Rising from the ashes of bad media business

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There is a great deal of commentary in the media about the future of the media. Never short of self obsession, media pundits and executives routinely announce that there needs to be a 'new paradigm': a different way of doing business that deals with the decline in advertising revenue.

AshesMostly, it has proven to be little more than hot air. The signs of impending extinction are unmistakeable.

For those who believe, as the great journalist G. K. Chesterton quipped, that the popular press is 'a conspiracy of a very few millionaires', the decline of mainstream media may not seem such a great loss. But for many, the thinning of journalistic ranks is not good for democracy or public representation.

Media executives have been unable to devise viable commercial innovations. Instead, they have focused on the journalism side of the equation, cutting costs and finding ways to deliver lumps of content on as many platforms as possible. There has been almost no attempt to address the central issue, which is to find new ways to offer products that help advertisers sell their stuff, without compromising editorial independence.

The traditional approach, which is to sell empty space, or time, to advertisers so that they can attract attention to their wares, no longer works well enough to pay for the journalism.

Space is no longer scarce in print journalism. Whereas newspapers are thrown in the bin at the end of the day, online news hangs around indefinitely. And many of the social media forums in effect offer free advertising space to users, and are also capturing most of the attention of younger consumers.

Yet there has been almost no attempt by managers of mainstream media outlets to move beyond the traditional techniques for garnering revenue from advertisers. Advertising departments in big media organisations are largely doing what they have always done.

One consequence has been a fragmentation of media sources, which has, at least superficially, increased the number of sources of information and comment. Access to media content has become more global because of the internet, which has made it harder for local media to maintain a point of difference. Citizen journalism, such as footage from mobile phones, is changing the nature of reporting. The internet is dominating not just the distribution of news, it is also becoming itself a source of news.

The thinning of the journalistic ranks is having a deleterious effect on independence and rigour. Younger journalists are required to produce such a large number of stories each day that they end up relying heavily on sources with strong vested interests that are skilled at the art of spin. 

It is becoming harder for journalists to devote time to the best way to get stories, which is getting out of the office and talking to people face to face.

It has always been a good idea to be sceptical about stories in the mainstream media, but now it is essential not to take them at face value. Those who are skilled at manipulating the media are, for the most part, winning, and journalists are losing.

The industry's paralysis is entirely predictable. Businesses almost always find it impossible to adapt to new circumstances. To understand why, one only has to look at how businesses are created.

The first step is creative. The aim is to devise a new product that is sufficiently in-demand to create adequate revenue and, eventually, profits. But once that has been achieved, the next steps are far from creative. The aim is rather to keep repeating the successful process of delivering the product, in such a way that it steadily becomes more efficient.

Once a business is established, and repetition takes hold, there is a tendency to develop habits (often referred to as the business 'culture') that are almost impossible to shift when circumstances alter. It is why the vast majority of businesses do not last longer than ten years and almost no businesses last longer than 20 years, some long established corporations or family companies being the exceptions.

Such temporariness, incidentally, is the best argument against privatisation. Businesses may be more efficient than government organisations, but they are also much more transient, and most privatised entities are supposed to last indefinitely.

The current fragility in the mainstream media will probably turn into a death spiral. Because of the decline in advertising revenue, journalism is already being savagely cut back in big media organisations and there is little indication that these cuts will cease. The loss of journalists has led to a decline in the quality of content, which in turn affects the audience and the advertising revenue. It is a vicious cycle.

New ways of combining content and offerings to advertisers will emerge. But it is unlikely to come from the existing mainstream media businesses. It is not true that old habits die hard; in business, they usually do not die at all. It is rather the businesses themselves that experience terminal decline. What journalism that does emerge from these ashes will be very different.


David JamesDavid James is a business journalist with a PhD in English literature. He edits Personal Super Investor.

Ashes image form Shutterstock

Topic tags: David James, media, journalism

 

 

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Existing comments

I become despondent when talk emerges of the demise of mainstream media e.g. newspapers. It's one of the joys of my day to read my favourite newspaper and I give little thought to how they actually make things work. Quality journalism is so important. So, I hope a solution can be found - maybe we need media moguls with PhDs in English literature, David?
Pam | 16 October 2015


I suspect printed newspapers are on the way out. The transition to online editions has already started. Advertising revenue here will be a money spinner. If new journalists are given sufficient time to research and write quality articles and there is sufficient editorial liberty - a crucial point these days - and proper mentoring good journalism may well survive.
Edward Fido | 19 October 2015


I'm afraid for this seventy-something consumer of news, views and information across all media, print, radio and electronic, old habits do die hard. I read newspapers, for example, with a pen in hand not only in preparation for doing the crossword but also to annotate news items and articles that I would like to pursue further. Maybe I might even write a letter to the editor or to an MP. My grandchildren read hardly any papers. magazines or books. Electronic media is their chosen field of news, information and opinion. And they seem to remember a lot of what they learn from their various devices. I'm pretty sure they don't even notice any advertising or promotions that appear on their Visual Display Units. Since these kids (8 - 35 years old) are the future market for years to come after I am gone Research and Development in mass media communication needs to be a major focus of mass media owners today. Otherwise the demise predicted by David James will come to pass sooner than expected.
Uncle Pat | 19 October 2015


I don't think we will realise how much the online and TV news sites rely on traditional print media until they are gone. The online news forums, opinion columns and 24 news chat shows all seem to get their content from "long form" media reports like The SYdney Morning Herald and The Age, for example, even though the readership and revenue in thosse publications is probably not going to sustain them for much longer. So what will the breakfast/morning TV shows and online opinion columns/comment forums use as a news source when these traditional/serious newpapers fold up and die completely? My prediction is they will have to return in some form or other, and it can't all rely on new media.
AURELIUS | 19 October 2015


The symbiosis between advertising and "news" in this article suggests the vital necessity of a national broadcaster. Oh and surely Uncle Pat deserves an AO for his scarcely part time services to communication.
Michael D. Breen | 20 October 2015


Michael, it's the nature of this symbiosis between editorial and advertising that has changed. Maybe I'm being nostalgic, but I can remember when commercial TV programs like A Current Affair and 60 Minutes were just as independent and cutting edge as 7:30 Report and Four Corners. It's only in recent years that the line between advertising and editorial has become so blurred. So we could argue this fluffy advertorial style of commercial journalism is a way to boost revenue to keep journos in jobs - but ironically it's had the opposite effect and lowered to quality to a level where viewers are switching off. My view is that advertisers would much prefer to sponsor quality, critical journalism (even if it means being critical of them at times), because they know at least people will be watching.
AURELIUS | 21 October 2015


Readership needs to understand there is a price for providing the service and be willing to devote a proportion of their budget for that service. i.e. You subscribe and pay for the public good of well edited investigative journalism. I am a new reader of Eureka and have not yet made that payment but I am likely to. I subscribe to The NY Times $400AUD annually, The Australian $300AUD annually and National Public Radio $250AUD annually. I subscribe to the ABC and SBS by default via taxes. I used to read the SMH but sadly gave up on the paper because of their inability to upkeep their long held journalistic standards. I have followed many of the FXJ journalists to the Australian. Staying informed will cost money. People need to give to get. How much would you be prepared to pay to stay informed? Its a question I like to ask friends. I have answered this for myself. Most have not even thought about it.
Luke | 04 November 2015


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