Of digital riptides and original sin — was the decline of newspapers inevitable?

At the Brainstorm tech conference on Wednesday, several media-industry heavyweights talked about a video project they did for Harvard University in which they interviewed leaders in the industry about the rise of digital and the decline of newspapers as a force in the media business, and also gave some of their own thoughts about whether media companies could have avoided what they called a “digital riptide” that sucked the business under.
Their answer was no — because the upheaval was too widespread to resist, and the disruption of their business model too financially painful. But is their analysis correct? Yes and no.
The three directors of the project, which was put together for Harvard’s Kennedy School of Government, are former Time Inc. editor-in-chief John Huey, former New York Times editor of digital Martin Nisenholtz and Paul Sagan, executive chairman of Akamai Technologies. They interviewed about 60 media insiders about the digital disruption that turned their industry on its head. And their conclusion? As Sharon Waxman of The Wrap put it in her summary of their Brainstorm panel discussion: “Advertising went away and there’s nothing newspapers could have done about it.”

Is the innovator’s dilemma an excuse?

Nisenholtz, the man who launched the original New York Times website and later acquired About.com for $410 million (and was instrumental in the rise of RSS), said that all of the media executives who were interviewed came to a similar conclusion, and many mentioned Harvard business guru Clay Christensen’s “innovator’s dilemma,” which describes how incumbents in an industry typically fail to make the changes that are necessary to their survival. As Nisenholtz put it:

“What was common to every interview was the notion of the innovator’s dilemma. Is the Internet sustaining innovation?… Or is it fundamentally disruptive? Does it kill the business model? In the case of journalism, for journalism it was sustaining. But for the advertising it was disruptive. The oxygen got taken out of the financial model.”

Is this a fair description of what happened to the newspaper industry over the past decade? It’s fair in the sense that advertising has been undergoing its own fundamental disruption. As Clay Shirky has described, the old days of simply buying and selling ads based on some kind of geographically-based monopoly on information — something newspapers used to have going for them — are no more. And advertisers have also gone in search of targeted audiences and measurable impact, something newspapers have never been much good at, but digital outlets and social networks promise to provide.
At the same time, however, this explanation feels a bit too simplistic, as well as fatalistic — not to mention convenient, in the sense that it absolves any of those who were running media businesses over the past decade (including Nisenholtz and Huey) of any responsibility for having failed to see the disruption coming, or having neglected to take whatever steps they could to adapt more rapidly. In effect, it says: “We couldn’t help it! Advertising disappeared. It’s not our fault.”

There were things that could have been done

Was there anything newspaper companies could have done? Sure there is. How about not just shovelling print material online for half a decade or so with no links and no recognition that the internet even exists? That might have been a start. Or how about trying a little harder to figure out how the flow of information was changing, and how the democratization of distribution that the web and social networks provide could be used to their advantage, instead of feared and belittled? To Nisenholtz’s credit, About.com was a smart move in that direction — too bad it was one of the only ones.
Christensen’s principle does say that incumbents routinely fail to make the changes that are required even when they see the necessity to do so, usually because they fail to understand — or refuse to understand — how the disruption they see changes the nature of their business (a classic example being the train industry not seeing itself as being in the transportation business, and missing the disruptive effect of trucking). But it’s not like these changes are an act of God that can’t be adapted to.

The so-called “original sin” wasn’t

One thing the Fortune panel got right was to debunk the idea that not charging for content was some kind of “original sin,” to use a phrase coined by Walter Isaacson of Time, who says he was seduced by Madison Avenue advertising executives with bags of money who wanted to see more pageviews, “and that was the beginning of the end of journalism.” Sagan said that charging for content wouldn’t have worked for most in the early days of the web, and Nisenholtz noted that the web has actually been a great boon for journalism — just not for traditional media businesses like the newspaper industry.
The title of the project Nisenholtz, Huey and Sagan are involved in (which will be released in full online in September) is Digital Riptide, a name that compares the disruption of the newspaper business to an undertow that can’t be resisted. “The strongest swimmer in the world can get caught up in a riptide,” Huey said. I think a better metaphor would be a tsunami — which provides evidence of its arrival, at least for those who are paying attention, and is survivable if those caught up in it take the appropriate steps.
That’s not to say if newspaper companies had tried harder to adapt that they wouldn’t still have suffered painful financial turmoil, since there are systemic costs and structures associated with print that the newspaper business has to somehow deal with, just as the steel industry and the automotive industry have. But to imply that it was something that no one had any control over and couldn’t possibly have done anything about misunderstands the nature of what happened.
Post and thumbnail images courtesy of Flickr users Zarko Drincic and Scott Beale