Digital Journalism

The Economics The Economics of Digital Journalism: of Digital Journalism:

What Happens When What Happens When Traditional Newspapers Traditional Newspapers

Go Out of Business in 2039?Go Out of Business in 2039?

W. R. Neuman

Digital Journalism

The Digital Dozen

Twelve issues we had better get right if independent, high-quality, professional journalism is to thrive in digital era.

Digital Journalism

1) A clear-eyed assessment of the history of journalism

Were it left to me to decide whether we should have a government without newspapers or newspapers without a government, I should not hesitate a moment to prefer the latter

Never pick a fight with people who buy ink by the barrel

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The Romanticized History

Digital Journalism

The Romanticized History

Digital Journalism

The Romanticized History

Digital Journalism

The Romanticized History

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2) A shift from a posture of defense to reinvention

Worth defending? SureLikely to be a successful strategy? Not in the long run

Digital Journalism

David Lazarus San Francisco Chornicle 3/14/07

I'll come right out and say it: It's time for newspapers to stop giving away the store. We as an industry need to start charging for -- or at the very least controlling -- use of our products online.

Digital Journalism

David Lazarus San Francisco Chornicle 3/14/07

My thinking is that this is approaching a life-or-death struggle for newspapers, and an antitrust exemption may be the only way that the industry can smoothly make the transition to a digital future.

Put simply, we need to charge a fair price for our products, and we need to do so together.

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3)The happy accident of newspaper economics

Production Technical

Medium

Audience

Advertising$ $

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3)The happy accident of newspaper economics

Percent Advertising EconomicsBooks 0%Movies 0%Magazines 50%Newspapers 70%Radio and TV 100%

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3)The happy accident of newspaper economics

Newspaper Industry Profits25.2%

Magazines 4.5%

Books 5.5%

Agriculture, Mining, Mfg ~5.0%

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3)The less happy accident of newspaper economics

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1935 1945 1955 1965 1975 1985 1995 2005

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3)The happy accident of newspaper economics

McClatchy Co. CEO Gary Pruitt April 2006All those skittish investors who think

newspapers are a dying industry are, in fact, dead wrong.

Far from shrinking, our audiences are growing steadily. Simply put, more people want our products today than wanted them yesterday.

Digital Journalism

4) The ideal of media diversity

Based on concept of local media market

Rethinking diversity – the paradox of critical media scholarship

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5)The Sunstein thesis

The ‘Daily Me’ IconBehavioral studies contradict the

Sunstein thesis

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6) The long tail thesis

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7) Ogilvy’s dirty little secret

The relationship between investment in advertising and increased sales is stunningly weak, and conditioned on a complex of environmental factors

Digital Journalism

8) Amateur hour: blogs and wikis

Don’t vilify the amateursLearn from themTake a lesson from Jimmy WalesAnd from Google

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9) Meyer’s thesis

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10) The false hope of the ‘online newspaper’

The economics just don’t workShoveling newspaper content over to a

web site and charging admission is a non-starter

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11) Transcending the trinity

Norms of professional journalismWall Street’s ROIAcademic research on media effects

Digital Journalism

11) Transcending the trinity

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12) A viable economic model for sustained high-quality journalism

The new model?“ ‘Sup?” queryPersonalizedReliableBrandedGoogle model

Digital Journalism

Digital Journalism

The Magic, All-KnowingAnswer Machine

Commercial 31%Reference 26%Popular Culture, Sports 11%Social 10%Sexual, Erotic 9%Health 7%Government and politics 3% News and current events 2%

Digital Journalism

Amit Singhal Google Ranking Algorithm Czar

You Need To Know WhatThis Man Knows

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Transaction-Based Business Model

User-Created Content Pull Rather Than Push Context Sensitive Search Personalized Search

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The Bottom Line

The future of news is the search engine Not the newspaperAnd not the evening network newscast