Now that it all appears to have blown over, I want to say a few more words about the AIG bonuses, and the media role in stirring the pot of fury. We had a long discussion about this in my core business journalism seminar last night.
Such poor editorial judgment is pernicious. The bonus rage not only derailed politicians from doing the important work of sorting out a real bank plan and a budget; it squandered the political will to have a real bank plan. Now that everyone in the country is out with their pitchforks for the bankers, how is the administration going to sell spending more money on this industry?
If the press had been doing its job, the last two weeks might have produced stories explaining that Wall Street funds Main Street, that even venal AIG insurers are worth your tax dollar right now. Or we might have read on page A1 about the strange phenomenon of Americans ranting against the pursuit of profit and how absurd that is. Such circumspect and constructive items appeared, but only on the inside pages of our newspapers, and in elite pockets of the wonkosphere.
I have a hunch as to why it wound up this way: it’s generational. (Note: Dan Drezner is talking the generations meme today too) The bulk of voters are over 50, close enough to retirement that even a superhero’s bank plan won’t bring back their 401K’s. The bulk of editors are the same age. Most of the time, such people are capable of putting enormous national emergencies above their own interests when the national emergency is framed as securing the future for their children.
This weekend, my mother, generally the type to lie down before moving buses for my sister and myself, said leaving her children to careers in a depressed, deflated, Japan’s-Lost-Decade economy might be worth it to get a pound of flesh from those who destroyed her retirement. I post this not as an indictment of her per se but as an example of the level the rage has reached and an explanation for why young people I know, even soak-the-rich liberals, are far less incensed by the whole bonus question than their parents. Unfortunately, elected officials won’t take any real steps on the banks until such policy polls well among our parents’ generation.
Not a week goes by these days without some casualty of the journalism apocalypse. Unlike so-called media pundits who simply make money celebrating the demise of media, I am generally saddened to see good papers die. Not because I have any attachment to dead trees, but because I believe the future of news media–digital and collaborative as it will no doubt be–has to involve the expertise of the people in those newsrooms.
Startups should lead old-timers in the right direction (more opinion, more interactivity, more transparency) but not disparage them. A scalable replacement for the social function of print will come from an organization with some scale that merges with some smaller newbies or a newbie that acquires scale by harnessing the expertise and resources released by the old organizations. The assets and talent underneath the managerial fat at many of these papers cannot be allowed to go gently into the night, and laughing at newspaper folk does not exactly build a base for future collaboration.
Some new media evangelists are better than others at being modest. Clay Shirky’s poignant, stunningly written indictment of poor managers and how they got us to this point gets my approval because he stops short of the self-congratulation that seems to accompany others’ writings on this topic. He admits he doesn’t have a better solution, yet.
Some print outfits are better than others at making the transition. The FT’s decision to launch its own content aggregator for businesspeople is a good experiment, though it’s not entirely original–BusinessWeek did the same months ago. The policy journals–the Atlantic, Foreign Policy–are doing a great job turning their websites into a collection of blogs to which the print ‘zine can be a collector’s bonus. A handful of daily papers–the Boston Globe, the SF Chronicle, the Portland Oregonian–are building websites that can become standalone hyperlocal offerings, if only they could take the leap and make these sites the primary offering. Unfortunately, the papers that are actually forced by their finances to make the leap to killing their print product don’t have such developed web products to fall back on, and they often just close up shop.
That makes the demise of the Seattle Post-Intelligencer, and its replacement by the all-online SeattlePI.com, especially notable. Seattle’s Congressman, Jim McDermott, was here on Cappuccino some weeks back brainstorming funding models to keep papers like his afloat in print, because, at the time, he seemed quite convinced that the Internet just couldn’t fill the same role. Now, he’s a blogger who says the changing times have all the progressive potential of the 1960s. Whoa. Commenters are beating up on him for taking a job writing for the PI site, since the old paper was fairly sympathetic to him and it seems like backscratching but I’ll come to his defense: give credit to a Boomer who can get his head around change this quickly. And give credit the new SeattlePI.com for being exactly the kind of expert-audience collaboration we want to see online.
Of course, making a website like this pay for itself is still a challenge. The Pew Project’s most recent “State of the News Media” report says we’re spending too much time on models that won’t work (micropayments) and not enough exploring options that might. The Pew folks suggest:Â giving news organizations a cut of the fees we pay ISPs, like we do with TV broadcasters;Â turn mass news websites into portals for commercial activity (example: an Amazon widget on the Book Review page that lets you buy the book right there);Â the Newsweek model I’ve discussed before, of subscriber offerings for elite niche audiences. Â All three suggestions have potential, though I wonder if the first isn’t just a proxy for state supported media, since we’re eventually headed towards free public broadband access in most markets.
