News Hacking: Journalism in a Digital Era – Introduction and Framework

News Hacking is an ongoing series relating to the trials, tribulations and possible solutions to the ongoing journalism crisis affecting all major American metropolitan papers. Its primary focus is to discuss means in which to stem and reverse the tide of readership and monetary losses.

This is ultimately an optimistic perspective, in contrast to much of the perspectives in the industry today. Its underlying philosophy is simple: crises illustrate their own solvency mechanisms, and there always will be a solvency mechanism. Often, even always, it is found in the very source of the industry’s disruption.

It just takes the right vantage point to see it.

This first entry introduces the issue at-hand, and the theoretical framework from which the author will approach the problem of readership and monetization.

To hear printmongers speak of it, in the beginning there was a steep and unexpected collapse. During 2008, echoing the massive, sweeping recession that hit the globe in general, the news industry saw its aggregate stock value drop a staggering 83.3%, a plummet that ate up roughly $65 billion over a period of just one year. Sudden, absolute chaos swept the industry – Pulitzer-winning Christian Science Monitor folded up into a compact, skeletal online presence. The Seattle Post-Intelligencer announced that it was closing its doors. Truly, the end of quality journalism was nigh, and the future held nothing but partisan cable news, defamatory blogs and news aggregation websites recursively regurgitating each other’s content!

Or maybe not so much.

The hyperbole aside, the problem plaguing the industry stems from a lot farther back than 2008. While the dramatic collapse of the Bush-era economy certainly washed out the last keystone of the entire industry, it could have only done so if the construct was already thoroughly rotted through.

The most obvious problem is, simply, monetization. Or, rather, the lack of it. Many of the newsprint industry’s foundational revenue sources had been yanked out from under them. Classified advertising, which used to make up a good 41% of their revenue sources, quickly evaporated as online alternatives grew in dominance. Craigslist is an oft-blamed culprit for this – but Craigslist isn’t alone, merely the most similar in appearance to a newspaper’s broadsheet listing of local sales and services. The likes of Amazon and eBay had already started the boulder rolling downward on the news industry, and niche listing services, from Yelp to Artsopolis, added bleeding papercut after bleeding papercut to the hemorrhage.

These days, classified advertising had sunk to a quarter of newspaper revenue. Which is not to say that it’s been reduced by half, quantitatively – in fact, with newspaper advertising being reduced across the board, the actual outlook is far, far worse.

The loss of general advertising revenue follows a similar story. Public attention has wandered off the limited spaces of the broadsheet – and, so, every square inch of advertising space faces a steady devaluation, as their inherent worth is completely dependent on the paper’s circulation numbers. But why buy a newspaper when you can access its contents at any time from anywhere with a net-accessible terminal? Smartphones, and the latest iPad (despite the hype around it), only makes this worse as cellular networks mobilizes access to near-universal ubiquity.

And where the eyeballs go, so does the advertisers – so every lost customer, who would prefer to access content for free, is yet another reason to abandon the ailing presses.

Unfortunately, online advertising has proven far short of allowing an equitable tradeoff to the decline of print advertising revenue. The root of this is simply due to the fact that the form of advertising that works for print is not the form of advertising that works online.

You can add as many bells and whistles as you want, making advertising pop up, interact, move, speak and scream – but, online, all that does is annoys the reader and makes it even less likely that they’ll click on through to whatever product or service was offered. In fact, all those tricks and performances only makes it more likely that they’ll download ad-blocking software – if only for the safety of their computers, as the same bells and whistles have often been exploited as means of delivering bugs, viruses, Trojans and other nasty things.

But why is this? On its face, there are few differences between an advertisement image on newsprint and one online. In fact, due to the flexibility of the virtual medium, the online one even looks better. Yet its intrinsic cost is even less than that of the devaluating physical adspace. Why would it be worth less online?

