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November 24, 2009
If newspapers want to survive in the new media landscape shaped by digital technology, then the newspaper industry (and the debt-ridden commercial television one) is forced to consider new business models. The reason is the economic reality of advertising revenues slumping and circulations of printed newspapers continuing their long decline. Newspapers and televison stations have sharply cut their budgets to survive. They have closed foreign bureaus and bought out or laid off editors, reporters, and photographers.
The challenge that the Internet poses is both one of destroying the financial base of reporting and dismembering the public that the press has long had. It is probable that the national broadsheet media (eg., NYT, the Guardian, and the Australian,) will probably be able to assemble a public of sufficient size on a variety of platforms to generate the revenue to support a substantial level of reporting.
Currently, the shift to a new business model has been dominated by News Corp's very loud threats to block search engines from crawling the content of its newspapers. Google is the enemy ("parasites" that are "stealing" our content) says News Corp. Several indications of News Corp's strategy for profitmaking in a digital world can now be discerned.
First, James Murdoch told an investor conference in Barcelona that newspapers will play a smaller role in the future with a smaller online audience:
In the business of ideas, which is the business that we are in, we do think journalism plays a role, and we do think there are business models there that will make a lot of sense, albeit perhaps not at the scale of some of our broadcasting businesses and other entertainment businesses......Is it going to be as big a role? No. Structurally, television is vastly more profitable and a big opportunity.
The consequences of News Corp's shift to a paywall or subscription for its digital journalism means that it will have a smaller audience than it has by giving it away for free.
The second indication is the way that News Corp is taking advantage of Microsoft's search engine war with Google. Microsoft has approached big online publishers including News Corp to persuade them to remove their sites from Google’s search engine and index them with Bing in order to increase Bing's market share. Microsoft is willing to spend big to ensure that its Bing search engine is a success.
This is a way of enclosing News Corp's content behind a group paywall. News Corp is willing to sacrifice a lot of traffic to the websites of papers, such as the Wall Street Journal and The Times, in return for a payment from Microsoft. Since Bing’s share of the search market is under 10 per cent whilst Googles is about two-thirds of the market, this means significantly smaller online audiences and therefore a probable loss of online advertising revenues. However, Murdoch has said the Google traffic is not worth very much as the revenue from search traffic is low.
The third indication of News Corp's strategy is suggested by Paul Starr's argument in the Columbia Journalism Review that:
As the diminished public for journalism becomes more partisan, journalism itself is likely to shift further in that direction. That tendency is already apparent online, as it is in cable. And so there is a disconnect between the recommendations that Downie and Schudson offer, which reflect a tradition of nonpartisan professionalism, and the pressures of the emerging environment. Not only is the audience for news likely to become more partisan; so is the universe of potential donors to nonprofit journalism.
News Corp is in the forefront of partisan commentary style journalism--eg., Fox News and The Australian.
These three tendencies indicate a defensive newspaper strategy to protect profits in the context of the digital-media revolution and the increasing irrelevance (decomposition?) of newspapers in their printed form. They also suggest market failure in fields including Australian content, investigative journalism and rural and regional reportage.
This highlights the need for public journalism and wire or news-gathering services in the public sphere or space: a not-for-profit space by design, that exists not to make money but to serve the public and it is accountable to them.The media in this space addresses the audience as citizens, not as consumers in the marketplace.
This public journalism is one that should be supported by the universities' journalism schools producing news for the public along the lines of a "teaching hospital" model of professional education.
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Gary, what is the likely impact of all this going to be on a bloke like me who rarely buys a newspaper and instead gets most of his info from books, Radio National, some TV docos and even the news occasionally, the occasional specialist magazines /journals but most frequently from blogs like this [ta very muchly for that],LP, Crikey [without subscribing] Overland, Pharyngula, Deltoid and other blogs often chasing links within them around the place?
Similarly for those of the general public who, in the future,may buy a newspaper, watch TV at night and so on?
What does it mean for us?
Am we going to be less informed as opposed to mis or dis informed, or not?