BuzzMachine

Rupert Murdoch is making it a habit to give barnraising speeches about the explosion of media. He gave this now-legendary speech to American newspaper editors and he just gave another to the wonderfully named Worshipful Company of Stationers and Newspaper Makers:

Rupert Murdoch last night sounded the death knell for the era of the media baron, comparing today’s internet pioneers with explorers such as Christopher Columbus and John Cabot and hailing the arrival of a “second great age of discovery”….

“Power is moving away from the old elite in our industry - the editors, the chief executives and, let’s face it, the proprietors,” said Mr Murdoch, having flown into London from New York after celebrating his 75th birthday on Saturday.

Far from mourning its passing, he evangelised about a digital future that would put that power in the hands of those already launching a blog every second, sharing photos and music online and downloading television programmes on demand. “A new generation of media consumers has risen demanding content delivered when they want it, how they want it, and very much as they want it,” he said….

“It is difficult, indeed dangerous, to underestimate the huge changes this revolution will bring or the power of developing technologies to build and destroy - not just companies but whole countries.”

The owner of Fox News added: “Never has the flow of information and ideas, of hard news and reasoned comment, been more important. The force of our democratic beliefs is a key weapon in the war against religious fanaticism and the terrorism it breeds.” ….

“I believe we are at the dawn of a golden age of information - an empire of new knowledge.”

But he combined his new-found enthusiasm for the digital future with a “change or die” message for the monolithic media empires of the 20th century.

“Societies or companies that expect a glorious past to shield them from the forces of change driven by advancing technology will fail and fall,” he warned. “That applies as much to my own, the media industry, as to every other business on the planet.” …

: And here is one of Rupert’s hacks, the political editor if Sky News, extolling the wonders of technology and journalism.

Here’s a story behind the story of Friday’s CBS Evening News report on the state of the media (to see the video, go here and scroll down).

When the producer called, it’s clear they had an angle in mind: citizens’ journalism vs. professional journalism. They asked for stories in which I’d gone up against big media. I told him that’s not the story now. I said the real story is how, with citizens’ help, journalism can and must expand with new ways to gather and share news. I said I’d seen a change in the last year, with professional and amateur journalists coming closer together to this realization.

They came to do the interview and we talked about a lot of the stuff you read here, like this, and this. But they didn’t use that, apart from one line about news not being finished when we print it, which is actually a line about Dan Rather.

Then we changed the setting to shoot the b-roll, the stuff that makes the pros pros in old-style news. Diggnation doesn’t have no stinking b-roll.

We stood in a colleague’s office and, with my laptop in hand, they asked me what I wrote about. I listed a bunch of posts, including this one, where I take Ted Koppel and Aaron Brown to task and I said that.

That ended up in the finished piece: me v. the big guys, it seemed. That fit the story they wanted to do, the one they started with: citizens v. professionals.

And the correspondent asked whether I got mad at the big-media folks with whom I so recently worked. I mocked the question and gave him a look you can’t see as I said, no, I merely get disappointed sometimes.

That, too ended up in the finished piece. That, too, fit the story they wanted to do rather than the one they got from me.

Now, of course, this happens all the time. This is what sours sources on the news. It’s no surprise to me. It’s no big deal, either. I’ve seen the sausage made. But I’ll say what I said to that correspondent: It disappoints me. I don’t care if they used more or different quotes from me. But I care about getting a story that’s not as shallow as videotape.

But evening news is the shallowest of news: Give us 22 minutes and we can’t possibly give you the world. And so this made me wonder what the proper role of the evening news should be in a new media world. Now I know that some will argue that the evening news still has a huge audience, compared with other individual outlets, and so why rock that boat. But that audience is getting ever-smaller and ever-older and the news universe around it is only exploding.

So what to do? There was a time when I said that CBS News should be sold. The Murrowites would burn me at the stake, but I could also argue that we just don’t need three shallow evening newscasts and it’s OK to kill one. And I could argue that the evening news should be a summary of other news: The Week magazine as a daily TV show telling me what the rest of the world is saying.

