News faces and a new frontier

On Oct. 1, 2014, the New York Times announced that it was eliminating about 100 newsroom jobs—about 7.5 percent of its newsroom staff—first through buyouts and then, if necessary, through layoffs. The move marked the fourth cut in its traditional newsroom operation since 2008, for a total of 330 jobs in six years. At the same time, the Times reminded its employees that it continues to hire new staff who have the talent and experience to help drive its digital strategy.

The move came five months after the abrupt ouster of executive editor Jill Abramson and the unauthorized release of the Times’ internal Innovation Report, an assessment of its impact and competitive edge in a rapidly changing news ecosystem. That report—described by the Nieman Lab as “one of the key documents of this media age“—provided an intimate analysis of the Times’ growing struggle to maintain its competitive edge and market share. Widely available online, the report reads as an anxious but insightful primer of the current state of the American journalism landscape and proposes a new set of strategies, structures and skill sets its writers assert are essential to a competitive news organization in the digital age.

The Times report is an apt place to begin a discussion of the state of the news and information industry at the beginning of 2015. As the Times downsizes its print-centric newsroom to make way for the hiring of digital players who can lead radical change, it sets forth for the industry (and the institutions of higher education that serve it) the premise that digital-first journalism is more than bolting digital practices onto a traditional system. “The newsroom of the future is not the current one dragged into it,” John Paton, the CEO of a local newspaper chain now called Digital First Media, told the Times. “It is going to be re-built from the ground up.”

Media buzz in 2013 and 2014 suggested that such rebuilding is underway. Headlines about the exodus of celebrity journalists to digital startups funded by venture capital and philanthropy helped create an impression of a sea change in the way journalism is being practiced and paid for in today’s marketplace. Though the data don’t support that conclusion, there has been little doubt for more than a decade that the advertising model that traditionally supported an industrial-age news-and-information system is evaporating.¹

While much remains the same in the legacy world of American news media, an emergent sense that transformational change is upon us is widely reflected across the communities of practice associated with journalism and its future. The 2014 annual report of the Pew Center on the State of the News Media speaks with caution but clarity about the evolution of “digital first” practices redefining the news-and-information ecosystem. The Nieman Lab’s daily tracking of all things journalism reflects an optimistic embrace of the potential of the transparent, data-driven, and inclusive collection, curation, production and distribution of information for the public good—in short, of digital journalism. The Tow Center for Digital Journalism at Columbia University, under the direction of media innovator Emily Bell, has in the past three years produced reports that serve both as road maps to the future of postindustrial and data-based journalism and as the historical record of the passing of a journalistic era. And writers and reporters of all types, perspectives, audiences and competencies across the Internet have weighed in—some on a daily basis—about the transformations of journalistic practice in a digital age. Examples include the Huffington Post’s collection of posts on the subject; the future journalism project (thefjp.org) on Tumblr; the Creators Project as it relates to immersive storytelling and journalism; and Knight Foundation’s blog.

Former Harvard president Lawrence Summers in January 2012 described the radical disruptions occurring in the higher education marketplace and cautioned those who eschewed predictions of a revolution in the works: “A good rule of thumb for many things in life,” Summers opined, “holds that things take longer to happen than you think they will, and then happen faster than you thought they could. “Fifteen years after the launch of the Online News Association—the first professional organization of American journalists grappling with the implications of digital technology in their profession and practice—legacy journalism may have finally reached its tipping point.

This report is not intended to duplicate the currently available research on the status of the news industry. Think tanks, universities and nonprofit media organizations have published dozens of substantive, comprehensive reports that bring to bear great resources and research expertise sufficient to answer the questions of any interested reader. I have drawn on that work to provide a succinct but intentional overview in order to contextualize this project’s discussion of the future of journalism education: What should journalism schools be and do in order to prepare graduates to contribute to the ecosystem of news and information in 2025? Educators have much to learn from the conclusions and insights of the profession as it struggles to prioritize and reengineer its policies and practices to become more nimble, more competitive, more audience-centered … in other words, to become digital first.

The State of the News Media: A Summary

The Pew Research Center’s annual report on the State of the News Media is the most complete capture available of trends in the production, distribution and revenue of the American news-and-information industry across media platforms. Published each year since 2003, the report provides analysts a longitudinal, data-driven view of the ways in which print, television, radio/audio and online media have shape-shifted in the past decade. These data effectively challenge commonly held assumptions about consumer access to and use of varying types of media. Key findings in 2014 include:

• People are watching television news, especially in the morning: Network news viewership was up 2.3 percent in 2013 over 2012, and morning news viewership was up 6.7 percent over 2014.
• Newspapers are reporting minor increases in circulation, but that’s a reflection of changes in how they are now allowed to count circulation to include distribution of Sunday circulars to nonsubscribers.
• People are still not buying news magazines at the newsstand. Sales were down 2 percent in 2013, and a total of 43 percent since 2008.
• Americans are listening to online radio, even while driving (up from 17 percent in 2012 to 21 percent in 2013), and satellite radio was up from 23.9 million to 25.6 million, over the same period.