Geographic (non)limitation

That giant freaking Fry’s Electronics ad on the back of the Mercury News’s technology section specifically markets deals for the stores in the geographic region of the MercNews’s distribution channels, and is arguably one of the few things keeping the paper afloat, especially after Knight Ridder’s collapse. The stacks of coupons folded into the paper are also targeted for local stores, supermarkets and retailers – though, often, “local” means “local corporate branch.” But the effect is pretty clear – for newspaper advertising valuation, it’s not just the circulation numbers, but also where they are, and how likely it is that the readers will interact with the advertised business.

Online advertising doesn’t have that virtue. Their market penetration, though steadily increasing, isn’t anywhere near the level of metropolitan papers yet – one number cited to me is that an area magazine is considered getting by with 33% penetration, while an online e-zine equivalent is considered wildly successful (for its kind) with just 3%.  In fact, online news cites don’t do hyperlocal very well at all – especially in comparison to the sort of throwaway ‘zines that are given out completely free, and are a solid 50+% advertising by volume, hyperlocal sites actually lack the same sort of every-street-corner ubiquity of the neighborhood presses.

Metro papers, however, aren’t as deeply tied to their local regions, making their names on state-wide, national and international coverage. This is fundamentally wrong, from the perspective of monetizing physical media, for the simple reason that it’s easier and faster to get a newsflash from the location of the incident. Excepting their sports pages, which by necessity are tied to local teams and events, there is little reason for their readership to pick up a physical copy – and since their readership is often spread across a geographic region too large for precision-advertising, their value as a carrier medium for local ads is nonexistent, and the same goes for their website.

Reading Habits

Reading news online and reading news on print are, despite superficial similarities, actually two very different actions – though their difference is often overlooked in any discussion of revenue problems.

To whit, reading a physical copy of the New York Times is inherently a leisurely activity. The reader browses through the pages, often skimming over stories. But the process often takes up a solid half-hour to full hour, sometimes going back and forth over articles of interest. The reader is generally catching up on ongoing events – the attachment to individual stories is variable, but the time committed is steady.

This is actually ideal for the simple image advertisement. While the reader might not be interested in the advertising for its own sake, his or her exposure to it can be measured in entire minutes, etching that brand or deal into the reader’s scope of attention from sheer exposure.

Compare and contrast to online reading: again, the reader isn’t interested in the ad for its own sake. But the reader is very interested in the article at-hand. In fact, there is an increased relationship between the reader and content for online news: by clicking on the article, they are more content-focused than they are for newspapers, demonstrating not passing interest in keeping up to date on affairs, but active interest on the subject at-hand. This is not to say that they’re not skimming some of the stories, but the reader’s intent in reading the news online differs fundamentally from their approach to print.

In fact, this is why noisy and intrusive digital ads are even more annoying than ads taking up three-quarters of a broadsheet with the story packed into a corner, and cause folks to download Adblock en masse: you’re bloody distracting them, dammit! They’re not browsing through the news for its own sake; by clicking on the link, they’re giving an implicit vote of specific interest on the issue.

Reader Dispersion

Unless you’re a media obsessive, particularly fastidious in making sure you get an unbiased picture, or just have more money than you know what to do with, you’re probably not buying the San Francisco Chronicles, Mercury News, New York Times and Wall Street Journal all at once, together, and everyday. You’ll grab one or two at max, and stick with them – especially if you’re a subscriber.

This is absolutely not true for online readers.

With Google News and other content aggregates, there’s very little incentive to stick with just one source. Certainly, as the sites are free, there are no monetary incentives to do so. Readers graze through not just one or two but a whole range of sources – and not just the biggest mainstream presses either. Blogs, RSS feeds, minor presses… while the likes of the NYT, BBC and other heavyweights will get the most views, off reputation if nothing else, there’s nothing stopping readers from going elsewhere, especially in pursuit of information that the big sites don’t cover. Given the inherent limitations of how much they can cover – and especially if they tie print content to online content – this practice isn’t just mainstream but ubiquitous.

And it’s yet another reason why advertising revenue both online and off is sinking.

