads on certain days of the week.
And if all that and other measures fail, Mutter writes, "a newspaper that cannot sell enough advertising or cut enough expenses to sustain profitable operations is not likely to make it to the other side of 2009." That's due in large part to the fact newspaper companies big and small, like Tribune and including the Seattle Times Co., have borrowed heavily, and lenders won't be forgiving.
OK, so news operations rooted in daily print don't appear to be profitable any longer. But does it follow that for-profit journalism, armored with the independence that comes through revenue from a multitude of advertisers, can't continue? I'm pretty sure it can. Philanthropically funded news is not the only path forward.
The overhead of a newspaper's newsgathering (if it can or should be called overhead) is a mere fraction of the cost of publishing a printed newspaper. Near as I've been able to gather from multiple sources, online advertising revenue is not far from matching newsroom costs at The Seattle Times. (The privately held company doesn't disclose finances.) And those newsroom costs could be reduced quite a bit if the peculiarities of producing a print edition were eliminated and the staff stopped writing about and editing national and world news, among other topics better covered elsewhere on the Web.
I've written previously about steps newspapers can take to survive this inevitable shakeout. This week, The Seattle Times made some big changes. It's a start. But if that brand is to survive, and I hope it will, something more radical has to happen.
The Seattle-area Blethen family that controls the Seattle Times Co. needs to break it up. Keep the intellectual assets — the brand, the archive, the human newsroom, and the Web site and its traffic. Create a second corporation that focuses only on printing, distribution, and print ad sales — only those assets necessary to meet the obligations to the joint operating agreement between the Seattle Times Co. and Hearst, the owner of the Seattle Post-Intelligencer. The new Seattle Times Co., self-sufficient with an all-electronic revenue stream, then sells content to the old Seattle Times Co. for use in the print edition. If Hearst wants to continue printing the Post-Intelligencer, fine, the JOA will sort itself out without endangering the Times. Otherwise, they can agree to dissolve the JOA and duke it out online. Newspaper Preservation Act, indeed.
Meanwhile, non-broadcast news outlets including the Times have long under-invested in technology. Time to correct that. Scrap the tangle of software platforms used to publish on the Web. Hire top programmers who understand the importance of institutional journalism (I personally know three off the top of my head and I'm sure there are many more out there) but who also live and breathe today's social networks, and turn them loose to develop a new platform for publishers big and small, with new tools for dissemination and sharing — technology that will ensure the future of good journalism and give rise to more voices and conversation.
The Times and P-I are both among the top newspapers nationwide in terms of page views. Tens of millions of eyeballs browse their sites every month. That's some serious ad revenue — maybe not Google-caliber, but serious just the same. And surely it could cover the costs of a leaner, refocused news operation.
There might be fine print somewhere in the joint operating agreement that prevents this from happening. But one way or another, the Seattle-area Blethen family needs to stop buying ink and newsprint, ASAP, and get on with publishing a vital, indispensable, 21st century news product. If they don't, somebody else will — eventually. But when?
I think the brands of established, reliable journalism can survive, but they must shed ink and paper now.