First, the state of the industry today:
- A seemingly never-ending cascade of layoffs and restructuring, especially at older publishers which used to enjoy monopoly or oligopoly status.
- An inability on the part of publishers and advertisers to find an online business model that works. News Corp. CEO Rupert Murdoch has some bizarre concepts about the way the online news ecosystem should operate, but when it comes to online advertising he is right on target: "There is an almost infinite increase in inventory for websites and for display," he noted earlier this year. This results in a great deal of "downward pressure" on CPMs.
- A broken system of journalism education: Too many students with unrealistic expectations, too many programs that are preparing too many people for careers that don't exist (this fall, 49 percent of students in the Columbia journalism masters program are in the print track), and too many teachers with impeccable 20th-century credentials but little online media experience.
- Widespread unwillingness in sales and editorial departments to let go of old ways of doing things and experiment with/expand new initiatives.
But these services can't replace quality reporting and investigations. It's simply too expensive for current online business models to support. In the short to medium term, I see an opportunity for local and national television news websites to pick some of the slack -- they have far more robust advertising-based revenue streams than newspapers and magazines, and some broadcast outlets (at least in Boston) have proven to be avid users of new technology and shown a willingness to experiment with ways in which online and video content can be integrated. They are taking some important steps toward reinventing themselves online, and that's a good thing.
Long-term, however, broadcasters' rich revenue model will fade, as advertisers move away from expensive 30-second video clips and demand more interactivity and engagement from their campaigns. What will replace it? That's the billion-dollar question that publishers are trying to figure out. Until they do, many sectors of the news industry will continue to downsize and disintegrate, as fast-moving broadcasters and technology-driven upstarts pick up some of the pieces.
Sources and research: Twitter, WFXT Facebook page and website, WBZ website, New York Times website, TechCrunch, Fake Steve Jobs blog, IAB website, Poynter Online
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