The crisis facing the business models of print media around the world
Jarmo Raivio writes:
"Journalistic organizations need to stop making a product for a world that no longer exists", argued Professor Robert Picard at a recent RISJ seminar on the crisis of the business of journalism.
For the past few years the Western world has experienced a crisis in the commercial fundamentals of journalism. It has been made worse by the recession, but underlying the short-term problems there is serious long-term damage to the journalistic business-model: the product has changed, the market has changed and especially the Internet has brought in a host of new competitors.
The wishful thinking is that the current crisis can be solved by bringing in new money. A struggling publisher wants to get money from the readers by building a paywall. A journalist laid-off from a traditional news organization is perhaps hopeful that the next pay-check might come from a non-profit foundation, such as the Pro Publica in the US.
Professor Picard thinks that just getting new money is not nearly enough - there needs to be a thorough re-evaluation of what the core business of newspapers actually is.
"Society has changed, but news organizations have not changed to the same degree. The role of news in people's life has changed and there is more choice in where to get your news. Newspapers do many things that do not fit very well the customer's lifestyle anymore."
The inevitable result of this rethink should be that newspapers start to offer less content for a smaller group of people and at the same time charge them more, argues Picard.
Asking more money for less is usually a tricky proposition, but it is the only way out of the schizophrenic situation, where newspapers spend much of their resources catering to people who are not ready to pay for the product. Most of the things newspapers do nowadays has very little to do with news.
This used to make sense, because having a food, automotive or gardening section gathered a large audience, which could be sold to advertisers. Now much of the advertising is gone and will not be coming back. And so is the large audience, because people increasingly get their recipes, gardening tips and other types of specialized content elsewhere. Soo news-organizations need to think long and hard where to put their resources, says Professor Picard.
"Papers say we can't give you news about Africa, because we can´t afford to put people out there anymore. But wait a minute, the people who are still paying for the paper are the ones who like hard news and in a newspaper format. They pay, because they like quality news. But we give them more news about Natalie Portman or whatever. It is a very strange way of thinking about your business."
Professor Picard does not see the iPad or other tablets as the magic solution that will save publishers from having to radically rethink their way of doing business. Why would people who are not willing to pay for a newspaper all of a sudden change their minds when the newspaper is on an iPad?
Finding a working new business-model for journalism means taking risks and perhaps even failing along the way. Newspapers have been slow to start, but Robert Picard is at least somewhat hopeful that the business of journalism is not irreparably damaged. “There is still time to adjust”, he said.