But now that CBS and my long-lost colleague Larry Kramer have embarked on their “cable bypass” strategy to make the web the news channel they never had, I think the CBS Evening News should become value-added to the web: It summarizes and promotes and follows the bigger stories that are online. The evening news stories don’t need to be simplistic, obvious, confrontational, condescending; they can be smarter. But they do need to be shallow, for there’s only so much you can say in 2:30. Yet that becomes more forgivable when their reason to exist shifts to being a gateway to the news.

So take a story like the state of the media. They can still go do their interviews, but they can put those interviews online and let us see — and remix — them. They can pose their question about a story and give us the tools to help report that story. They can follow the story as it grows and improves online. And from a business perspective, they can drive people to the future: to online. If newspapers must do that, then so must TV. Yes, the revenue isn’t there yet, but the audience is and the revenue will catch up when advertisers do.

Or they can keep making simplistic stories like the one about the state of the media that inspired this post. The real story about the state of the media isn’t what CBS aired, but what it didn’t air: The story of how broadcast TV without the web and without the public’s help there will continue to be shallow and shrinking and outmoded. The irony is that CBS News’ story about the state of the media is the best illustration of the state of old media.

: LATER: Andrew Tyndall, who watches TV news for a living, takes me a bit to task in the comments and I reply.

The most quoted and quotable bit from Kurt Andersen’s interview with Time Inc. editor-in-chief John Huey:

Near the end of our breakfast, I ask about the Future of Magazines. “The big question in everyone’s mind [at Time Inc.],” he says, “is how much [of the present struggle] is cyclical and how much is secular.”

A lot is secular—that is, permanent. We would like to believe that Internet-versus-print is analogous to TV-versus-radio in the fifties: The new doesn’t necessarily wipe out the old. But I think paper media today are more like sailing ships around 1860—still dominant but enjoying their last hurrah. I think it’s late in the magazine era. “I hope not,” says Huey. “If I thought they were dead, I’d do something else.” My elegiac turn has made this funny, enthusiastic man a little morose. “And [Time is] something that most people in America want to see survive, even if they don’t know it.”

That’s like saying most people want me to be President, they just don’t know it. No, I’d say that Time is hardly a necessity of life.

Below, I promised to start making more tangible suggestions for remaking newspapers from papers into places. Here’s a start (they’ll all be tagged ‘newnews’):

The first job is to instill fear in the newsroom. Oh, there’s fear there now. But it is fear of the unknown. What we need is fear of the known: the facts about falling readership and advertising and the reasons behind both and about new competition. Fear alone won’t lead to a strategy, of course. But until there is an imperative to change inspired by that fear, it won’t be possible to move past the complacency and resistance that populate so many newsrooms now. In later posts, we’ll look at means to replace fear with excitement about new opportunities. But first things first.

So before doing any reorganizing, strategizing, or off-siting, the first thing I think a newspaper should do is report about the future of news. Assign your best reporters and editors — the Bejesus Task Force — to get all the prognostications about the future and all the data about the present — about where the audience and dollars are going, about new competition, about new technologies, about best and worst practices, about new definitions of news — and bring it together in a report for the entire staff. Make the assignment clear: Find the most frightening stuff you can. Now is the time to face every devil. Leave none unearthed.

This is for the entire staff. All of this is. If you do this just for management — or just editors, for that matter — it will not work. And it’s not just for the paper. You need to take that task-force report about the future of news and print it in the paper — and online, of course — and ask the people to tell you what to do. Know that you’ll be reaching only the people you reach now. But you’ll set a new tone in the relationship and will, I guarantee, get good ideas. So set up the means to capture those ideas: public forums, online and in person. Meet the readers.

Next, go talk to your former readers and never readers. OK, do some focus groups. But better yet, go out to folks you do not serve and meet them face-to-face, preferably over beer. Give managers and staffers strict instructions to listen, not talk. They may only ask questions, not argue and never lecture. Tell them to get answers to key questions, including how people define news today, where they go to get it, what their frustations are, what they really care about, why they don’t read newspapers, what they hate about papers, whether they trust us, what they know, what they can contribute.

