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April 04 2013

16:58

Jeff Israely: Don’t you call me subsidized — people are paying for news

free-cc

Editor’s Note: Jeff Israely, a former Time magazine foreign correspondent in Europe, has launched a news startup called Worldcrunch. For the past three years, he’s been describing and commenting on the process here at Nieman Lab. Read his past installments here.

Three years ago, when I was taking my first baby steps from reporter to would-be newsbiz guy, the idea of making people pay for journalism online was all but dead and buried. Various experiments had failed over the years — freemium, premium, micropayments? Nada. Even as digital ad rates were already beginning to plummet, “free” was it: what the readers wanted, what the writers wanted, and even reputedly what the information itself wanted to be. News companies big and small were left to figure out how to develop their businesses accordingly.

Alongside this reality was an idea taking root that, truth be told, no one had ever really paid for news. Even back in the pre-Internet days, news had always been paid by someone else than the person actually consuming it. Whether advertisers, public funding sources, the draw of popular crossword puzzles and movie listings, or maybe just a truckload of cash from a billionaire — there was always someone or something else footing the bill for the poor slugs on the city hall beat or the over-fed foreign bureau.

News, we were told, has always been subsidized. Yes, that was (and still is) the word, the meme, the received wisdom and proverbial final nail for anyone who was still dreaming that paid models can give new life to news online.

With the help of his students and readers, NYU journalism professor and new media sage Jay Rosen compiled a running list of all the sources of news subsidies. This wasn’t just about whether or not some big news brand should or shouldn’t put up a paywall — the fact that news had always been “subsidized” was fundamental to understanding our work and our industry as we moved deeper into a disaggregated digital world of information production and consumption. Each individual piece of content could no longer rest on its laurels or flaunt its importance — the emperor was naked and the sports columnists and classifieds weren’t gonna be picking up the tab any longer.

I understood the point, I told myself, but was still puzzled by the argument — maybe even slightly offended by the word choice. After 18 years of earning what I thought had been honest paychecks, I was now being told I’d been “subsidized” all along. Hmmm…doesn’t sound so good. Like something Mitt Romney would say about welfare mothers.

But still new to the future-of-news debate, who was I to question? Looking around, virtually nobody was paying (or charging) for digital news, the old print model was dying, foreign bureaus were shuttering…and well, Jay Rosen was a pretty smart dude.

So, quietly, I accepted this foundational new media fact…embraced the meme. One late night I even sent in my own contribution to the running online list of subsidies, pointing out how a journalist about to launch a news startup might be subsidized by his wife’s good job in the public sector.

Though that last part was true, turns out the rest was not. The irony is that we needed to see people coughing up hard cash for digital content to remind ourselves that we have in fact been paying for news all along. Of course, we pay for other stuff, and every reader has his own mix of reasons for being there — but if there were no news, there’d be no there there — and ultimately, nothing to sell.

Whatever else it may offer, from wherever else the revenue may flow, The Dallas Morning News cannot exist — cannot be sold to readers or advertisers — if it doesn’t provide News about Dallas each Morning. You may declare that you “love Mario’s Place for the cannoli, but you wouldn’t go there if they didn’t also have good pasta and a nice wine list. It’s dinner, in a restaurant — not a pastry shop.

None of this is to minimize the scale of change in how we produce and distribute and consume news, or the challenge for the Dallas Morning News to reinvent both the menu and economics of the restaurant. But from where I sit in Paris, reliable daily (and hourly!) meals are still its best hope.

As always, it’s both more and less than a question of paywall or no paywall. Anyone charging for news must understand how to maximize the free digital circulation of information. BuzzFeed is not investing in top-shelf journalists because it wants to subsidize anything. Even Google, in the deal it recently struck with the French government to set up a fund for established news brands, acknowledges the value of professional journalistic enterprises. Of course, some might call that a subsidy, just as others in the newspaper industry have long accused Google of being subsidized by the news business. But both sides in this fight lose the forest for the trees.

