The Consolidation of Journalism

The Internet killed the newspaper without really replacing it.

Talking Points Memo founder Josh Marshall surveys the demise of local newspapers and the failure of most online outlets in an Atlantic essay titled “Scale Was the God That Failed.” His premise is that the former lost the advantages of monopoly power and the latter simply lacked a sustainable business model. Or, as the search optimization headline of the online version puts it, “The Digital News Industry Was Built on Lies.”

What happened to newpapers is well documented but a reminder is useful:

For several decades in the latter half of the 20th century, most American cities and towns had a single newspaper. Even many of us who were alive then find it difficult now to comprehend just how geographically isolated information and news were at the time. If you lived in Southern California in the 1970s or ’80s, for example, and wanted to stay abreast of the news in all its dimensions, you had little choice but to subscribe to the Los Angeles Times. Some cities and towns had two papers, but the same basic model operated almost everywhere in the United States. That gave these publications a de facto monopoly on commercial speech in their region.

[…]

The internet destroyed those local monopolies in the late ’90s, and most papers have never recovered. Suddenly, readers in Omaha, Nebraska, had countless news sources to choose from, and advertisers had limitless options as well. Inertia carried some publications forward for a time; things took a few years to shake out. But the crucial point is that almost all of the elements of good, newspaper journalism—big newsrooms paying middle-class salaries and giving reporters the time to get the story right—were made possible by those monopolies. Without them, there would have been no 20th-century newspapers as many of us knew them.

It’s worth noting, though, that most of those newspapers were simply terrible. Once one got below the level of say, the Birmingham News, local newspapers were mostly staffed with rather poor writers and the system was such that good writers at small papers worked their way up to the big time. Because I moved around a lot, I subscribed to a lot of local papers and, often, to a second paper from the nearest bigger-city market. (Even in, say, 2000, it was really expensive to get the New York Times or even the Atlanta Journal-Constitution in Troy, Alabama.)

Still, the fact of the matter was that even bad local papers had reporters covering local news, keeping at least some eye on city hall, the school board, and the rest. That’s mostly gone now outside the big cities.

The failure of online to make it work is longer and excerpting doesn’t do it justice.

The super-low costs of entry and the lack of geographic limitations that were key to the explosive growth of digital journalism were also key to its undoing. These new publications had no way to recreate the profitability and stability that the old regional monopolies had made possible.

[…]

The chronic oversupply of publications chasing a fixed number of ad dollars has required publishers to continually charge less for ads that demand more of readers. For the biggest players, which scaled up quickly to dominate digital media, there was—at first—enough money to go around. But most digital publications were funded on the premise that scale would eventually lead to dominance and stability, much as it had with technology firms. News publishing, however, doesn’t work that way.

Marshall explains why in some detail but the short version is that Facebook and Google managed to hoover up most of the ad money and venture capitalists finally figured out that there was no pot of gold at the end of the rainbow and thus quit backing online venues that were never going to make enough money to pay their staff and keep the lights on. Which is to say, damn near all of them.

Not all publications are doomed. A few big, metro newspapers have evolved into national outlets, blending ad dollars with increased subscription revenues. They have reporting resources that are difficult to match and serve a broad audience. Successful D.C.-centric political publications operate in a unique advertising market, tapping into corporate America’s lobbying budget, and they’ll continue to thrive. Other publications, such as The Atlantic, are operating sustainably in various niches of their own, leveraging a unique vision or approach to the news and the reader loyalty this earns to produce subscription revenues. Outlets with no subscription revenue are a rarity in publishing history.

The problem is that it’s very hard to get people to pay for something they’re used to getting for free. I’m willing to pay for the New York Times, the Washington Post, and the Atlantic, which are go-to outlets for me, so long as the price is reasonable. But I’ll either find workarounds or simply avoid the LA Times, Boston Globe, Bloomberg, and others that have very tight paywalls around content that I don’t have to have. I’m enough of a news junkie that I’d be willing to pay more than I do now for a bundled package that included unlimited access to everything but it just makes no sense to subscribe to outlets where I’d want to read maybe 5-10 stories a month.

Ultimately, Marshall is sanguine about the whole thing:

All of this is to say that news publishing is a tough business. It requires finding an unserved niche, providing some unique service, and building a durable relationship with a specific customer base. But that’s really no different from most forms of commerce: doable, but hard; potentially profitable, but usually not wildly so. In digital publishing, scale was the god that failed. And thousands of journalists went along for the roller-coaster ride, without anyone warning them how it was bound to end.

What has happened in the digital journalism space is something that was next to impossible to achieve twenty or thirty years ago: building individual brands. Before then, with the exception of a handful of news anchors and columnists, nobody knew who journalists were. So, a Matt Yglesias, Ezra Klein, or Glenn Greenwald can easily take their readers with them to new outlets or, indeed, charge readers directly for their work.