Pew reports six major trends, many of them good news for the industry:

• Digital news organizations like Vice, BuzzFeed, Quartz, and the Huffington Post are investing in international bureaus, the first increase in global coverage since legacy newsrooms cut their international staffing by 24 percent between 2003 and 2010.
• While digital-native news startups haven’t developed new models of revenue production, they have pioneered creative and effective new approaches to reporting and building audiences.
• Mobile devices exponentially expand the universe of citizen reporters and audiences, many of whom contribute to and “bump into” news on social media sites.
• Video is playing an increasing role in the presentation of online news, but YouTube and Facebook are already major players in the space; YouTube alone garners 20 percent of video ad revenues.
• Local television experienced massive consolidation in 2013, with sales driven by significant increases in the retransmission fees that cable companies must now pay to local broadcasters for re-airing their content.
• Increasing audience diversity—particular among Hispanics—will drive the creation of more diverse news operations.²

In sum, television remains powerful, print publications are declining even as their online versions grow, Americans are still listening to the radio online in their cars, digital startups are introducing new strategies and increased globalization to the media landscape, and audiences are bumping into—rather than seeking out—the news on social media and specialized sites like YouTube and Facebook. That’s not all you need to know about the news-and-information ecosystem in 2015, but it’s a pretty good basis for understanding why things are changing—and why they are not.

Where Most of the Money Still Comes From

Whatever the trends, it’s indisputably true that the traditional business model for general news remains the only viable business model to date. More than two-thirds of the $63 billion in domestic news revenues generated in 2013 were still derived from advertising, and legacy media remained the largest recipients of those advertising dollars. Daily newspaper advertising (print and online) generated about $25.2 billion in revenue in 2012, while about $12.8 billion went to national and local television (a consequence in part of sharp increases in political advertising).

That’s not to suggest that the status quo is sustainable. Newspapers used to get 85 percent of their revenue from advertising, and the decline continues. The Newspaper Association of America reported in 2014 that newspaper revenue dropped an additional 6.5 percent in 2013, to $23.57 billion, with print advertising declining by 8.6 percent. Mark Perry, a blogger at the American Enterprise Institute, reported that print ad revenue had dropped to its lowest levels since 1950, when the NAA began tracking industry data and the U.S. population was less than half its current size. “The dramatic decline in newspaper ad revenues since 2000 has to be one of the most significant and profound Schumpeterian gales of creative destruction in the last decade, maybe in a generation,” Perry wrote.³

At the same time, the NAA reported that the number of online newspaper readers jumped 18 percent between August 2013 and 2014, that 80 percent of U.S. adults online in August visited a news site, and that mobile users now exceed computer users among overall unique visitors. But online traffic, ads and subscriptions aren’t replacing print revenue. “The problem isn’t simply that growing digital ad dollars can’t replace disappearing print money fast enough; it’s that digital ad revenue is barely growing at all,” concluded Slate’s business correspondent Jordan Weissmann.

Market Disruptions: Bigger than the Sum of their Parts

None of this is breaking news; the trends have been apparent for more than a decade. What wasn’t so widely apparent in the interim is that legacy answers to revolutionary questions would not suffice. Clay Shirky’s 2009 blog post—an aeon ago in Internet time—summarized succinctly the ideological divide between those who recognized the revolution and those who did not or could not. Viewed in the context of the current rush to embrace “digital first,” it was prescient in fundamental ways:

Revolutions create a curious inversion of perception. In ordinary times, people who do no more than describe the world around them are seen as pragmatists, while those who imagine fabulous alternative futures are viewed as radicals. The last couple of decades haven’t been ordinary, however. Inside the papers, the pragmatists were the ones simply looking out the window and noticing that the real world increasingly resembled the unthinkable scenario. These people were treated as if they were barking mad. Meanwhile the people spinning visions of popular walled gardens and enthusiastic micropayment adoption, visions unsupported by reality, were regarded not as charlatans but saviors.

When reality is labeled unthinkable, it creates a kind of sickness in an industry. Leadership becomes faith-based, while employees who have the temerity to suggest that what seems to be happening is in fact happening are herded into Innovation Departments, where they can be ignored en bloc. This shunting aside of the realists in favor of the fabulists has different effects on different industries at different times. One of the effects on the newspapers is that many of their most passionate defenders are unable, even now, to plan for a world in which the industry they knew is visibly going away.

