Reality Check for News: Guilt Trips Aren’t a Business Model

There’s no shortage of bad news out there for traditional media outlets. Continued circulation declines and advertising revenue shortfalls are producing a widening financial chasm that even paywall revenue for leading brands like The New York Times (s nyt) can’t hope to bridge. Do we need another litany of the ways in which media is changing and how traditional publishers are doomed? Regardless, media consultant and author Jeff Jarvis has come up with a breakdown of what he calls “hard economic lessons for news,” and it makes for somewhat gloomy reading. That said, however, there are some glimmers of hope amid the despair.

“Doing Good” Doesn’t Pay

Jarvis sets out to disabuse existing media players of some of the myths and rationalizations they have for why people should pay them for their content. For example, he says:

“Should” is not a business model. You can say that people “should” pay for your product but they will only if they find value in it.

and later adds:

Virtue is not a business model. Just because you do good does not mean you deserve to be paid for it.

At the risk of putting words in Jarvis’s mouth, this sounds very much like some of the reasons The New York Times and other newspapers (such as Rupert Murdoch’s Times of London (s nws)) have given for implementing pay walls around their content. Their argument is that they provide a valuable public service, and therefore people should pay for it — not because they want to, but because it’s the right thing to do.

As Jarvis notes, neither of these arguments — which both rely, to a degree, on making people feel guilty — is going to create a valid business model for news. Even if New York Times Executive Editor Bill Keller would like people to feel bad about reading aggregated snippets of its stories at The Huffington Post (s aol), that doesn’t mean that they are going to do so.

So what about nonprofit or other models? These aren’t going to work for most outlets, says Jarvis:

  • Begging is not a business model. It’s lazy to think that foundations and contributions can solve news’ problems. There isn’t enough money there.
  • There is no free lunch. Government money comes with strings.
  • No one cares what you spent. Arguing that news costs a lot is irrelevant to the market.

That’s not all. Jarvis goes on to detail all the “reality checks” newspapers and other publishers need to grapple with as they search for ways to survive. By the end of the list, any self-respecting newspaper publisher or editor could be forgiven for wanting to simply turn out the lights and shut down the presses.

Think — and Act — Local

So where are the rays of hope? Local ad sales is one, says Jarvis: Newspapers could become the broker between advertisers on a community level who aren’t taking advantage of the web, and services such as Groupon (although Jarvis doesn’t specifically mention them), Google Place (s goog) pages and Facebook deals. This is one reason why I, and others, have wondered why it took so long for newspapers to try to compete with Groupon by appealing to advertisers who want to reach readers in new ways. Jarvis also mentions there is “growth to be found in networks,” although it’s not clear how that would help finance the news. (To be fair, Jarvis says his post is a work in progress.)

Jarvis could be criticized for adding to the litany of despair in the media industry, but his list is the culmination of several years’ worth of work trying to come up with new business models for the news industry — both as a consultant and advisor to newspapers such as Canada’s Postmedia and as a professor at the City University of New York’s Graduate School of Journalism. Jarvis helped coordinate a New Business Models for News summit in Aspen, Colo. in 2009, and followed that up with presentations on some of the models that were featured at the summit, including one embedded below.


Jeff Jarvis on New Business Models for News 2009 from CUNY Grad School of Journalism on Vimeo.

In a nutshell, Jarvis proposes that new business models can emerge when existing players reduce their costs through outsourcing (and crowdsourcing), focus on the value they can add instead of just reporting what has already been reported — which he calls “do what you do best and link to the rest” — and use social media and related services such as Twitter and Facebook to create a distributed news network. (For more of his thoughts, check out this Slideshare presentation from 2008.) Many of his ideas are already being put to the test by the Journal-Register Co., which CEO John Paton has turned into a “digital first” news organization, as I described in a recent post.

Post and thumbnail photos courtesy of Flickr user George Kelly