A century or so ago, the creation of mass media meant that a handful of superstar actors and musicians could get fabulously wealthy selling to a national or even international audience, while leading to a radically decreased demand for local actors and musicians. The same has happened with journalism: the very best papers, magazines, and journalists are richer than ever. But there’s much less demand for middle-grade talent and none at all for those who would have made a decent living at not-very-good local papers a quarter-century ago.

Still, while the consolidation and destruction may well continue, it’s hard to argue that we’re worse off overall. I’m less informed about local news than I was twenty years ago and that’s not great. But I have a near-inexhaustible supply of great national and international news and analysis at my fingertips wherever I go. And the supply of niche content in pretty much any area that one may find interesting has simply exploded. If the tradeoff for that is the demise of lousy newspapers and employment opportunities for untalented reporters, it’s almost surely worth it.

FILED UNDER: Economics and Business
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. MarkedMan says:

    I think there is still one piece of the puzzle missing: The ability to click through to an article and discover a paywall that consists of a one time charge, preferably small, to access that specific article. You shouldn’t need to do more than click “Yes” or “No”. Like you, I’m not going to subscribe to the LA Times because, say, Kevin Drum occasionally links to it. But I would have no problem paying 50 cents to read a specific article.

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  2. SKI says:

    As a subscriber to TPM, I’ve watched Josh lay out this case for several years. It is very compelling.

    A possible future is that news organizations are organized, not around localities but interests. TPM is one example but another recent example of in interest-based brand building (what looks to be) a sustainable model is The Athletic. They went around and scooped up some of the best sports journalists and local team reporters across the globe, consolidated them into one subscription and let them do their thing.

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  3. Sleeping Dog says:

    With hard news, there are multiple sites that are reporting and if you have used up your free peeks at say the WaPo, you can read about an incident from another source. Analysis and opinion are different, but my view opinion holds little value, making sources like the Atlantic valuable.

    @MarkedMan:

    There have been trials of ‘pay per article’ and they haven’t worked out. Probably because Facebook and Google have subverted the idea, by providing the typical user with just enough info on an article that need to pay for it goes away.

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  4. James Joyner says:

    @SKI: The Athletic is quite good and a site that I find worth paying for. But it took a long time for them to get there–they really had to built up a lot of content and the stable of writers.

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  5. Jay L Gischer says:

    Lemme blue-sky a bit. The music industry has long had performance-rights organizations, such as ASCAP and BMI. The practical way these worked is musicians registered songs/recordings with one of these. Meanwhile, radio station all paid dues and kept records of what songs they played. ASCAP/BMI divvied up the dues according to what songs were popular. So radio stations could play anything, and musicians got paid. Not as much as for concert tours or recording contracts, I think. But they got paid. This happens with Spotify now. I’m not sure whether the PROs are involved there.

    The point is that we could see something like that with online media. A monthly fee gave you access to all members, and they got paid according to visits. Which avoids the whole “micro payment” irritation. But people want to silo and control the user, I guess.

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  6. James Joyner says:

    @Jay L Gischer: Yes, some sort of bundling like that is the obvious solution. There have been some modest attempts at that over the years but nothing has yet succeeded.

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  7. Sleeping Dog says:

    @Jay L Gischer:

    Since individual readers aren’t radio stations or venues, the ASCAP/BMI model doesn’t quite fit, micro payments don’t work, in large part because the card companies don’t want to process those small transactions. What would work is an entity that sold tokens, that could be redeemed for content. The website could set price of an article in tokens and the reader could determine value. The minimum investment for the reader could $25 for X tokens.

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  8. MarkedMan says:

    @Sleeping Dog: The few “Pay Per Article” schemes I’ve run across were clunky and impractical. It required creating a user ID and password and then giving credit card info to a site. The PPA I’ve envisioning would be similar to Apple Pay: I enroll with a third party, and when I go to say, the LA Times and an article is behind the paywall I would get the writer’s name, a brief synopsis, the length of the article and two choices if I want to see the whole thing: Log in as a subscriber, or click this button to use ArticlePay to pay 5o cents (or whatever) to read the entire thing. Once I click that button it puts up a confirmation message and when I confirm it takes me to the article.

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  9. SKI says:

    @James Joyner: A long time? It didn’t launch until 2016 and didn’t really expand until late 2017/2018. It hit 1,000,0000 subscribers in 2020 – which Bloomberg had stated in 2019 was the tipping point for sustainability.

    How is less than 5 years to go from non-existent to sustainable a long time for a company? that strikes me as a fairly short pathway tbh.

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  10. The whole issue with paywalls for news sites is similar to what’s happening in entertainment generally and television specifically.

    If you want to “cut the cord” but still want access to entertainment and sports you have to consider subscribing to a wide variety of streaming services such as Netflix, Hulu, Amazon Prime Video, Disney Plus, CBS All Access, Paramount Plus, and probably at least a half dozen others that I’m forgetting right now. In addition you still have to pay for Internet access. I haven’t done the math but depending on your circumstances you could end up paying more than you are to the cable company.