More useful is to focus on the information ecosystem, a buzzword of its own from three years ago that I still think about all the time. Lots of people arrive at The Dallas Morning News or The New York Times or our little global startup thanks to Google. And though a relatively small portion of Google’s overall business, the traffic that comes from people who went online looking for news and journalism has the kind of value that you can neither measure, nor create any other way. Even such operations as the news services of Thomson-Reuters and Bloomberg, which in pure numbers are most surely fed (subsidized!) by the financial services arms of the parent companies, are nevertheless so “baked into” and integral to the overall operation that it is difficult to separate out the precise source of value for the brand and its various products.

And yet, even with the initial modest success of online subscriptions, the “news must always be subsidized” concept keeps popping up in influential places from smart people, often cited as the starting point for understanding where the industry is going. David Carr even used it recently to make the case for a paid model. Again, I think I know what he’s saying — but subsidy is not what we should call it. It’s the wrong word, an insidious word and a false premise. It’s also a recipe for defeat.

For those who think there’s something to be preserved in the professional production of journalism, who are betting on the evolution not annihilation of the news industry, there are some recent signs for cautious optimism. That people are paying directly for news is not just a welcome new revenue stream, but a confirmation that there is real hard value in our industry’s core product. It is by no means the end-all solution — but perhaps a new starting point.

Okay, enough pontificating — back to my day job: PLOTTING!

This post is meant to be the last in a three-part mini series on how a digital news startup addresses some of the big either-or choices. We’ve gone through B2B vs. B2C and quantity vs. quality. Here, it’s paid vs. free — and as you may have guessed, the answer for us is a resounding both!

Even after we knew we would be implementing a payment system, we never stopped obsessing over how to best live in the free space — how to make our stuff circulate, how to give it away. Needless to say, it is a learning experience…and a moving target. It’s hard to imagine a day when this won’t be amongst our top two or three priorities as a company. The open Internet is here to stay, and it will be the axis for most of the marketing and circulation, customer relations — not to mention the place where much of the actual journalistic production will happen.

There may be a few models out there — like the French current affairs site Mediapart — where a pure all-or-nothing offer can work. But right now, at least, it looks like you pass up too many opportunities in the free space when the wall is tall and thick.

Like much bigger players, we have opted for a metered model, which allows you to be both a free and paid site at the same time and to adjust the dial as you see fit. Powered by Tinypass (the same folk bringing Andrew Sullivan across the paid-for threshold), we have just recently launched our version.

Of course, a young startup’s approach to paid content will necessarily be different than both what Sullivan and the large news organizations are doing. They’re all busy calculating how many of their loyal, longtime readers will commit to a subscription. We’re still very much at the beginning of introducing ourselves to the world. Thus the meter can work for us to let people discover our product, and build our subscription base in step with a growth in overall audience. To launch, we have turned our meter on at 15 stories a month. Needless to say, we’ll monitor it closely.

But perhaps more interesting for us in the short term is that a paid system can help support other revenue streams beyond the direct paying individual. It’s useful for us as we begin a B2B business with the New York Times Syndicate. There is also the potential, as demonstrated by the Financial Times, of selling bundled access directly to institutions. Hopefully, the general news sector won’t fall into the same old trap of saying only the economic press can explore these kinds of paid content opportunities!

Walls worked in the past, and they’re showing signs of working now. They used to be fixed and impermeable and even occasionally monopolistic; now they’re retractable and porous — and forced to compete, compete, compete. Not only does The New York Times allow for 10 articles a month, it also can lift the wall when a hurricane strikes. One can imagine The Washington Post already asking itself if they will do something similar for the mid-term elections. (Side note: in these cases, news outlets usually present the temporary lifting of its paywall as a public service. Of course, it’s fundamentally a business decision — both in the immediate traffic surges, and in the long-term loyalty earned by presenting it as a public service. Ours is an industry full of wicked contradictions!)

Just as important as the cash, the walls also help rebuild lasting relationships with the readers who pay to be on the inside. If I’ve paid for something, if I’ve committed to it, I will use it more — and value it more. And that will make me more valuable as a customer. (This is why “subsidy” is also the wrong word for advertising.)

Ultimately, the real long play of paid-content strategies is that they may actually help change people’s news consumption habits. Together with lean-back tablet devices and a more general information fatigue, paywalls might help swing the pendulum back to both fewer clicks and fewer sources in a daily news diet.