Viewed as revolution, the contemporary chaos of the news industry is at least understandable. Viewed through a disruptive innovation lens, however, the authors of the Times Innovation report argue that the current state of the domestic news industry can be viewed as a classic archetype of Harvard Business School professor Clayton Christensen’s model of from-the-margins market disruption.

Christensen’s model asserts that new competitors typically come into a market by using technology to provide cheaper and lower-quality options to consumers. Incumbents acquiesce the “undesirable” portion of the market to the disruptors, who use it as a foundation upon which to build new products and enhance quality, eventually encroaching on incumbents’ market share. Textbook examples of market disruption include Kodak’s response to digital photography, Detroit’s response to Japanese car manufacturers, and higher education’s failure to recognize the market threat of for-profits, such as Phoenix and Capella universities.

In 2013, market disrupters like BuzzFeed, Huffington Post, Vox, First Look Media, Circa, Flipboard, Medium and Quartz represented a measly 1 percent of total investments in the news industry.

But their aggressive incursion into legacy media’s market share, driven by a clearer understanding of the digital news environment and its consumers, has prompted even the industry’s standard bearers to stop and take notice. Pew reported in 2014, for example, that news sites native to the Web saw audience figures competitive with those of major traditional news organizations: between April and June 2013, Huffington Post (founded in 2005) reported 45 million monthly unique visitors, BuzzFeed (founded in 2006 but actively engaged in news only since 2012) reported 17 million monthly unique visitors, and The Washington Post (founded in 1877) reported 19 million monthly unique visitors. The numbers for all have increased substantially since 2013, but the point is still the same: Digital natives are contenders.

According to Pew’s revenue report:

These companies are digital natives. They understand technology and succeeded there first, offering other kinds of content before moving into news. In addition, they are free of the costly infrastructure of legacy platforms like print and broadcast television, and can potentially allow for some failure and loss during experimentation. What is not known yet is the style and quality of journalism this revenue will produce.

A handful of celebrity journalists are betting their careers on the new model’s sustainability and commitment to quality. The departure of high-brand reporters Nate Silver, Glenn Greenwald and Ezra Klein and editors Jim Roberts and Bill Keller from major legacy newsrooms to all-digital startups—widely and woefully reported by the very media organizations they were leaving behind—triggered a ripple effect across the industry, creating a zeitgeist of optimism that genuine change had arrived to transform a moribund profession.

Here again, the data don’t support the conclusion. Through interviews and email outreach, Pew’s 2014 study reports that an estimated 500 digital news organizations have created an estimated 5,000 new jobs in recent years—hardly a sea change in light of the 16,200 newspaper newsroom jobs lost between 2003 and 2013 (and more since), and the remaining 38,000 daily newspaper journalism jobs in 2013 still being funded by legacy companies.

What the departures do show, however, is that digital natives unfettered by the operating assumptions (or organizational expenses) of a legacy press have entered a marketplace that is now open to disruption. As the economic model for media shifts to one defined by individual access to production and consumer content creation, competitive startups may be more closely attuned to the practices and power of audience building; aggregation; user-, crowd-, and machine-created content; and the powerful synergies between talent pools on both sides of the traditional editorial/advertising divide. As C.W. Anderson, Emily Bell and Clay Shirky conclude:

If you wanted to sum up the past decade of the news ecosystem in a single phrase, it might be this: Everybody suddenly got a lot more freedom. The newsmakers, the advertisers, the startups, and, especially, the people formerly known as the audience have all been given new freedom to communicate, narrowly and broadly, outside the old strictures of the broadcast and publishing models. The past 15 years have seen an explosion of new tools and techniques, and, more importantly, new assumptions and expectations, and these changes have wrecked the old clarity.

Many of the changes talked about in the last decade as part of the future landscape of journalism have already taken place; much of journalism’s imagined future is now its lived-in present. (As William Gibson noted long ago, “The future is already here. It’s just unevenly distributed.”)⁴

Across that uneven landscape are a wide variety of emergent strategies for producing and distributing new kinds of information, at least some of it produced for and by systems. “Automation of process and content is the most under-explored territory for reducing costs of journalism and improving editorial output,” asserts the Anderson, Bell and Shirky report.⁵

Companies such as Automated Insights, Narrative Science and Palantir are developing and refining algorithms already capable of automating the production of basic journalistic narratives out of raw data. This kind of “robo-journalism” has been greeted with derision and anxiety by the journalism profession and its associated members in the academy, but it is nonetheless an inevitable and highly efficient new player in the media landscape of 2015.

