/ 31 May 2009

Rapidly changing landscape

When I was a child, those crackling Johannesburg summer afternoon thundershowers would have my cousin and I in the street, sailing boats made of newspaper down the flooded gutters in a spontaneous regatta of flotsam and rapids.

The tenacious little craft would bob along happily until they reached the storm drain, where they would disappear beneath the sidewalk into a dark underground world that could only be safely explored in the dry season.

Whether this early relationship with newspaper had any influence on my career choice is doubtful, yet I have always loved print.
There’s nothing quite like seeing your name stamped onto a piece of paper thousands of times, with an article you’re particularly proud of, and distributed to thousands of subscribers — some of whom might even read it.

The irony is that my early love is being killed by another, newer one — the internet. Or so they say. Clearly, venerable and ancient purveyors of truth and cartoons are dropping like flies: Colorado’s revered Rocky Mountain News and the Seattle Post-Intelligencer are the poster children for newspaper demise. (The former shut its doors, the latter moved entirely online.)

The Miami Herald is up for sale. The New York Times survived only thanks to a last-minute investment by Mexican billionaire Carlos Slim Helú.

The New York Times! Those who work across both internet and print media — like me — are asking themselves: WTF?

The pressure on print is placed squarely at the door of the internet. Readers are moving to the instantaneous, diverse and seemingly free buffet of online news sites, and not coming back. According to the old-guard consensus, the net is killing papers, stealing readers, and will ultimately lead to the demise of traditional journalism.

I believe they’re right to some degree, but cannot fairly put the blame on internet competition. All the competitive medium has done is expose the holes in the newspaper industry’s business model — holes that have long been known and recognised. Holes that have been ignored in the hopes that they will go away.

The biggest hole is that newspapers themselves are holes. Holes for money. One of my publishers once told me: ”If you want to make a small fortune in publishing, invest a large fortune.”

Newspapers have always been a terribly risky investment — and not just recently. The aforementioned Seattle Post-Intelligencer — Seattle’s oldest business, with a 146-year history — had lost money every year since 2000. Last year alone its losses hit $14-million. Before the Great Recession these losses were often tolerated. Today they aren’t.

If you get it right with a newspaper, you can amass a fortune very quickly. Lord Thompson — once the media mogul of Britain before Rupert Murdoch bought the title — described a monopoly on news as a ”licence to print money”. But when things go wrong — and this happens at alarming speed with print — the losses are staggering.

In Lord Thompson’s quote lies the second problem — any business that relies on a monopoly for success is unsustainable in the long term. ”Long term” can be a very, very long time. The British East India Company had a 200-year run on the back of a pliant Parliament, but even it couldn’t avoid competition forever.

Newspapers, however, do not generally have government protection — and the internet has essentially broken the tenuous monopoly created by large holding companies and the cost of producing news.

This plays to the internet concept that ”information wants to be free”. That notion, first developed by Stewart Brand at a hacker’s conference in 1984, is contentious. People tend to forget that he also said: ”On the one hand information wants to be expensive, because it’s so valuable.” (Wikipedia)

And herein lies the rub. All that information on the web has to come from somewhere. It has to come from dedicated journalists and reporters whose job and trade it is to hunt it out, expose it to the light of day, and disseminate it. Those journalists generally work for traditional media. Only newspapers and broadcast media, with their high profits and sometimes higher losses — big revenue in either case — can afford to produce news at the rate to which we have become accustomed.

As such, the internet is reliant on traditional media. It’s in the internet’s interest to offer some protection to the hand that feeds it. Unfortunately, the economic balance between the two is yet to be established. At the moment newspapers are being stress-tested by their own bastard offspring, and, until we hit rock bottom, we won’t be able to tell just how much one relies upon the other.

Adding to the confusion is the rocky business model that newspapers had to start with — high costs leading to sudden, massive losses and the reliance on a monopoly of what has become a commodity.

Some newspapers will sink in the raging torrent; some will float. Some will go down into that dark water drain and emerge miles away on a still meandering river.