Wednesday, January 22, 2014

Death by Blogs: Is the News Business Ready for Its Final Dismemberment?

It's a refrain that's been familiar in the media business for many years. A star gets famous enough to be no longer just one in a small army of contributors to a major brand and sets out on their own to make a name for themselves. Frank Sinatra split with Tommy Dorsey's orchestra to build a solo career. Groucho Marx became a celebrity separate from his brothers on television. The Beatles all went their separate ways. And so on. Often it's new opportunities through new distribution channels, other times it's a new generation that's ready for a new style, or just egos that get too big for team sports. Whatever the motives, it's nothing new.

However, what's new in the news business is that many of its core stars are jumping ship in greater numbers than ever before to create their own online news brands and to recreate old brands via new channels. David Pogue, formerly +The New York Times' lead tech blogger and reporter, and television's Katie Kouric moved over to Yahoo. Kara Swisher and Walt Mossberg moved from The Wall Street Journal and their All Things Digital group to found re/code, their own coverage of the tech world. And according to Columbia Journalism Review, Ezra Klein is in talks to get funding for a new kind of news organization. The list goes on, but you get the picture: talent that's not having fun in the cutback-crazy world of mainstream journalism is looking at the risks of major changes or indie careers and making the jump enthusiastically. This is a shift that I forecasted many years ago on ContentBlogger, and the finances and technology of online news have progressed to the point that it's now a pandemic trend.

What's fueling this change is not only the superstars itching to keep in the limelight but also the technologies that pick up their media. Mobile news readers such as +Flipboard+Zite Media and Google Newsstand promise easy auto-curation of news from various sources in slick apps that enable content producers to make money. So for every interesting new news Web site coming along on the Web, there's a posey of pretty and highly functional ways to consume the news with, not to mention social media channels in which to promote it. A tweet on Twitter from the NYT looks pretty much the same as a tweet from you or me, so the value of personal brands to promote news stories virally only helps to amplify this trend.

In some ways this trend is reminiscent of a much earlier phase of the news industry. In the early days of newspapers, dozens of publishing outlets flourished in major cities in places like London's Fleet Street. That fit the scale of that era's printing capabilities, first and foremost, so there was a very level playing field for news technology. Then came along telegraphs, massive printing presses and delivery advantages via trucks that favored heavy capital investment, and the news became more centralized.

Competition from new technologies such as radio and television provided further centralization in the 20th century. But now in the 21st century the Web has reduced radically the capital requirements for news startups, and so our news choices resemble the old world of Fleet Street much more than the world of news a few decades ago.

And therein lies the real core problem with the news business: lack of capital investment. Or, to be a bit more fair, capital investment in new media technologies on a massive scale by new competitors that was unmatched by news organizations more interested in refining old technologies. While major newspapers like The New York Times were pushing out huge new color printing presses for mass production, investment in Web infrastructure by companies both large and small shifted the technology advantage from the consumer's perspective away from news organizations permanently. News companies were left with little more than a brand, lots of intellectual property management and a dwindling cadre of increasingly undistinguished journalists. With so much focus on defending IP in recent years, the news media world lost sight of how to create more IP value in a distributed world of publishers and mobile news consumers.

To be fair, some of the leading news companies like the NYT have done a reasonable job of experimenting in all of these new technologies. But across the board, you cannot name one instance in which any major news organization has led the industry in radical transformation of news technologies. Why? Back to scale: since the new technologies enabled success for individual publishers with less capital investment, it just didn't compute in the traditional minds of news organizations how this could spell a win for them. You may as well have asked them to define a full-color world in gray-tone.

As long as existing news organizations focus on trying to keep its capital focused on empowering centralized publishing organizations, then this trend will continue. It's the key to many pseudo-distributed publishing efforts' failures: AOL's "hyperlocal" Patch didn't enable technology to empower one single independent publisher - just a sadly underpaid smattering of overworked local journalists. By contrast, AOL's stable of acquired blogs and online news outlets are doing pretty well as independent and well-differentiated brands. They don't go out of their way to help people invent new brands independently, but at least they have some apples-to-apples ways to compare methodologies. In the trade magazine world, there has been enormous centralization of infrastructure and a reasonable amount of consolidated capital investment, but that's more about squeezing more profit from largely diminished operations: there's no real thought about how to help people to walk up to their platforms and start publishing.

So will every one of these superstars gone indie or nu-skool succeed? Of course not. But that's not the point. The point is that a publishing system that does not enable them to follow their dreams more effectively is one that's likely to continue to lose brand value and capital resources. Until then, as long as these folks can park their dreams on WordPress and Google AdSense, the slow dismemberment of major news media companies will continue.
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