Then you can bring in some prognosticators and bullshit artists (my current job description) to scare you, but judge what they say based on the reporting you’ve just done. Later, you can challenge them, as my editor friend challenged me, to get real. But now, treat them like horror-movie producers and ask them for their scariest stuff.

Now bring in your competitors: bloggers, podcasters, community organizers. Don’t kidnap and torture them. Ask them how and why they do what they do and what they need to do it better. Later, you’ll look for ways to work with them; in fact, that will be a key to any future strategy. But now, just look at all the ways they’re smarter and nimbler than you and how they’re having so much more fun. You need to know what you don’t know. Jay Rosen even suggests giving the staff a test — but he’s a tougher teacher than I will be.

Finally, have an open meeting about the numbers. Go ahead and show how profitable you are today. But show every bad number and every bad trend you don’t want your advertisers, shareholders, analysts, and bosses to see. If you don’t do this, it won’t work. You might as well call in the private equity firm and call it a day.

The idea is to make everyone in the organization understand the strategic imperative for change. If they think they can just sit back and do what they’ve done for years, then they won’t be doing it much longer. If they want to change, they will. The danger is that the smartest staffers will get so scared they will want to quit and blog for a living. That’s why there’s no time to spare getting to the next steps so you can hold onto them and harnass their iimaginations. More on that later….

There is a debate in the land of newspapering: Should print and online operate separately or together? Jay Rosen argues today that in the recent kerfuffle at The Washington Post, he sees benefit in separation. And you’d think I’d agree, since I set up separate operations when I was at Advance.net. But I don’t think I do, not anymore.

The commonly held wisdom — or rationalization — among those of us who took separate routes is that we needed to create autonomous operations so that the online staff could do what was appropriate for this new medium (like enabling interactivity) and so that the online brand and bottom line would not be shortchanged in ad deals as merely value added. And I think that was true.

But it is also true today that if newspapers themselves do not change radically to embrace the future, they will become things of the past. So I have argued that newspapers have a choice: Either totally upend newsroom culture and get people to face the strategic imperative of gathering and sharing news in new ways across all platforms … or move most of the staff to online — where the audience is now and revenue growth, if not equivalent revenue, will be — and leave the dinosaurs behind. But if you take the former course, if you take the challenge of exploding the newsroom, then you probably have to give those people control for all the products and hold them accountable for audience growth and satisfaction and for keeping up with all their new competitors, small and smaller. And if they can’t do it, then you get new people who can. Quoth Yelvington once more: “It’s time to change your people, or change your people.”

Jay argues persuasively that in l’affaire Froomkin, the ability of online monarch Jim Brady to make appropriate decisions for the dot-com apart from newsroom king Len Downie is productive:

They’re not equals (780 in one newsroom vs. 65 in the other; fewer than one million subscribers vs. eight million users), but Washington and Arlington have their own spheres. Over the newspaper and reporting beats Len Downie is king. Over the website Jim Brady is sovereign. Over the user’s experience no one has total control. There’s tension because there’s supposed to be tension. It makes for a more dynamic site.

Well, but it also makes for blinders aside the eyes of the newsroom princes. That is why Post political editor John Harris thought he could be so haughty as to publicly scold his online colleagues for not following his rules and for embarrassing him with his White House, even snaring the — what shall I say, unsuspecting? — ombudsman in his crusade.

No, Harris and company do not need to confront the online people. They need to confront the future. They need to confront the fact that more readers read the online product. They need to confront the fact that the economics of news are changing, whether they approve or not.

I once had an argument with an editor of People who wanted a redesign to do what technology at the time — and logic — could not do. He kept stomping his foot: If I want it, it must be so. Make it so! I kept explaining why it could not happen. Round and round it went until finally I snapped, “Jim, damnit, I’m not your enemy, reality is.”