Also, the Pew crowd say there was more news content produced about politics with increasing frequency in 2008 than in previous elections but that it was more reactive, passive and less investigatory than in year’s past. That’s quite a rebuttal to those who see citizen-media as somehow replacing the Fourth Estate. Some of these citizen/professional partnerships, however, might just do it; here’s to hoping the recession brings on some more of those.
I know you’re all fed up with my approving quotes of right-wing critics but this one is too spot-on. David Frum said the above in a conversation with Daniel Drezner on Monday and I was listening to the dialogue while trying to formulate my thoughts on AIG’s bonuses, Cramer vs. Stewart and the administration’s financial plan; his quip tied it all together. Joe Scarborough (another rightwinger whom I generally deplore) pointed out the other day that the anger over each of these issues is grounded in a knee-jerk populism.
I am a populist. Not in the sense the word is often (mis)used, as a synonym for political pandering, but in its actual sense of being concerned with the needs of the masses. And I believe the only way to fulfill those needs is to increase growth for all. I’m not a supply-sider: I think government should use Keynesian spending models to spur that growth, and I think we need to heavily tax-adjust growth on the way up to make sure it’s broadly shared. But there’s just no way to have economic growth without benefitting some people at the top. Get over it.
Nobody will get out of their present economic rutt unless we bail out the banks and as the TARP legislation was written, the Treasury doesn’t have strong powers over how banks spend that money. For the record, I think that’s too bad, and that we probably should have included some clause on compensation when we passed this bill in the fall. But we didn’t. Those who are really riled up about this are whining over bonuses as a focal point for their general angst over bailing out banks.
Here’s the problem: neither Obama nor Geithner, nor Bush nor Paulson before them, has been able to explain how the financial system works or why it matters. Obama’s town hall today is a good example; he was spot on for the first 45 minutes or so, speaking about schools and health care (even I was sold), but when he tried to address the banks, he stopped making sense, even to the biz journos I was watching with, who spend all their time on this stuff. The people on the audience all had glazed expressions–it was clear he wasn’t communicating; it even seemed to me he didn’t understand the math himself–he kept confusing securities with derivatives. Before you crow that such matters are too complicated for the attention spans of ordinary political audiences, listen to the speech FDR gave before bailing out the banks of his day. The only contemporary policymaker who I think has spoken with such clarity is Ben Bernanke, both in his October speech and his 60 Minutes interview this past Sunday. Unfortunately, explaining policy is NOT Bernanke’s job; it’s the job of elected officials and the press. The only person in media I’ll credit with getting this one right is my friend Vikas Bajaj at the NYT.
It’s because elected officials and the mainstream media are doing such a lousy job that Americans are turning to info-tainment outlets like Jim Cramer for investment advice and Jon Stewart for political analysis. Jim Cramer has been wrong-wrong-wrong on many stock calls, but it was never the proposition of his show to be right all the time; it always depicted itself as bullish market propoganda for enthusiasts. By the same token, business journalists defending Cramer should watch their words: the only reason Jon Stewart had to take him on is because professional reporters beyond the elite/expert outlets, like the government, did not do a proper job explaining the financial markets to Cramer’s middle America audience.
The result is that firms like AIG have us in their palms. I’m reminded of the moment in Richard III, when Richard, self-described as “deformed, unfin ish’d” woos Anne, a woman whose first husband he actually killed. First, he tells her he wants her, so bad that’s why he killed her hubby and no one else will love her as he does. She’s flattered, but she hates his guts. So he hands her a spear and dares her to kill him in revenge; the moment she fails to do so, she admits she’s his. We have already failed to kill these banks, but it means all our whining about bonuses is wasted breath and they know it. Like Richard, they take the opportunity to adorn themselves with fineries and enjoy the license we have given.
The reality is that we do need the banks, but that we’ll have to regualte them more aggressively as we give them more aid. I for one would much rather our elected officials devoted their attentions to devising a plan for such aid, and explaining it, in real detail, than to righteous indignation. I am hoping that my peers in the media and I will then focus on dissecting and analyzing such a plan, rather than taking pot shots at one another. Until that happens, I suppose I’ll just curl up with Lawrence Olivier.
If there’s one thing that really raises my blood pressure, it’s people misusing the word “innovation” to describe any and all kinds of newfangled change. In the business journo world, that usually applies to PR representatives who call to tell me that their client’s new product/venture is innovative just by virtue of being new. There’s a subcategory of these people who think anything that uses the Internet is innovative by definition. But innovation is more than just a new way of conceptualizing; it’s that new concept applied, successfully, in the real world. A new idea that is unworkable, or turns into a bad idea on contact with reality, is not innovation.