Or maybe not! Part will depend on how the information is produced, filtered and distributed; can newspapers transform themselves into news portals? Will the Nate Silver free-agent “hosting” model expand? Will different sources be bundled together, à la cable TV? It will also depend on how the Facebook generation changes or doesn’t change once they have careers, kids, and homes of their own — not to mention what the Facebook/Google/Apples of the world themselves have in store for us.

It may seem like a contradiction, but a news organization must know how to simultaneously do all it can to keep people’s attention locked on its wares, while also being equipped to move in the open Internet’s constant comings and goings. For the kind of startup we are, there’s an extra potential in finding new network effects amongst both big and small outlets: It’s the ecosystem, baby! In the meantime, we’ll do our best each day to keep turning out fresh plates of pasta — and some cannoli too.

Photo by Bradley Stabler used under a Creative Commons license.

September 20 2010

14:00

L.A. Times’ controversial teacher database attracted traffic and got funding from a nontraditional source

Not so long ago, a hefty investigative series from the Los Angeles Times might have lived its life in print, starting on a Monday and culminating with abig package in the Sunday paper. But the web creates the potential for long-from and in-depth work to not just live on online, but but do so in a more useful way than a print-only story could. That’s certainly the case for the Times’ “Grading the Teachers,” a series based on the “value-added” performance of individual teachers and schools. On the Times’ site, users can review the value-added scores of 6,000 3rd- through 5th-grade teachers — by name — in the Los Angeles Unified School District as well as individual schools. The decision to run names of individual teachers and their performance was controversial.

The Times calculated the value-added scores from the 2002-2003 school year through 2008-2009 using standardized test data provided by the school district. The paper hired a researcher from RAND Corp. to run the analysis, though RAND was not involved. From there, in-house data expert and long-time reporter Doug Smith figured out how to present the information in a way that was usable for reporters and understandable to readers.

As might be expected, the interactive database has been a big traffic draw. Smith said that since the database went live, more than 150,000 unique visitors have checked it out. Some 50,000 went right away and now the Times is seeing about 4,000 users per day. And those users are engaged. So far the project has generated about 1.4 million page views — which means a typical user is clicking on more than 9 pages. That’s sticky content: Parents want to compare their child’s teacher to the others in that grade, their school against the neighbor’s. (I checked out my elementary school alma mater, which boasts a score of, well, average.)

To try to be fair to teachers, the Times gave their subjects a chance to review the data on their page and respond before publication. But that’s not easy when you’re dealing with thousands of subjects, in a school district where email addresses aren’t standardized. An early story in the series directed interested teachers to a web page where they were asked to prove their identity with a birth date and a district email address to get their data early. About 2,000 teachers did before the data went public. Another 300 submitted responses or comments on their pages.

“We moderate comments,” Smith said. “We didn’t have any problems. Most of them were immediately posteable. The level of discourse remained pretty high.”

All in all, it’s one of those great journalism moments at the intersection of important news and reader interest. But that doesn’t make it profitable. Even with the impressive pageviews, the story was costly from the start and required serious resource investment on the part of the Times.

To help cushion the blow, the newspaper accepted a grant from the Hechinger Report, the education nonprofit news organization based at Columbia’s Teachers College. [Disclosure: Lab director Joshua Benton sits on Hechinger's advisory board.] But aside from doing its own independent reporting, Hechinger also works with established news organizations to produce education stories for their own outlets. In the case of the Times, it was a $15,000 grant to help get the difficult data analysis work done.

I spoke with Richard Lee Colvin, editor of the Hechinger Report, about his decision to make the grant. Before Hechinger, Colvin covered education at the Times for seven years, and he was interested in helping the newspaper work with a professional statistician to score the 6,000 teachers using the “value-added” metric that was the basis for the series.

“[The L.A. Times] understood that was not something they had the capacity to do internally,” Colvin said. “They had already had conversations with this researcher, but they needed financial support to finish the project.” (Colvin wanted to be clear that he was not involved in the decision to run individual names of teachers on the Times’ site, just in analzying the testing data.) In exchange for the grant, the L.A. Times allowed Hechinger to use some of its content and gave them access to the data analysis, which Colvin says could have future uses.

