Business Success

A fundamental shift in the mode of news production

Changes in news production and journalistic employment are often simplistically explained as the results of technology, recent economic conditions, or changes in audience preferences. All these factors have played roles, but a more fundamental and consequential shift is altering the nature of news work and news production.

For more than a hundred years news production has been characterized by the industrial mode of production in which news factories mass produced news. They brought together the resources and equipment necessary for gathering and disseminating news and they relied on trained and professionalized news workers. The product became property exchanged in markets, with geographical, market, and economic factors constraining competition to provide news products.

Although some elements of that production mode remain in place, one can observe news provision splitting into two new production modes—a service mode and a craft production mode. These have enormous implications for the work of journalists and how news is provided in society.

The service mode is one in which news products (newspapers, broadcasts) are being transformed into services with news providers streaming news and information across a variety of platforms, such as print, computer terminals, tablets, and smartphones, and other screen-based devices. They are now focusing more on distributing news rather than gathering and producing it and are relying more on news and commentary produced by news services, content provided to them by the public, and links to other news providers than on their own production.

These news service providers are using pricing models that differ from those of the original product base, with varying prices for access to different bundles of platforms and different levels of access to premium and specialized news content. Pay systems such as those of Press+ and Piano Media are providing mechanism for paid access to multiple news providers—a new form of service. The shift to the service production mode follows that of the paid streaming audio and video services that have proliferated in the past decade.

The shift is making news service providers increasingly dependent on acquisition of news content produced by others, leading them to offer their content at relatively low prices, and inducing them to create better user experiences. We will increasingly see such services offered at the national and international levels by larger news enterprises.

Concurrently, a different form of production is developing and gaining acceptance–the craft mode of news production. This is production by journalist entrepreneurs and small-scale journalistic cooperatives that are emphasizing the uniqueness and quality in their news. Those working in the craft mode are focusing on special topics such as climate or defense, employing specialized techniques such as investigative or data journalism, or serving smaller localities as general providers. Most are providing news directly to consumers, as well as providing materials to those practicing the service mode.

These new modes have important implications for how journalists work, the resources available to them, and how they organize their careers, compensation, insurance, and pensions. To date, little consideration has been given to how cooperative institutional support for news workers should be organized in this new environment. Journalists unions remain an artifact of the industrial mode of production and are changing very slowly and professional associations remain focused on issues other than work and labor. Something needs to change.

Media, communication and struggles over transparency

Issues of transparency are not new, but have been magnified in the information society—often because of the scale and scope of information available—and because news media are increasingly part of the story, not merely, the storytellers.

The roles played by leading newspapers worldwide—the New York Times, Washington Post, The Guardian, Le Monde, O Globo, El Pais and others—in reviewing and publishing stories based on disclosures by Wikileaks and Edward Snowden’s NSA files have thrust them into the debate about how much transparency society needs. Arguments over information they published and whether disclosures serves public purposes have been animated. These debates highlight differences in views about transparency in security matters, but they also are forcing society to address more fundamental issues about transparency involving many other issues.

Transparency debates are not just a struggle over information and secrecy, but about the bases of human interaction and experience. Transparency is a philosophical and ideological concept based on the view that disclosure is good for society. From a philosophical standpoint, however, transparency is not good in itself—like serenity, beauty, or truth—because for thing to be good in itself it cannot produce harm. Transparency, however, can produce negative consequences by harming dignity and modesty, creating surveillance and means for coercion, endangering public safety, fuelling violence and conflict, and exposing proprietary information in ways that harm economic development.

Transparency does have functional value for achieving desirable outcomes, such as understanding the environment, exposing corruption and abuse of power, promoting trust, facilitating democratic decision making, and making price evaluations in markets. Information must be available or effective choices cannot be made. But it is not exposure merely for the sake of exposure, so it must be balanced with concepts of privacy, solitude, and security—which lead to debates about when and how transparency is practiced.

The debates taking place today are part of a highly visible struggle over transparency in information age. Digital platforms and all media are playing central roles in debates about the proper extent of transparency involving government, business, banking, and our personal lives. Media themselves are also gathering and using data from their users for their private gain, just as are other companies.