The people in the Post print newsroom acted as if the online newsroom were their enemy. No. Reality is.

: So are The New York Times and USA Today right to combine newsrooms? Only if they blow up the newsrooms in the process and force every journalist at every desk to reinvent not only the product but also the process of news — and reinvent themselves as they do it. An organization chart is not the answer. An attitudectomy is.

When I visited with The Guardian’s management, I found an impressive cultural change already underway: The print folks and online folks together worried that they were behind,that the digital age was well underway and they were still trying to hop on. They didn’t try to alter reality. They wanted to get ahead of it.

That cultural change is what matters, not whether there are one or two newsrooms.

In fact, I’ll argue that there should be no newsroom. Now you may have thought that the reference to no newsrooms in the headline above was another smart-assed prediction of the fall of papers. Not at all. Instead, it’s a suggestion: Just as you should stop thinking of your product as paper, as a thing, so should you stop thinking of your operation as a room.

The old saw in designing space for a business is that you should give the sales department as little space as possible — or no space at all — because, after all, aren’t the sales people supposed to be out there, selling?

So shouldn’t the same be true for newsrooms: Give the reporters no space, have them live out of their laptops, so they are out there reporting? Now go the next step: What if some and soon much of the news doesn’t come from reporters — allowing the reporters to concentrate on what they do best, on their real value, reporting — but from the people we used to call readers? And what if the people help edit too (see: Digg)? What if there is no newsroom? Or rather, what if the newsroom is the community and the community is the newsroom.

OK, I just went to far. It’s what I do now: I push the point to make a point. At a recent breakfast with pr execs, a sage news exec — guess who — defended me at such a moment, saying it’s now my role to push the imperative and it’s still their job to get their jobs done. I was grateful for the defense, particularly from him.

But I also went to lunch last week with a print editor/friend I now like to call Fred Flintstone who challenged me back and said, ok, after resisting the Gospel according to Jetson, he was now ready to sign up and build a new future. But how? How, exactly? It’s fine to talk theory but what’s the reality?

He was right to push back and since I now spend so much time in this space with abstractions that will make fine book chapter titles but not blueprints — but since I also have faced the specific practical challenges of merging newsroom views if not newsrooms — then I need to get more practical: Mouth, meet money.

So I hope to start writing a series of posts with explicit suggestions for news organizations. Take them for what they’re worth. Oh, I’ll argue that there are actually lots of practical suggestions amidst the 9,009 posts that precede this one (yow, that guy can blather!). But I can see how the forest can get lost for the kudzu. So I’ll write some posts that are at least more direct. Starting shortly with suggestions about how to merge those newsrooms… but first, how to scare them….

When I said I wanted to see more transparency in newspapers, I didn’t mean that they should be sharing their family squabbles…. though I am glad they are, for it’s just so entertaining.

I’m already over the Froomkin kerfluffle but I’m amazed at the newsroom sniping that’s coming out in public. See Brad DeLong’s incredible phone interview with Washington Post political editor John Harris:

Q: So you knew [Ruffini] had been a Republican operative in 2004, and didn’t tell that to Jay Rosen?

A: [Ramble of which I caught only scattered phrases] But assuming you aren’t posting this at least immediately… A good relationship between the print Washington Post and WPNI… Happy to answer privately… Really don’t want to be quoted on the record… If you want to call me an idiot without my response, that’s fine…

A: No I want your response.

A; [stream continues] But I shouldn’t respond… I’ve promised people I won’t respond… We need to cool this down… It’s a really a very narrow issue: are there people confused about Froomkin’s role…

This is followed by the editor first going off the record and then refusing comment. Journalists should be the last people to do either.

: Now go to Ken Auletta’s New Yorker story about tsuris at the New York Times with some deft slipping of shivs between the shoulder blades of executive editors: Keller v. Raines v. Lelyveld. Most entertaining.

