Reality Check for News: Guilt Trips Arent a Business Model

Theres no shortage of bad news out there for traditional media outlets. Continued circulation declines and advertising revenue shortfalls are producing a widening financial chasm that even paywall revenue for leading brands like The New York Times cannot hope to bridge. Do we need another litany of the ways in which media is changing and how traditional publishers are doomed? Regardless, media consultant and author Jeff Jarvis has come up with a breakdown of what he calls hard economic lessons for news, and it makes for somewhat gloomy reading. That said, however, there are some glimmers of hope amid the despair.

Doing good doesnt pay

Jarvis sets out to disabuse existing media players of some of the myths and rationalizations they have for why people should pay them for their content. For example, he says that:

Should is not a business model. You can say that people should pay for your product but they will only if they find value in it.

and later adds that:

Virtue is not a business model. Just because you do good does not mean you deserve to be paid for it.

At the risk of putting words in Jarviss mouth, this sounds very much like some of the reasons that The New York Times and other newspapers (such as Rupert Murdochs Times of London) have given for implementing pay walls around their content. Their argument is that they provide a valuable public service, and therefore people should pay for it not because they want! to but because its the right thing to do.

As Jarvis notes, neither of these arguments which both rely, to a degree, on making people feel guilty is going to create a valid business model for news. Even if the New York Times executive editor Bill Keller would like people to feel bad about reading aggregated snippets of its stories at The Huffington Post, that doesnt mean that they are going to do so.

So what about nonprofit or other models? These arent going to work for most outlets, says Jarvis:

Begging is not a business model. Its lazy to think that foundations and contributions can solve news problems. There isnt enough money there.
There is no free lunch. Government money comes with strings.
No one cares what you spent. Arguing that news costs a lot is irrelevant to the market.

Thats not all. Jarvis goes on to detail all the reality checks that newspapers and other publishers need to grapple with as they search for ways to survive. By the end of the list, any self-respecting newspaper publisher or editor could be forgiven for wanting to simply turn out the lights and shut down the presses.

Think and act local

So where are the rays of hope? Local ad sales is one, says Jarvis: newspapers could become the broker between advertisers on a community level who arent taking advantage of the web, and services such as Groupon (although Jarvis doesnt specifically mention them) and Google Place pages and Facebook deals. This is one reason why I and others have wondered why it took so long for newspapers to try and compete with Groupon by appealing to advertisers who want to reach readers in new ways. Jarvis also mentions that there is growth to be found in net! works, a lthough its not clear how that would help finance the news (to be fair, Jarvis says his post is a work in progress).

Jarvis could be criticized for adding to the litany of despair in the media industry, but his list is the culmination of several years worth of work trying to come up with new business models for the news industry both as a consultant and advisor to newspapers such as Canadas PostMedia and as a professor at the City University of New Yorks graduate school of journalism. Jarvis helped coordinate a New Business Models for News summit at Aspen in 2009, and followed that up with presentations on some of the models that were featured at the summit, including one that is embedded below.

Jeff Jarvis on New Business Models for News 2009 from CUNY Grad School of Journalism on Vimeo.

In a nutshell, Jarvis proposes that new business models can emerge when existing players reduce their costs through outsourcing (and crowdsourcing), focus on the value that they can add instead of just reporting what has already been reported which he calls do what you do best and link to the rest and use social media and related services such as Twitter and Facebook to create a distributed news network. (For more of his thoughts, check out this Slideshare presentation from 2008.) Many of his ideas are already being put to the test by the Journal-Register Co., which CEO John Paton has turned into a digital first news organization, as I described in a recent post.

Post and thumbnail photos cou! rtesy of Flickr user George Kelly

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