Some of the debates are occurring because of the differing norms and mores of the material and digital world. The norms of the material world tend to involve structure, authority, control, hierarchy, and formality; whereas the norms of immaterial world involve amorphous arrangements, collaboration, empowerment, egalitarianism, and informality. These differing norms and the struggles over the norms have significant implications for government, business, and personal life. They are part of a fundamental struggle over the political economy of information and data.

Wikileaks, Anonymous, and other actors are active participants in the struggle and battling powerful commercial and governmental forces that wish to impose the norms of the material world into the digital, non-material world. It is not surprising they have brought major media into their campaigns, nor should not be surprising that they have fallen afoul of state power. Activists with libertarian and anarchistic tendencies have historically generated backlashes from the state and elites because threats to power typically result in the exercise of power—a very Machiavellian response.

The debates over transparency, the use of information and data, and who should be transparent about what will grow more heated in the coming years. Media and media businesses will play important parts in the debates, not merely as conveyors of information about others, but also about the extent to which they will become more transparent on their own.

The deinstitutionalization of journalism

The most important change in news production today is probably the deinstitutionalization of journalism—the separation of journalism from structural arrangements that significantly influenced its development in the twentieth century.

The practice of journalism was heavily influenced in the past century by regular employment in news enterprises, hierarchical arrangements and organized beats, trade unions and professional associations, and common values and training.

These created strong institutional influences on journalistic work from employing organizations and professional colleagues. They provided institutional support to journalistic practices, journalistic specialization, and expanded news and information provision. The arrangements provided the foundation on which better journalistic working conditions and compensation were built.

The newsroom was a construction of the institutional arrangements and became the focus of journalistic life. The newsroom developed in the late nineteenth/early twentieth century after telephony altered the need for journalists to be constantly roaming the city and it has undergone several conceptual changes since that time.

Ironically, it is the development of better communication technologies and the digital era that are markedly changing the centrality of the newsroom in journalistic work. The number of journalists physically located in newsrooms is diminishing because of the ability to work fully from other locations and because of the reductions in regular employment.

In the new environment, the number of independent journalists working as freelancers or journalistic entrepreneurs—or within small journalistic cooperatives—is growing. There is growing pressure to expand the boundaries of the definition of a journalist to include non-professionals who regularly create and disseminate news and informational content.

These developments are changing the context of journalism, its norms and practices, the organization and direction of journalistic labor, perceptions of journalists’ identity, and its reward systems and career paths—all of which are visible signs of the deinstitutionalization of provision of news and the profession and trade of journalism.

In the twentieth century journalism was provided by insular news organizations that rarely cooperated with other news organizations, detached themselves from the society they claimed to serve, and often relied on news and information clues from elites and official sources. New, more flexible means of obtaining and providing news are emerging in the deinstitutionalized environment that rely on public accounts and data previously unavailable to journalists. Where these are taking us remains to be seen.

The deinstitutionalization raises a host of questions: How are these changes altering journalism practice? What does deinstitutionalization means to news, information, and an informed public? How can and does innovation takes place in non-institutional settings? How do the transformations underway benefit journalism? How does the declining importance of the newsroom affect the institutional nature of journalistic ethics and decision making?

These are fascinating questions in an intriguing transformational period.

The cachet of communications: Why city planners are enamored with media

Policymakers worldwide believe they can create vibrant media cities and are heavily investing public funds in hopes of reaping economic and cultural benefits from media and communications developments.

They believe media cities will help improve transportation systems and the provision of a range of public services, rejuvenate existing media firms, promote entrepreneurship and innovative start-ups, and create well paying employment for a new generation of workers. Policymakers believe media cities have transformative power to modernize the economy and support renewal of industrial or urban districts. These are highly optimistic beliefs.

The biggest problem is that few cities have monopolies on information and media production although the scope, scale and types vary. If that is the case, how can one community stand out as a media city?

