state of the media

the dreaded usa today effect

Some required reading before you go any further: Why Nashville Needs Newspapers -- the Nashville City Paper's farewell editorial, and JR Lind on the dim future of newspapers.

In the latter, JR says:

Amazon founder Jeff Bezos paid $250 million for The Washington Post. Warren Buffet’s Berkshire Hathaway is adding newsprint alongside Dairy Queen and Orange Julius in its prodigious portfolio.

Boston Red Sox owner John Henry bought The Boston Globe.

Nashville doesn’t need to rid itself of newspapers. Nashville newspapers need fabulously wealthy benevolent benefactors.

Nashville needs a John Henry.


Eventually Gannett will bail on The Tennessean, and someone will have to step in if Nashville is to have a daily newspaper. Without a savior, 1100 Broadway will become a very valuable piece of empty real estate, the subject of interminable, high-minded and saccharine “imagining sessions.” Somewhere out there, some 20-something downtown resident is shoehorning an IKEA where the newsroom used to be.

I agree 100% with the premise (that Gannett will bail on the Tennessean) but I am less sure (or optimistic, at least) of his solution.

Gannett's current business model with respect to its local/regional papers is doomed. I won't go into a lengthy history of the evolution of media business/revenue models here (but Eric Alterman's Sound & Fury: The Making of the Punditocracy is a pretty good intro). But there was a time, of course, when local papers were just that: local. They served to disseminate a hearty mix of news and opinion -- often leaning heavily towards the latter. The revenue model was simple: they printed papers, and they sold them. If they didn't break even, they hoped for (and often got) a wealthy benefactor. Advertising changed things with the realization that advertisers would gladly pay to have their ads featured. Not long after, crafty newspaper businessmen began to realize that their ad sales were more or less directly tied to the broad appeal of their content. It no longer paid to provide a platform for just any soapbox rant or political screed -- these heavily biased pieces appealed only to small niches. What earned the most ad revenue was to stick as close to the center of any political/social divide as possible. Thus the ominous specter of objective journalism was born. Far from being the bedrock foundation of golden-age journalism we think of it as, objective journalism was invented to sell ads.

Corporate consolidation on a national level was the next inevitable step. As communication/technology advanced, people increasingly relied on "local" papers to relay national/international news. It doesn't take a rocket scientist to figure out that there's an inefficiency in a nation of local paper staffs all producing essentially the same content. Enter companies like Gannett: buying up local papers, laying off portions of the staff, and replacing their content with centrally-produced copy.

This brings us more or less to where we find papers like the Tennessean today: it's still nominally a "local" paper, but it serves very little of the needs that a "local" paper once served. That was okay, because even if it didn't adeptly cover the needs of a local market, it still served as a conduit for national/international news. The Internet changed all that. The news I once had to buy a paper to read, I can now pull up on my phone.

So, what now? Sorry, did you think I had a solution? Ha. Well, JR thinks we need a hero. I agree that it would be nice, but I am less optimistic, at least with respect to the prospect of saving the institution of the Tennessean, should Gannett abandon it. Wealthy benefactors are hard to come by, in my experience. And should one come along that wants to attempt to hero this particular situation, there are a few hard truths I think they would be faced with:

  1. Physical printed papers are a waste of time. They may still be key for penetrating demographics (*cough*oldpeople*cough*) that still like dead tree editions, but they are useless for building something new to fill the void we're facing, and the overhead will forever be an albatross.
  2. No one wants to pay for news they can get elsewhere for free.
  3. Ad-driven content turns off readers, because a) it favors centrism, and b) ... ads are annoying.
  4. People like to share content.

Note that no-where in that list did I say what you might have been expecting: "People don't want to pay for news anymore". I don't think that's necessarily true. It was a given for decades (centuries?) that you dropped a coin into the box to get a newspaper. People are willing to pay for information. The only thing that's changed these days is that people don't want to pay for information they can get elsewhere. Why would someone buy the Tennessean to read the same shitty re-hashed national stories they see on Yahoo News? People pay for value.

