Thursday, 28 May 2009

How to add value to the news - Specialize and dig deeper

News business needs reinventing itself, especially in the U.S. and Europe. The ongoing hunt for new news business models can be a tough, long-lasting process without any clear new killer applications or solutions. Actually, I will predict that ads, subscription fees, and different kinds of broadcasting taxes, will be the dominant revenue models for the news producers also in the future.

Google’s chief evangelist Vint Cerf voted last week for the ads in the sixth conference on innovation journalism at Stanford University. In his opinion, Google could help with this. In the very same conference Jason Pontin from the Technology Review argued that consumers should pay more for what they read.
Of course, Mr. News Corporation said this already earlier in May. It is fascinating, how Rupert Murdoch has once again acted like a first mover, and truth-teller. Indeed, free is not a good business model for news in the era of internet. But Pontin also predicted that in the long run, newspapers can be published only weekends, and magazines and newspapers will be much smaller.

Interesting to see, whether this kind of development happens all over the world, or only in countries with high broadband penetration (over 60 %). It is not a big surprise that the newspapers started to suffer first in the tech savvy Silicon Valley (the San Francisco Chronicle and the San José Mercury News, and Boston (the Boston Globe) area in the U.S. However, it could be a surprise, but as a global industry, printed audience still continued to grow last year. According to the World Association of Newspapers (27.5.2009), “Despite the global financial crisis, newspaper circulation grew 1.3 percent world-wide in 2008”.

But even so, big and smaller news corporations are suffering alike, and the quality of journalism is in danger in many cities and rural areas in
Western world. The price of the news people want to pay is close to zero, but at the same time, the production costs of original reporting remains high. Traditionally, the most expensive beats are foreign news and investigative reporting. No wonder that several new online only news ventures like Global Post and ProPublica are created to fill these news holes. They are mainly funded by non-profit foundations. (See more new news ventures on the right side of this blog.)

But maybe even this is not enough. New ideas, inventions, and radical innovations are still greatly needed. One of the worlds’s leading media economics scholars, Robert G. Picard argues in the online-only publication Christian Science Monitor (19.5.2009) that “the demise of the news business can be halted, but only if journalists commit to creating real value for consumers and become more involved in setting the course of their companies”.

I agree with Picard. News organizations should concentrate more on original and unique reporting in order to create more value to their customers. I will advice that, first of all, all news rooms should specialize more, choose one or two topics of news, and reserve enough resources to dig very deep within these
niches. Secondly, the news organizations should try to become the leaders of producing this special content, and create an interactive community. Finally, the news rooms could possibly market and sell this expertise to the whole world in many forms: in news, reports, books, and even seminars and conferences. (Of course, the news organizations can also maintain the minimum basic daily national and international news flows as well, but this can be done with the help of the newswires, or cooperating with other news producers.)

This is a new challenge to many news organizations – but they have to focus more in order to survive.

Finally, the best example of a news media success story based on quality reporting is a British magazine - The Economist. The Atlantic tried just recently figure out how did the Economist managed to grow despite the global downturn, and crises of the other news weeklies, Newsweek and Time. In conclusion, the analyses of the Atlantic did not go deep enough in order to find out the meaning of its own research unit, the Economist Business Intelligent unit.

The latest example of the importance of scoops, a
nd quality journalism, is the Daily Telegraphs revelations about MPs expenses. According to the Guardian the paper sold a million extra copies.

(C) Photo by Turo Uskali, 20.5.2009 @ IJ6/Stanford

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