At The Hechinger Report, Colvin is experimenting with how it can best carry out their mission of supporting in-depth education coverage — producing content for the Hechinger website, placing its articles with partner news organizations, or direct subsidies as in the L.A. Times series. They’re currently sponsoring a portion of the salary of a blogger at the nonprofit MinnPost whose beat includes education. “We’re very flexible in the ways we’re working with different organizations,” Colvin said. But, to clarify, he said, “we’re not a grant-making organization.”

As for the L.A. Times’ database, will the Times continue to update it every year? Smith says the district has not yet handed over the 2009-10 school year data, which isn’t a good sign for the Times. The district is battling with the union over whether to use value-added measurements in teacher evaluations, which could make it more difficult for the paper to get its hands on the data. “If we get it, we’ll release it,” Smith said.

March 24 2010

16:00

Michael Freund of Der Standard on the state of Austrian media, point of view, and government subsidies

It’s hard to imagine, but in other parts of the world, the newspaper industry isn’t in quite the same tailspin we see in America. One reason many European outlets have faired better than those in the U.S. during the age of the Internet, and now an economic crisis, is a business model less dependent on advertising. European newspapers charge higher newsstand and subscription rates and readers embrace a long-standing tradition of supporting their media through direct government subsidies.

While I was in Austria last week attending the Milton Wolf Seminar on NGOs and the future of news, I spoke with Michael Freund, a writer and editor at Der Standard, a major Austrian daily, about the state of the country’s media and how readers think about government subsidy of the news. Freund explained that while there are some legitimate questions about independence, in general, Austrians believe that news should be protected from completely commercial interests. It’s a different mindset.

The question of whether the U.S. government should bailout the newspaper industry has been controversial. The idea, at first, feels like it runs against a basic tenant of independence (even though the U.S. media has long enjoyed indirect, but significant subsidies that buoyed the industry for years). As the media landscape worsens, it’s a question that will certainly linger.

A transcript of the video is below.

Michael Freund: Hi, my name is Michael Freund, or Michael, I’m head of the Media Department at Webster University, Vienna and I’m also editor and writer at the Viennese daily paper Der Standard, where I write about culture and the arts and occasional book reviews.

I was asked to say a few words about the Austrian media industry and what it’s like — whether its dying or not, so let me try. Let me start by saying that Austria is, as you probably know, a small country in the center of Europe. It’s a Western country — it has had a Western-style press, electronic and print press, since World War II with a couple notable differences from what you know, possibly, in America.

For one thing, the television, the radio, the electronic media, the broadcasting has been not state-controlled, but state-sponsored and state-instituted — and still is, but it had been a monopoly, until, I don’t know exactly, about ten years ago. Until it became untenable because the other media transpired through the borders: Private TV came through cable, it came thru the air, it came through satellite, so it was not really a feasible position to assume Austria had only one broadcasting company, which it had until about the ’80s, until through the other channels that I said, the media came through.

The other interesting thing is that Austria has had, for many decades, a very strong partyline press — meaning there were newspapers that belonged to or were literally owned by or influenced by political parties, official organs of those parties, and they all vanished. As daily papers, they don’t exist anymore, as weeklies they don’t exist anymore, and instead, you might say a commercially oriented print media scene has taken place — which, of course is not without its own pressures and interests, both commercial and political.

Laura McGann: Do those newspapers — do they have a point of view that were adopted from the politically sponsored publications of the past or would you consider them more independent?

Freund: I wouldn’t say they were adopted, or direct successors. But, of course they have a point of view. You cannot not have a point of view. Everybody has a point of view, including all publishers and editors. So, yes, there are some media that are considered more liberal, others are considered more conservative. Some lean toward the Social Democrats, others toward Christian Democrats or the Green Party — yeah, right wing press as well, you have those. So there are pressures, there are leanings, but they are not officially affiliated or tied to parties.

McGann: Has that helped — or could you talk about how print media has faired in the rise of the Internet in Austria?