: Some are positioning l’affaire Froomkin as political: See Kos. Others are gamely trying to laugh it off as a turf war over a home page. See Aschenblog. Some see it as resistance to change: See Yelvington — “It’s time to change your people, or change your people.” I see it as that and as a war of journalistic worldviews about alleged objectivity vs. transparency.

But a wise editor I know said it better in an email: “The elbows are getting very very sharp right now.” And the reason is that the business is shrinking and the print guys and online guys — forced together in newsroom meetings and mergers — are like dogs growling and snapping over that last scrap of meat. When the going gets tough the tough get snarky.

In the panic over the possible sale of Knight Ridder’s papers, some are grasping for new business models that aren’t business models at all: They are suggesting that newspapers should be taken over by charities or — this is new to me — even viewed as public infrastructure. I understand the nervousness and the need to seek alternatives — especially in the face of news that the dreaded Carlyle Group may be a buyer. Welcome to The Philadelphia Daily Fair & Balanced.

The Daily News’ Attytood blog has been lighting candles, crossing fingers, and blogging incantations in hopes that the local Pew Charitable Trust might take over the paper, following the example of the Poynter Institute’s benevolent ownership of the St. Petersburg Times. White Knights, indeed.

If that happened, it would be a fine thing for Philadelphia. But it is by no means the solution for the problems of newspapers today. Indeed, I think it is a dangerous dream, for it continues to separate newspapers from their publics, their markets, their real masters.

: Now see Editor & Publisher, which gives us what I think is a naive view of how to save papers: Turn them into charities, with legislation to give tax breaks, even.

Joe Mathewson, who, amazingly, teaches business journalism, dismisses those of us who argue that the marketplace matters.

But does “healthy” have to mean “profitable”?

Let’s dream for a moment about newspapering freed from the profit motive. Purists may argue that newspapers, like any other enterprise, should have to earn their way in the marketplace, and if they fail the market test, so be it.

But in fact newspapers, as important to the civic health of our society as public transportation, have a claim on public allegiance that goes beyond financial measure.

Newspapers as infrastructure? That’s a new one to me. We’ve seen them portrayed as everything up to religion. But newspapers as roads and buses? Sorry. I don’t buy it. News comes in many forms, in many media, and there is no law of nature or principle of democracy that says a paper is public infrastructure that should have public support. In fact, I’ll argue that is another dangerous dream, for it potentially puts journalism and free speech at the mercy of government support and thus government control, which should be the last thing we’d ever want.

Mathewson wants legislation to make it happen:

There are two tax-favored models before us: public broadcasting and real estate investment trusts. Some rather simple tax legislation would be required, available solely to newspapers, not to broadcasters or to companies that own both — which incidentally would free these papers to cover the federal government without fear of jeopardizing their corporations’ interests at the Federal Communications Commission. Such special legislation wouldn’t be novel, for Congress long ago recognized the importance of healthy newspapers when it authorized joint operating agreements as an exception to the antitrust laws.

A newspaper company, like a public broadcaster, could be organized as a not-for-profit, tax-exempt corporation. It could still sell papers and advertising, it could still develop new Internet revenues, it would still pay market wages and salaries (or maybe better), it could re-invest in improving its own staff and facilities and operations, it just couldn’t make a profit. And it wouldn’t pay taxes or dividends….

But if the owner is an otherwise-profitable company, a deductible gift might do more for the bottom line than a fire sale. Congress could encourage such donations by allowing the company to deduct the full value of the newspaper as a charitable contribution, creating a special exception to the current ceiling on corporate gift deductibility, which is 10% of taxable income.

Another possible transition from for-profit to not-for-profit might be a buyout and donation by civic-minded wealthy individuals or families, the same folks who give millions to build a new library or a new hospital wing…. Facilitating this, too, would require an amendment to the tax law, to waive for this purpose the 50-percent-of-adjusted-income ceiling for personal tax deductions — just as Congress did for 2005 contributions to Katrina relief, and all other 2005 charitable gifts.