BusinessWeek’s Innovation expert Bruce Nussbaum is normally pretty sound on this point. He called President Obama out early in the transition for conflating technology investments with “innovation.” But then he misapplied the innovation label to praise Secretary Hank Paulson when Paulson began flip-flopping between his initial plan to create a “bad bank” for bad assets and the British strategy to take big stakes in existing banks to help them deal with bad assets. Yes, Bruce is right to argue that innovators must have the freedom to change their minds and optimize their ideas as they learn more information; that is Design Strategy 101. But that’s not what was happening at Treasury: what had Paulson changing his mind was not new economic data, but the changing office politics of his department. Calling pillar-to-post behavior innovative cheapens the term.
No surprise then that Nussbaum now feels innovation is a dead concept, killed by its misapplication and “overuse.” His proposal for a new concept? “Transformation.” I like it because I think it carries the practical side of new ideas on its sleeve. Innovate is an intransitive verb, but transform is a transitive verb. You innovate, period but you transform something, which means the USE of the new idea is baked into the concept.
Meme cleanup may be the new meme these days: TechCrunch says it’s time to stop calling everything digital “Web 2.0.” I’m guilty of misuing that label; consider this post my promise to stop.
My reaction to Jim McDermott:
NPR and PBS are great because they provide access to consumers who cant pay for fancy digital cable to get their MSNBC but the reason it works is that in terms of keeping content independent, and the wages they pay to keep top talent, NPR and PBS still have to compete with MSNBC and CNN et al. If ALL media were publicly financed, ie if you had a state controlled news media, that would be not so great: You’d get into sticky situations like the one that ensnared the BBC over Gaza. [To his credit, Rep. McDermott acknowledged this danger when we spoke.]
The other “nonprofit” model that I’ve heard bandied about is the one used at educational institutions, ie funding journalism by contributions to an endowment. News flash, folks: endowments are a big part of how universities stay alive, yes, but they also CHARGE FOR the end product.
The question is, are you as a consumer more likely to be persuaded that yes, you ARE actually okay clicking through an ad or more likely to be persuaded that yes, you ARE actually okay paying to read the site. IÂ think in the end consumers will have to give ground on one of the two, unless we decide that journalism is a non-profession and shouldn’t be self-sustaining financially at all, but instead a pet project people do on the side for free while paying their bills with something else. Even if I weren’t a journo myself, I’d be unenthused by this option–I WANT to read/watch/listen to coverage of an issue from someone who spends 16 out of every 24 hours on that issue, not someone who has a day job doing something else entirely.
I posted earlier this week that one of the few upsides of this economy is the cover it provides for newsrooms to make a bunch of necessary changes that everyone has known about, and postponed, for the last decade or so. Why does a media holding company need to pay for a White House correspondent or a film reviewer for each of its papers or magazines, instead of just funding one such reporter whose content can appear in all their outlets? Why does a small town paper need to bother with national or global news at all, since readers the world over can now get access to international and national information online, and even without the web, since the local paper can get that content from the wires? In the digital economy, it makes even more sense for news outlets to focus niches of expertise and aggregate the rest from other sites. But it means a permanent downsizing of newsrooms and that’s hard to do when the rest of the economy is growing. Still, even now that editors and publishers are ready to make these cuts, no one has figured out quite how the smaller newsroom will make money. Which brings us to the second upside of a recession for media–the willingness to take risks that comes when there’s really nothing left to lose. There’ve been a few recent stories highlighting directions the media could take:
–Walter Isaacson says we could charge iTunes-style for individual digital articles, but Mike Kinsley says no one would pay for that (Note that he doesn’t have an alternative, really)
–the NYT says it might try charging for select and archived content again
–Fox has a new ad model that charges buyers more per ad, but reduces the number of ads sold in total so viewers will have less incentive to forward through the shorter commercial breaks
None of these is perfect, but I applaud anyone who is willing to head scratch a bit about devising a solution. That’s why I was so thrilled to speak a few days ago with Seattle Congressman Jim McDermott. His hometown paper is on its last legs too, and Rep. McDermott has been inspired to try to save the American newspaper industry. His solution is the out-of-the-box idea no one IN media  really likes–that news just shouldn’t be a private sector enterprise to begin with, but a nonprofit venture funded either by the state or by charitable donations, or some combination of the two. McDermott is researching a bill for the House that would set up funds, akin to those that back NPR and PBS, to support nonprofit newspapers in American communities. Here’s what he had to say:
on newspapers as a public good: “I worry that we’re losing our democracy. I don’t know whether this is just generational, but if we lose newspapers [and] everyone is gonna get the news off the internet, then a whole slug of people is just off the game. If Jefferson was right and an educated electorate[is key], then you can’t have vast numbers of people without access. [Even if we expand access to broadband], you have to be more devoted to go in search of news on the web.”
on the downsides to digitization: “It used to be that Congress had roll call voting, and it took hours, and then they made it an electronic scoreboard, and now we can pass amendment in 15 minutes. Therefore we’re no longer inconveniencing people with new amendments, [which led to an] expansion of the number of those amendements that people insert. Now [there’s a] movement to vote from their offices. This isn’t a Congress, because Congress is a coming together. You can’t influence the opinion of others if you’re not in the same room. If I thought that investigative journalism was being preserved and just print costs were being cut, that would be fine. But the decision [about what to run online] is being made by accountants not professional editors.”