Again, advertisers are paying for what they estimate to be the time the reader will see – and be interested – in the advertisement they put up on your site or paper. A reader that grazes through five, ten or fifteen different sites, with no particular loyalty to any of them, is likely to forget an ad he’s only seen on one site. Repeat exposure, however, means paying each and every individual source – with a limited advertising budget, advertisers will demand that sites lower their ad hosting fees to compensate for this.

Advertising networks and Google Adwords only goes so far towards alleviating this problem. True, advertisers now only pay one source for viewership on multiple sites. But the payoff to each individual site isn’t much improved, as it’s still split amongst all site owners plus the network administration service. It’s not an actual solution, merely a way to streamline and increase the efficiency of the buggy, lossy status quo.

To summarize it succinctly, the approach to website advertising has been All Wrong.

Doing it right requires a vastly different framework.

The philosophy of the Thoughtscream newshacking approach is dependent on three underlying rules elicited from the problems addressed above:

  1. Content monetization must work with, not against, readership trends.
  2. Means of monetization must be made to reflect, not attract, reader interest.
  3. Reader demographic defines monetization viability.

On an even more fundamental level, to conduct successful online news one must play to the strengths of the digital medium, not shore up weaknesses in print. Part of the problem with print journalism is that it’s print journalism. It has an inherently steep overhead, consisting of expensive press machinery, a complicated bureaucracy, kilotons of pulp, gallons of ink, and whole fleets of delivery vehicles, so on and so forth. Bad enough that they have to compete with small but flexible online news sites like ProPublica, whose primary overhead is strictly human resources – but by putting up websites, they’re ultimately cannibalizing themselves!

One of the many rumors behind Rupert Murdoch’s curmudgeonly declaration that all News Corporation sites will soon find themselves locked behind paywalls is that he fully expects to not turn a dime from doing so – at least, not turn a dime from the websites. But by doing so, he hopes to push News Corporation readers back to News Corporation print. And, certainly, the old man’s love affair with the industrial press is well known and supports such a claim.

But time travel, as Stephen Hawking reminds us, is only possible in one direction – forward. It is already the twilight of the age of print – and the eve of the age of digital news. In a society of ubiquitous online presence, it does not make sense to favor the printing press.

Rather, the only logical conclusion, in the face of the crises that plagues the print world, is that the only path to the future is one blazed by and solely from digital distribution.

Next Wednesday, I will discuss what I feel to be the first step towards answering the question “how?”

Jesus christ, I’m out of practice. It’s 4 AM as I write this, and this article turned out way too long and rambly. A further note, outside of the scope of the article: EDITORS ARE A NECESSITY, NOT A LUXURY.

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~ by Gonzo Mehum on May 10, 2010.

4 Responses to “News Hacking: Journalism in a Digital Era – Introduction and Framework”

  1. I look forward to seeing the how. I just want to note one thing in passing however: as you’ve noted, brand loyalty is Much Lower on the internet. Any source that attempts to monetize its content needs to practice extreme caution, as there is very little reason for people to stay and support them, when they can obtain the same or similar information from other, lower-cost or free resources. I suspect that problem is inextricably linked with ‘how’, and is a vastly non-trivial issue to address…

    Just out of curiosity, have you done any kind of survey to try and get an idea of how many people habitually browse with ad blockers or similar tech?

  2. yay new post..

  3. TW: Ars Technica once put out a plea to their readers to not block their ads so that they could make the money off the eyeballs, and provide specific instructions on how to customize things like AdBlock so as to let through the Ars ads while maintaining an ad-free experience elsewhere.

    http://arstechnica.com/business/news/2010/03/why-ad-blocking-is-devastating-to-the-sites-you-love.ars

    This suggests to me, at least, that a significant number of people browsing the web are doing so with ad-blockers installed, probably after one bad experience with the screaming, blinking, very annoying Flash-type ads.

    I’m also looking forward to the how. I suspect it involves hyperfocus, so that Thoughtscream media appeals to a particular group, and that Thoughtscream advertising only runs things that would be of actual interest to the people reading.

  4. […] News Hacking: Journalism in a Digital Era – Introduction and Framework « THE THOUGHTSCREAM […]

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