Law enforcement might help in this. When Larry Ellison of Oracle was charged by the state of California with a securities-trading violation, he settled by agreeing to donate $100 million to charity. That would have been enough to buy a good-sized newspaper and donate it to a not-for-profit, maybe even endow it.

Mind you, these are still businesses with considerable margins, albeit margins that will be sure to shrink. And there are plenty of other means of providing news: online, radio, TV, magazines.

And I’ll fret again that newspapers are in the pickle they’re in because they have operated as isolated monopolies. Make them isolated charities or publicly supported utilities and you’ll have disasters.

: Note that the Carlyle Group is, at the same time, looking to buy a hunk of Dunkin Donuts. They’re just cash cows.

: Note also that Knight Ridder’s paper in Akron is running out of pencils. Maybe they should find a few and try selling them on streetcorners. New revenue streams.

I believe that newspapers are and should be businesses, that market pressure is not only good but necessary, for newspapers are all about serving the public and if the public doesn’t want them, well, does that tell you something? The problem is that newspapers became monopolies, which made them fat, sassy, snotty, and lazy. See this very good post by a technologist turned VC who worked at the embattled Knight Ridder about newspapers as mainframes:

The short-form story in the modern history of computing is the deconstruction of the mainframe. Nothing in computing exists today that did not exist in some precursor form back in the original mainframes. The evolution of computing is the continuous unbundling of each of the components, cost reduction and miniaturization, and subsequent empowerment of the user at the point of delivery. Newspapers are Mainframes. The transformational power of the Internet lies in its incessant pressure to unbundle….

The business model of the newspaper is based on two principles – network effects and bundling.

The network effect is the classifieds business. The reason there is only one major newspaper per city, nearly everywhere, is that the classifieds business is a winner-take-all business. This made newspapers ‘natural monopolies.’ The net effect of the natural monopoly was that the competitive pressure for innovation disappeared. How many industries can you name where the product form, features, and delivery has not changed in 75 years? The marketing gene was largely bred out of the industry by becoming local monopolies. Monopolies fail catastrophically because of their inability to respond when the competitive landscape changes dramatically. This is the incumbent’s disadvantage. The very immunity to competition that made newspapers such great businesses also created resistance to market forces.

The bundling is the aggregation of all the varied content to attract and retain the audience. The core premise is you’ll read some content regularly, not necessarily all content….

But the Internet is that ruthless and incessant force for unbundling. Everything is a click away. Search costs are crushed.

Newspapers are Internet victims, but they are far from being the only industry under siege. Newspapers are especially impacted because two of the three main components of their cost structure are obsoleted. Advertising sales moves from traditional ‘push’ to advertiser self-service. All the physical assets of printing and delivery are obsoleted by the shared infrastructure of the Internet. If most of the cost structure goes to zero value, what’s left are news gathering and editing organizations and IT.

I like that: A newspaper is an IBM 360. A blog is an Apple 2. Go read the rest. Then see the post above about people trying to see newspapers as something other than businesses.

Rebecca MacKinnon says that journalism schools need to teach students to be more entrepreneurial. I agree that that’s why I added an entrepreneurial course that I will teach to the curriculum of CUNY’s Graduate School of Journalism (you won’t find it online; it’s new).

The idea is that students need to create a new journalistic product. These could be businesses the students start when they graduate (and because they may have the next Google in mind, this will be the one course I won’t webcast) or a product they could start in an existing media company (because they are all woefully short on R&D) or even a charitable endeavor (but even in this case, they need to show why people would give money to make it work).

Says Rebecca:

American journalism is in crisis. What a wonderful opportunity we now have to rethink the whole industry. The question is: Even if journalism schools do train the future’s journalists to innovate and think outside the box, will today’s news organizations be prepared or willing to take advantage of their fresh ideas?

I find it pleasantly ironic that while some in journalism wish it weren’t a business, others want to train journalists to be better at business. Count me in the second camp and see my other posts on the topic today.

Brian Horey, general partner of Aurelian Partners, does a good job defending Knight Ridder’s investors in emails to Dan Gillmor.