Data Journalism

Stories automated out of data are not far removed from stories as data. Since Grace Hopper used a primitive mainframe computer to predict the result of the 1952 presidential election, journalists have used computers to process data to inform their reporting. The emergence and evolution of computer-assisted reporting in the early days of the Internet morphed into what is now commonly called data journalism, a far more sophisticated process of data collection, organization, visualization and publication/distribution that at its best allows readers to interact with data in ways individualized to their own interests and experience. “At their best, news applications don’t just tell a story, they tell your story, personalizing the data to the user,” says Alexander Howard of the Tow Center.⁶

In his comprehensive report on the history, status and future of data journalism, Howard concludes that the ability to access, process and publish complex data in useful and transparent ways is already a core skill for digital journalists:

As more and more people access the Internet and consume media on mobile devices, adopting a data-centric approach to collecting and publishing journalism will only grow in importance. The need to flexibly deliver content to multiple platforms and formats means that applications’ programming interfaces that can supply data to any platform will continue to be a smart investment for organizations, particularly if they seek to be digital first.⁷

That transformation will present new challenges in maintaining the integrity, security and accuracy of the data upon which stories are constructed; those new challenges will, in turn, demand that working journalists develop and exhibit greater expertise and depth of understanding in the social sciences, statistics and data analytics. “This is not a new idea, given how deeply Philip Meyer’s ‘precision journalism’ is grounded in applying social science to investigative reporting,” Howard says, “but everyone who wishes to practice and publish sound data journalism is going to need to understand it.”⁸

As new tools emerge to simplify data processing and visualization, journalistic expertise and understanding about how to ethically, accurately and transparently interrogate and present data stories will be of ever more pressing importance.

The State of American Journalism: Summing Up

The news-and-information ecosystem in 2015 is awash in new forms and types of news and information, produced by professionals who make their living as journalists; by amateurs and crowds leveraging the availability of capture and publication tools and platforms to collect and distribute content; and by systems designed to hold, process and deliver information in multiple formats, upon command or according to schedule, and without human intervention. All three communities of practice are evolving in parallel, shaped by rapid iteration, assimilation and adaptation—and without the underpinnings of a tested or widely replicable business model.

While the advertising-and-subscription model that long sustained traditional news organizations continues to evaporate, legacy news organizations have yet to develop sufficient alternative revenue streams. A recent trend-defying revival in the fortunes of local and national television stations (through increased retransmission fees and increases in political advertising) may have prompted some unrealistic hope that similar revenues could find their way to newspapers, but no such windfall has been forthcoming. And ever-increasing competitive pressures are pushing news organizations to create a digital-first culture that contests or disregards many of their traditions, boundaries and operating assumptions.

The nature of digital business is well understood by Mark Andreessen, the coauthor of Mosaic, one of the first widely used Internet browsers, co-founder of Netscape, and co-founder of VC firm Andreessen Horowitz, whose portfolio reads like a “Who’s Who” of successful Internet startups. In February 2014, Andreessen wrote a blog post about the future of the news business, a missive that began with an extraordinary statement of exuberant optimism: “I am more bullish about the future of the news industry over the next 20 years than almost anyone I know.”⁹

He went on to describe an industry ripe for disruption, growth and reinvention, one in which traditional business models had become obsolete but market demand would drive growth:

Right now everyone is obsessed with slumping prices, but ultimately, the most important dynamic is No. 3—increasing volume. Here’s why: Market size equals destiny. The big opportunity for the news industry in the next five to 10 years is to increase its market size 100x AND drop prices 10X. Become larger and much more important in the process.¹⁰

Successful news organizations will need to seek out diversified revenue streams and expanded business models, including conferences and events, crowdfunding and micropayments. And it will take new kinds of leadership to instigate radical change, one that privileges vision, scrappiness, experimentation, adaptability, focus, deferral of gratification and an entrepreneurial mindset.

Bloggers and pundits had a field day with Andreessen’s optimistic view, but what they didn’t recognize or acknowledge is perhaps the best advice I’ve seen or heard throughout this project to journalists who believe in the value and importance of what they do and why it matters:

All of this requires abandoning the past, something that admittedly is very hard but necessary to move forward. Today’s news organizations are spending 90% of their effort and resources on playing defense. They are protecting the old artifacts and business model, rather than going on the offense and making the future. Even newspapers and other media outlets that are just now making it across the digital chasm would be much better off today if leadership had shifted resources and focus harder and sooner. Without a strong offense, and a view forward rather than back, a bad result is inevitable in the long run.¹¹

Sound advice to any organization, but particularly relevant, perhaps, to those entrusted with the training and education not of yesterday’s journalists, but of tomorrow’s.

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