To be unique the city must find new ways to use communication and media to make life easier and help the public interact better with each other and society as a whole. But it is hard to keep others from adopting those practices as well. To be unique a city must provide a locale for information and media firms that is more attractive than other places. Locations with strong social and cultural amenities, skilled labor forces and supportive cultural and/or industrial policies tend to produce that result, but media cities also need a pre-existing base of media and information companies and need to build relationships among those companies and social institutions.

The idea of the media city is attractive to policy makers because media and digital products are fashionable, contemporary, and desirable. They are environmentally clean businesses and don’t produce heavy traffic and social disturbance. Policymakers also like them because they can connect the media city idea with other economic, industrial, and cultural policies such as telecommunication infrastructure policies, information and communication technology policies, and cultural policies supporting national identity and culture expression.

Political realities also come into play because media cities provide politicians opportunities that manufacturing, logistics and service industries do not. Pictures of politicians with celebrities and media proprietors tend to provide positive images and lead to access to people who can help them politically. The media city thus becomes a mechanism of political power and policies to create media cities tend to gain great political backing.

The fundamental question one has to ask is whether the hopes and benefits sought by policy makers and politicians are realized through media cities. Clearly transport and public services are improved by better information systems that inform the public and allow better management and deployment of public resources. Media cities have not, however, been highly successful at providing the value added, employment gains, and economic multiplier effects found from other types of industries. This is primarily because most information and media firms are microenterprises and dependent upon contract work.

Media cities have more successful in their transformative goals for modernizing perceptions of the local economy and renewing urban districts. They are especially effective as real estate development projects that benefit construction and building owners. But are those the best outcomes for a media city policy and the use of public funds?

There are downsides of media cities because the highly mobile nature of employment and production in information and media industries permits companies to play off competing governments for funding and tax advantages and to move when they are no longer available. Information and media firms also have higher product and firm failure rates than other industries and this tends to reduce long-term economic benefits by comparison.

The results for media cities are mixed, but they still carry cachet among policy makers. A good dose of realism is required in considering whether a media city policy is desirable in a community. To be effective, they policy must be nurtured and configured so it actually produces results beyond mere urban renewal and changing perceptions of the economic base of a city. Merely calling a place a media city is not enough.

What the Washington Post and Boston Globe Sales Tell Us About the New Breed of Owners

The sales of the Washington Post to Jeff Bezos and the Boston Globe to John Henry raise the question why people would want to own newspapers if they aren’t doing so for obvious financial gain.

There are clearly people who want to own papers for political purposes so they can directly influence debate and policy. This is certainly the case for the ultra-conservative Koch brothers, who have been trying to buy the Los Angeles Times this past year. But Bezos and Henry don't seem to fit that mold.

Bezos’ purposes for buying the Post are not the pursuit of profit. He certainly would produce better returns putting more effort into Amazon or another commercial firm. John Henry can expect far more returns from effort in his investment firm or his sports empire than the Globe. So why are they buying legacy media?

The answers lie in human traits. All of us need diversions. We need toys to play with; things to spark our interest and imaginations.

Bezos can clearly bring ideas and expertise gained from shifting the mail order catalog concept to the web and contribute his innovative spirit to the Post.The challenges of learning the media business and trying to transform its distribution and operations are clearly interesting and attractive. And the price for the Amazon creator isn’t high.

John Henry doesn’t bring great digital expertise to the Globe, but he does bring strong organization, marketing, and turn-around skills and experience to the effort. He also has strong local community ties and bringing ownership back to Boston is a gift to the city. Especially because hating everything associated with New York is the city's pastime.

The newspaper ownership will also make both of them more respectable as citizens, not just as businessmen. There is a long tradition of wealthy U.S. merchants, industrialists, and traders playing citizenship roles in public life and philanthropy after achieving immense personal success. These range from Andrew Carnegie to J.P. Morgan and J. Paul Getty to Bill Gates.

Some who moved into public roles have done so to gain respectability that eluded them because of harm they caused while climbing to the top; other because of a genuine desire to make society better.

The sales of the Post and the Globe reveal a breed of owner who wants not just respectability or making contributions to society, but a place to use their knowledge and abilities to tackle new challenges. Whether it will help the newspaper industry remains to be seen, but it will at least inject new ways of thinking into the industry.