How much does news reporting really influence politics day-to-day?: “Without investigative reporting, I’m gonna get away with stuff. Gotta have somebody poking me in the eye with a sharp stick to find out what’s going on. Moreover, how are we gonna communicate with constituents? [The way things are going,] It’s all gonna be done by the president in uplifting (or not so uplifting) speeches? I just want to alert people to the change taking place—are we sure this is where we wanna be going?”
Is it the message or the medium?: “I get more engagement from constituents in web community meetings than I do in live ones, but I come from the city where every software maker has an office, the city which has highest reading and movie-going numbers per capita. I guess the way everybody twenty years younger than me is zipping things around on email, [it might be okay] if there was investigative journalism available on the web. “I myself read papers from Lebanon and India online, and I do my own winnowing process, and I have people that do it for me. Managing information has become such a process and many people have just given up or can’t afford to do it.â€
I have a few bones to pick with Rep. McDermott’s argument, but I’ll save them for tomorrow. I’d like to hear your takes first: is the notion of the news media as a private sector, for-profit enterprise fundamentally flawed or eternally doomed? are there downsides to state-subsidized media? could the NPR model ever translate to print? is it more logical to bankroll transitions to digitization or prop up the older technologies? If there’s any way to test the value of new media, it’s by sounding out some of these tough questions right here.
There’s been no shortage of hand-wringing and prognosticating about the fate of the news media in recent months, and I have certainly contributed by fair share of commentaries. But this last week I’ve seen more stories than usual.
I have maintained for some time that, conventional wisdom about the internet notwithstanding, the future actually bodes well for the big news brands, if they can buy up or successfully build niche-oriented digital subsidiaries. There have been many signs of that model emerging since I started this blog, but this week, almost all the media stories follow that trend:
1. Newsweek is finally giving up the hoax of pretending to break news, and adapting to its rightful role as an upmarket journal of center-left opinion. This fits well within the broader strategy of Newsweek’s parent company, the Washington Post Group, which can gradually turn Newsweek into the Sunday companion to the WaPo, which will become the daily pennant to/aggregator of content from the niche websites: Slate, The Big Money, The Root. Look through the bylines at these publications and you will already see signs of such staff consolidation.
2. The New York Times is doing better than Michael Hirschorn accuses them of, in part, because it is investing in such a model. Look at what is happening in the convergence with the Herald Tribune, now the Times’ international arm. Streamlining this way allows the Times to maintain its competitive advantage in the niche international political coverage while cutting costs to match the smaller revenue stream of web adverts.
3. Editor and Publisher, a trade mag that tracks these sorts of things, lays out precisely this model of the niche-specialized, cross-platform journalist (and thus implicitly of media companies set up to give specialists access to multiple platforms for their expertise). It’s certainly the most pragmatic, measured answer to the hand-wringing I have seen so far. E&P; differs from me in assuming that all the platforms are digital ones–I think print will survive as a sort of collectible that accompanies a core online model, but it’s a small point in comparison to the core issue of what kind of stories are produced and by whom.
Here’s what stands out about these stories. Amidst the very real fact of newspaper failures, these are stories about making new investments in forward-looking strategies. That makes them stories of risk-taking in the current economy but also hopeful. And that’s what recessions are good for–sometimes, a little creative destruction flushes the system and makes room, or provides cover, for companies to make positive changes. In media, for my own sake, I hope that’s right.
Obama’s leadership style was a topic of discussion at a panel I attended last night about the economic challenges we face. Common criticisms were
–Obama does not yet recognize that the rest of his domestic agenda is never going to happen because all political (and real) capital for his first term will get spent on the stim
–Obama trumps the previous crowd in the quality of the experts he’s got BUT he has a problem actually making decisions that use their expertise effectively because the experts are all competing prima donnas. We should thus expect a lot of waffling on his economic policy.
You’d think the above was a fairly simple statement, but apparently Jeff Jarvis, big shot of media commentators, does not understand it. He’s written a book called “What Would Google Do?” in which he takes Google’s business model and suggests that since they have been successful with it, everyone should run their companies–in all industries–this way. I haven’t read the book, but I know this is the argument, because Jarvis has taken his own advice and generated much of the book through suggestions from his blog readers this past year. You can watch him explain the idea here: