I.

Understanding:  The “new paradox of journalism” that the report found is that although there are more news outlets, they are covering fewer stories with less depth. The domino effect of media proliferation has led to a fragmented audience which in turn has caused news outlets to lose money which has forced them to reduce their newsrooms which has ultimately led to diminished and outright poor coverage.     

Poor coverage of the same story across a plethora of publications will in turn lead to an exodus of audience and finally the failure of most of those publications.

If news organizations concentrate on their core competence, however, this theoretical situation does not have to come to be.

With bureaus shutting down and newsrooms shrinking, it is obvious that fewer sources, especially news agencies, will cover general national and international news. As for different publications printing the same story, this fact is immediately realized simply by reading the accounts in different publications on the State of the News Media report, most of which highlighted the same points and used the same quotes.
 
Embracing: Instead of continuing to print wire copy from agencies and large papers while struggling to keep bureaus open, regional and local papers should refocus their efforts to cover what matters most directly to their readers: the news that surrounds them. Local papers should cover bake sales and town sports while regional papers hold state governments and major business accountable to their public.

Innovating: Scrapping wire copy about national and international news is no longer detrimental to the general knowledge of regional populations because of a feature of the Internet newspapers have been naught to use: linking.

Instead of rewriting the same news over and over again or printing the same agency articles, a practice which the State of the News Media report so negatively describes, local papers can simply link to national and international stories and perhaps place a sidebar on the front page of their daily print editions which highlights the previous day’s most important headlines. Then, local columnists could comment on what really matters to their readers; how those wire stories touch home. (note: the San Jose Mercury News tried a similar experiment in the summer of 2005 but cancelled it after objections from readers. In pure speculation, I believe the future will show that the Merc had the right idea but launched it too early).
 
II.

Understanding: The phenomenon affecting newspaper revenues, according to the report, is news aggregators: “The more they succeed, the faster they erode the product they are selling, unless the economic model is radically changed.”

These news aggregators, however, are not going to go away. Like search engines, news aggregators make it easy for a news reader to find the topics she seeks, a feature all the more important in today’s world of personalization.  

But news aggregators don’t necessarily stop at Internet company sites. Blogs that scan the news (including the one you are presently reading), copy/pasting excerpts and headlines from stories so that they can comment on them, are also diverting revenue from newspapers.

Embracing: The fact is, aggregators and blogs drive traffic to newspaper websites, and thus, news organizations need to accept them as part of the new media landscape. That, however, still doesn’t mean that news organizations shouldn’t receive revenue from these sites, which are essentially making money off of what others produce.

One such revenue model already exists in YahooNews, which has revenue sharing deals with several major news organizations; Yahoo posts their content on its site and then shares its advertising revenue.

GoogleNews, on the other hand, is a completely different beast. It has deals with a few organizations but tends to post and mix headlines, abstracts and images from all kinds of sources free of charge. Although GoogleNews doesn’t make any money directly, it is predicted that it will soon add advertising to the recently un-Beta-ed site.

Bloggers that use extracts are the most difficult for news organizations to deal with, simply for their sheer numbers. Popular bloggers, which do little real reporting of their own, are definitely pulling in significant advertising money off of content from news organizations without paying a dime.

But what if they were paying?

Innovating: Subscriptions are dead, at least online. Those that have worked are few and far between and still bring in far less revenue than their print subscriptions.

But it is not that most news outlets did not originally charge for online news that has caused the death of subscriptions. It is more so the choice, the freedom of every user to access any site in the world that the Internet provides that has unlocked articles once caged up by subscriptions.

The online alternative to selling subscriptions is “selling” individual articles through a system of micropayments (see detailed explanation below). Such a system, in which the newsreader would automatically pay a very small sum per article clicked on, would leave her free to read the articles of her choice while still putting a bit in the pocket of the numerous publications she browses.

In this sense, news aggregators and bloggers would not only be driving traffic to news sites like they do today, but also revenue. And bloggers themselves would be paying, no matter how minimal a sum, to originally access the article to which they send other readers, making their use of excerpts and headlines more justifiable.  

III.

So how are these two “destructive forces” related? How can innovations in content and revenue be combined to guide newspapers?

If newspapers understand how aggregators work, they will understand why they need to stop wasting time, money and space printing content that can just as easily be found elsewhere.

If newspapers embrace aggregators as tools which make it easy for readers to find content of specific interests, they will embrace the role they need to play in their own core competence, refocusing their efforts on unique journalism.

If newspapers innovate forming a universal micropayment system, they will innovate by linking to one another, driving their own readers to stories of interest outside of their own core competence.

Ultimately, the practice of micropayments and linking will improve the overall quality of newspaper journalism; paying readers will not return to publications that did not meet their standards and aggregators, bloggers and other papers will not link to sub-par articles.

And indeed, although it agrees we are now in the initial stages of a complete revolution in thought, practice and business of journalism, the State of the News Media report concludes that, “The answer(s) (to the pressing questions facing the news industry), we suspect, will be in the journalism, not merely in the business strategies that fund it. And if the past tells us anything, it’s that the two sides cannot flourish unless they move together.”

Source: State of the News Media 2006

Micropayment quickie

The concept of micropayments, which was developed in detail as far back as 1994, is easy enough to understand. The implementation, however, is difficult to say the least (there is $50 million out there that many feel should be used researching innovations such as this). For the sake of time, let’s avoid an explanation of implementation and look at the practice and revenue it would bring newspapers

Let’s say a system was developed where even the most intense online newsreader’s news reading costs per month was around $20. An average reader would thus spend around $10 dollars per month browsing any publication that suited her fancy.  Now let’s say that the average newsreader spends about a quarter of her time, or $2.50 per month, with her favorite large paper, say, the New York Times.   

According to today’s best new print subscription deal from the New York Times ($4.85 a week), a reader would spend $19.40 a month, or $232.80 a year to receive home delivery. With a million print readers, approximately the circulation of the Times, the Times brings in about $232 million in print subscription revenue.

Nytimes.com’s readership, on the other hand, currently hovers around 12 million unique visitors per month. If the average reader paid a collective $2.50 a month for all the articles she read on the Times’ website, that would result in combined annual revenues of $360 million for the Times, and that doesn’t include expensive printing and distribution (disclaimer: math is not my strong point so please let me know if I’ve made a mistake).  

Chances are, such a system would result in the hierarchy of news organizations focusing on more specific content and bringing in the amount of money they need to maintain themselves and turn a profit.