Ambient news: All the news most people want

Ambient news is proving a significant challenge to news organizations trying to serve readers on multiple digital platforms and maintain their print and broadcast news operations.

Contemporary technologies all around us are now delivering breaking news, sports scores, and market updates on electronic screens and displays in elevators, taxis and buses, bars and restaurants, on the sides of buildings, through smartphones, and via social media.

In years past, we all had to deliberately turn to newspapers or radio and television newscasts, or at least glance at headlines at news stands, to get a quick overview of major events. That era is past.

Today news is free and ubiquitous and, unfortunately, provides all the news that most people want. This is bad news for those trying to provide news commercially.

In the past, newspapers and newscasts filled their space and time with non-news features and information designed to attract audiences that wanted only a little news. Most newspapers, for example, rarely carried more than 20 percent hard news during the past 50 years and provided a heavy diet of sports, entertainment, lifestyle and other diversionary content. Today, light news readers who formerly bought papers for non-news articles find plenty of that information for free on television and the Internet and they are abandoning newspapers and news broadcasts.

Those who remain the audiences of newspapers and new broadcasts tend to be heavy news consumers, people who want significant amount of news and serious information. They value the kind of news reporting that provides social benefits. Unfortunately, they are getting less and less of that news as publishers, news producers, and editors continue pursuing the audiences that have left them and are satisfied by ambient news. In doing so, news executives are leaving their prime audiences of heavy news consumers increasingly dissatisfied and without much incentive to pay the increasing prices needed to maintain established news organizations.

If print and broadcast news organizations are to survive and serve the purposes for which they were established, they are going to have to start paying attention to the audiences they have, rather than the audiences they wish they had.

European private TV has matured, but needs new strategies for development

The European television industry is one of the most balanced in the world, with public service broadcasters, advertising-supported broadcasters, and pay television operators reasonably dividing television revenues among themselves. For the 27 countries of the EU, pay TV accounts for about 38% of total revenue, public funded broadcasters for about 34%, and advertiser supported television for about 28%.

Unlike the US where private television dominates, most Europe private television began after liberalization broke the monopolies held by public service and state television in most countries. It has taken decades for private television to establish a mature place in the market.

When looking specific countries, however, total spending on TV (advertising, subscriptions, public funding) is not evenly spread. Adjusted for population, it ranges between €5 and €30 per person among nations, with an average of €15. There a notable differences between southern, central, and eastern European nations and nations in the north and west of Europe, where public service and pay TV are strong players.

Some markets are skewed with unusually strong TV subsectors. In Germany and Sweden publicly-funded TV is unusually dominant; there is unusually poor performance of advertising-funded TV in Bulgaria, Estonia, Hungary, Latvia, Montenegro and Romania.

Today, pay television is the most positive sector in European television, with subscriptions for basic services and payments for video-on-demand services growing and the sector benefiting from the growth of video viewing on smartphones and tablets, particularly for its original programming.

Advertising-supported television is being squeezed between the more stable funding of public service broadcasters and pay TV providers and being hurt because advertisers in some countries remain reluctant to accept catch-up viewing in audience measurements for program broadcasts. It is not benefiting as much from video-on demand services as public service and pay TV broadcasters because much programming on advertising-supported TV is not original production owned by the broadcasters.

In order to survive in the new television environment, advertising-support TV in Europe has developed a diversified revenue, combining income from advertising, paid programming (home shopping, religious programming, etc.), product placement, sponsored events such as concerts and fairs, telecommunication promotions and services related to programming, income producing contests and lotteries, and renting studio space and providing video production services for advertising and corporate use.

Despite find their niches, both advertising supported and pay TV operators are now mounting efforts to obtain public funding to improve domestic program offering. In a number of countries they are asking policymakers to create contestable public funding to produce quality domestic content. They have asked cultural ministries to set aside funds for the purpose or asked regulators to divert portions of public service license-fee payments for the purpose.

In the contemporary environment, the business model of European advertising-supported TV needs significant addition, primarily because traditional TV advertising has low value for both viewers and advertisers today and there is a need to seek news ways to connect the two commercially. The extent to which they will rise to the occasion remains to be seen.