The Future of Professional Journalism

Recently, I received an email from a reader of my article How to save journalism? Get rid of the newspapers! on O'Reilly, which read as follows:

None of the [given] models look like jobs that someone could raise a family on. Do you think we're at the end of journalism as a way to make a living (as I did for 20 years)?

I responded, after some thought (and plenty of caffeine), with the following set of thoughts, edited slightly for ease of reading.

The Collapse of Big Advertising

I've been wrestling with this particular quandary for a while, as I'm sure you have. One of the things that nobody has been saying in all of this hand-wringing about the fate of papers is exactly why it is that they're all of sudden keeling over like extras in a murder mystery. There's a lot of pointing at the Internet as the obvious culprit (to carry the metaphor through) but I'm not really sure that the obvious culprit did in fact do the dirty deed. Rather, what's happened is that Big Advertising has collapsed, and Big Advertising has been so solidly welded to the newspaper industry for so long that once it fell, the newspapers for the most part were deprived of air.

Big Advertising in this case is essentially the collection of huge ad producers such as Young & Rubicam (Y&R) that for the most part have dominated the advertising landscape. Y&R is typical of top-down advertising corporations - it essentially had exclusive contracts with thousands of smaller agencies and design shops, which meant that they could make the multi-billion dollar ad buys, keep their (typically big) cut, then pass on the balance to their vassal agencies that would then do the actual design and production work. It would also handle large scale ad buys, typically with big newspaper consortia such as McClatchy or Knight-Ridder rather than individual papers. Local advertising filled out the balance, but the lion's share of the actual income that most papers received were not for want ads or house listings - they were the quarter, half or full page ads that would come in because they were a regional market.

The problem is that this model has been quietly unraveling for years. While the Internet and computer technology in general made large scale efficiencies in organizations such as Y&R better, it also meant that the barrier to entry for other smaller, more nimble ad agencies was also reduced, in many cases dramatically. Many of these super-agencies also significantly underestimated the extent to which the Internet would grow, and when they did finally catch on, it was often with me-too products and services that reflected an older paradigm of thinking (sound familiar?). Ironically, what this did as well was to push Y&R further up the food chain, towards handling ever higher end clients with increasingly large and expensive products, while reducing their presence in the Internet space.

Read More