There are some really tricky things to reconcile in the above list of constraints. Maybe people will pay for valuable content, but how do you compel them to pay for it other than restricting access via a pay-wall? This conflicts with #4 -- if I can't easily share/discuss a recent interesting article with my peers who may not subscribe, what's the point of reading it at all? The Nashville Post (another Southcomm publication) has subsisted thus far with a pay-wall model, so it seems to at least work for certain niches, but business news caters to a demographic that has deeper pockets. Conversely, it may work because the Nashville Post is one of few local publications genuinely producing 100% unique, valuable content. If you want to read what they're writing about, you have nowhere else to go. There's a glimmer of hope here that a subscription-based model might not be as much a non-starter as we think.

I don't have a concrete answer, but I have a vague picture of a business model that I think could work. I'm a simple guy. I believe in the power of the marketplace. If there's something of value I can't get elsewhere for free, I pay for it. I think other people would too. I have a vision of a small news outfit: digital production, subscription based. It would necessarily have to start small in order to grow organically and shift with the desires and whims of its customers. The subscriptions they buy need not necessarily pay for access to the content. The content itself could be free, and maybe the subscription buys you other perks: SMS alerts, customized/tailored frontpage tailored to your category preferences/etc. There's still a lot of potential for the industry to evolve, here. But I don't see the Tennessean -- even freed from the fetters of Gannett -- as being the source of the necessary innovation. There's simply too much overhead, unless they radically re-shape the company to be more in line with the above constraints.

The City Paper failed because its free, ad-supported revenue model just didn't work -- even with valuable locally-generated content. The Tennessean is failing even in spite of the fact that they still manage to get people to actually buy their physical papers. While I lament the failure of the City Paper's admirable attempt to reinvigorate a traditional newspaper business model, the lesson should be clear: it's time for something different.

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  • Paul Nicholson

    Agree 100%. The City Paper had the coverage right, but a crappy business model in this era. The Nashville Post has solid content and is a little closer to the right business model. When hearing that The City Paper closed I was left scratching my head, wondering why they didn’t go to the Nashville Post model. The City Paper wasn’t a paper for old people. Kill the paper edition. I would gladly pay $5/month for the City Paper delivered to me in digital format – let me log on a view from a web browser and deliver it to my tablet via the Google Play Books (and make it available via iTunes if you must). The cost of the Nashville Post is too high given that I don’t need their specific kind of coverage information that badly, but I’d happily support that business model in a publication I saw value in like The City Paper and I really doubt that I’m alone.

    Maybe it wouldn’t have worked, but I’m really surprised they didn’t at least give it a try.

    • cwage

      I imagine that switching from a free ad-supported model to subscription is one of those things that sounds easy to say but is in reality much harder to actually just do at the drop of a hat, but I can’t say for sure..

  • Lindsey Turner

    Newspapers are stuck in the printed-ad rut. There is still no* app or website — subscription-based or ad-supported — that can generate the kind of revenue needed to pay a living wage for enough reporters to generate the kind of content needed to make a news outlet worth reading/paying for. Because web ads and app or online subscriptions alone still can’t make the kind of money dead-tree ads can.

    That is the only reason newspapers still print. So while the printing overhead is considerable, the printed paper is still where the money is because of those full-page ads and obnoxious sticky notes they slap on the flags. When the economy tanked and national advertisers scaled back their ad buys in newspapers, all hell broke loose and the fragility of the system — and ludicrousness of the profit margins of the past — came into focus.

    A few years ago I was optimistic because I thought web advertising would gain value over time and begin to be able to provide the kind of revenue needed for dead-tree editions to transition to digital-only. But it hasn’t happened yet. I’m not confident it will to the degree it needs to. And I don’t know how you make the leap from dead tree to pixel, but I think we are feeling those labor pains in a loooong, drawn-out labor that’s being managed by a corporate doctor with a not-great bedside manner.


    * I’m actually not sure this is true right now. It was kiiinda true not too long ago but I’ve been so busy putting out newspapers that I haven’t had time to keep up with the news.

    • Colin McCormack

      Is it not also the case that, unlike printed ads, one can obtain a metric of internet advertising’s effectiveness (click conversion rate,) and this has cast doubt on the premise that any ads generate revenue?

      If that is so, if advertising has been selling a service which does not provide value commensurate with its cost (and I suspect that it is the case) then advertising isn’t profitable and can never be profitable, regardless of medium.

      If ads don’t work at the price assumed by newspapers, and the internet proved it, then more internet won’t ever garner more advertising revenue.