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  11. James Joyner says:

    @SKI: Five years is a long time for a web-based business; most go under well before then. Regardless, it was four-plus years of articles that I wasn’t paying for because they hadn’t reached critical mass to be worth the subscription price.

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  12. James Joyner says:

    @Doug Mataconis:

    I haven’t done the math but depending on your circumstances you could end up paying more than you are to the cable company.

    Especially if, as is the case for me, the cable company is your only viable path to broadband access required for streaming. (I suppose I could use my iPhone as a hotspot but it’s not really practical for streaming movies and the like.

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  13. @James Joyner:

    Additionally depending on your cellular provider, your data access is likely to be slower than Internet access from the cable company. Also. Most cellular providers have policies that say that you only get their highest speed data access for a certain amount of data use. After that they throttle your data speed significantly to the point where streaming is virtually impossible.

    Verizon’s “unlimited” plan throttles your data after you pass 30 gigabytes. You can buy additional gigabytes but that cost adds up if you keep ordering it.

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  14. SKI says:

    @James Joyner:

    Five years is a long time for a web-based business; most go under well before then.

    Not VC-backed businesses. The Athletic, founded by two guys from a web-based fitness app, got more than $90 Million in VC funding.

    There is a difference in scale, scope and trajectory. Most businesses, of any stripe, fail. Of those that do succeed, most don’t hit break even for 2-3 years and longer isn’t uncommon if they are well-backed and going for a big win. Amazon famously took more than a decade. Twitter took 5 years. Peleton hit profitability during the pandemic in 2020 but had been targeting 2023 beforehand. They were founded in 2012.

    Regardless, it was four-plus years of articles that I wasn’t paying for because they hadn’t reached critical mass to be worth the subscription price.

    I subscribed in August 2018. At that point, they already blew away everyone else in terms of substantive sports coverage in the USA. You may not have been aware of the coverage or looked into it but I can assure you that the barrier at that point wasn’t not having critical mass (unless you were into motor sports).

    By August 2019, less than 3 years in, they were around 600,000 subscribers. A year later they hit 1,000,000 and sustainability – while expanding dramatically into England and international soccer.

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  15. James Joyner says:

    @SKI: They did a good job of capitalizing on all the layoffs, even at places like ESPN. I mostly read football coverage and am mainly interested in the Cowboys and Crimson Tide, both of which already get pretty extensive coverage from “free” outlets. I finally got around to signing up for the free trial last May when there were enough articles I wanted to read and couldn’t.

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  16. Andy says:

    I “subscribe” to the Colorado Sun, which is journalist-owned nonprofit. Their model seems to work similarly to how public radio and broadcasting operate, with corporate sponsors and individual memberships. I don’t know if it’s sustainable, but they do a lot of great work covering the state.

    For local news our old-school newspaper just isn’t very good and still acts very much like a dinosaur paper. We subscribed for a while, but it wasn’t worth it.

    If there was a Spotify version for news I would pay for that, assuming the pricing wasn’t terrible. But music is very different from news and I’m not sure if that model would work.

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  17. keef says:

    Dishonest journalists killed journalism in general. This sort of stuff is par for the course:

    https://hotair.com/archives/allahpundit/2021/04/05/60-minutes-ashamed-dem-palm-beach-county-mayor-says-cbs-smeared-ron-desantis-publix-segment/

    Haven’t been here in awhile but I see Doug Mataconis. Hope he is well.

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  18. Ken_L says:

    Social media has developed as an important source of news. I belong to several groups, as a result of which I now get news of local events more or less instantly. Reading posts from locals stopped from driving to X because of local flooding is obviously much more useful than reading about it in tomorrow’s newspaper. As are fragments of information about a crooked councillor, spread without a care for defamation laws.

    The internet has also removed delays and filters from countless news sources that once upon a time arrived late and partial in a hard copy newspaper. This means I can do anything from looking at the rain radar and checking the weather forecast issued a few minutes earlier, to keeping track of the scores in golf, tennis or cricket matches in real time. And of course if a news report in one site seems implausible, I can cross-check it against any number of alternative sources.

    I miss the daily ritual of ‘sitting down to read the newspaper’, especially at the weekend when it occupied most of the morning along with brunch. But life moves on. The arc of the information universe is long, but it bends toward enlightenment, to coin a phrase.

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  19. HelloWorld! says:

    I know a blogger in Washington, DC who started a blog 15 years ago because the Washington Post and other papers had zero local news. He has retired from his job to run his blog that he makes $330K a year running. He also has staff now. This blog is solely focused on DC neighborhoods. It is funded by ads. Why the big papers can’t come up with a model that has national news and good local coverage is a mystery to me. Papers are failing because they are lazy and not interested in innovation.

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  20. James Joyner says:

    @HelloWorld!: First, it’s simply untrue that WaPo doesn’t have local news. Plus there’s WTOP and other outlets. Second, I’m highly skeptical that a blogger is filling her hole and taking in $330,000 in profits by doing so.

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