Freund: It has fared not so well, like in most other countries. I should say for one thing, it was the first one in any of the German-language countries, meaning Austria, Germany, and Switzerland, to go online, and it was in the mid ’90s. I think it was ‘95. And it has had since then, a fairly strong, predominant effect — Internet presence. As far as I know it’s making money, but not a whole lot of money, and that’s true for many other publications. Newspapers, as far as I know, as much as in the States, have not found a way to really monetize the Internet in a totally profitable manner. So, yes they break even, but they may even make money with the banner ads or their cheap operations, or they associate with others to save costs. But, people are looking for ways to find — trying to find the solution to break even, not to lose on both the print and electronic side. As a matter of fact, in a few weeks, the iPad will be commercially introduced in the U.S., not yet in Austria, and there is hope that with a intelligent model that iTunes provided for the music scene, there may be some way to get people to pay moderately for content they really want, meaning from sources they trust, rather than just some blogs or individual sources where you don’t really know where the stuff comes from and its not fact-checked and it’s not edited. I think people who are interested in reading something at the level of, say, The New York Times might be willing to pay for it. So far they haven’t, but things may change.

McGann: What is the attitude among the media-consuming public in Austria toward government subsidies for the media?

Freund: Well, for one thing, Austrian Radio Television, the one called ORF, the Austrian publicly sponsorsed electronic media, is state-sponsored and people have accepted it as a fact because it’s always been like that. It doesn’t mean it’s unchangeable, but by and large, Austrians, as many other Europeans, see some sense in making sure that certain media don’t die or don’t fall completely into the hands of extremists who are purely commercially interested people. So, the BBC, for example, has for many decades a state-subsidized, state-sponsored institution — and it is an institution. It’s not a coincidence that some of the best American programming makes use of BBC stuff, including National Public Radio, including PBS, their TV shows, their radio news, those things. They come from something which, unfortunately, to a lot of Americans smells like socialism or something horrible and worse, communism, you know, but it’s just a way to make sure a certain plurality — not plurality, but quality, of fact-finding, of accurate reporting gets a chance.

McGann: What about fear that coverage of government will be manipulated in some way?

Freund: The fear is there. And it’s sometimes not unjustified. The government tries to intervene, people call up, they talk — nothing is documented — everyone knows, but no one can really prove it. There are all kinds of attempts to land your people into this editing room and that desk, that happens. But look, that happens in commercial stations as well — there may be other interests. How many very critical reports of let’s say, the tobacco industry have you found in American magazines whose advertising depends heavily on the tobacco industry? Just a question.

February 01 2010

17:00

What is journalism school for? A call for input

[I've asked Seth Lewis, a former Miami Herald editor and smart journalism professor-in-training at the University of Texas, to join our cast of occasional commentators here at the Lab. One of his primary focuses will be looking at the changing world of journalism schools. Here's an introduction. —Josh]

Last year saw no shortage of future-of-journalism conferences. But if 2009 was dominated with talk about business models for news, perhaps 2010 will be the year we hear more about education models for news.

The ongoing discussion of pay models has led us to think more critically about forms of press subsidy — to recognize that all journalism is subsidized to some extent, that each type of subsidy comes with its own kind of strings attached, and that journalists of the future will have to be more proactive in understanding sources of funding or finding ways to innovate their own. All of that talk is healthy for journalism.

Likewise, a wider debate about journalism education might lead us to ask some soul-searching questions, beginning with the existential one: What is journalism school for, anyway? If j-schools historically looked to the industry for leadership and jobs for their graduates, how should they orient themselves now? What happens when much of our journalism education has been built up around the “newsroom paradigm” of training 20-somethings to operate in a traditional organizational setting — at a time when media work (of all kinds, not just journalism) is increasingly individualized, temporary, and precarious? Even more, at a time when the future of higher education itself is in major flux, what becomes of journalism education’s place in the university and society at large?

These questions have been on my mind lately since I was invited to join the Lab as a contributor covering the evolution of the j-school. I won’t profess any more expertise than my own experience in j-schools (as an undergrad, and now as a Ph.D. student at the University of Texas), as well as the perspective I’ve gained recently after touring several major j-schools as a candidate on the academic job market. I had intensive two-day interviews at three schools, all major programs in different parts of the United States, and also engaged in half-hour phone interviews with another four programs, most of them of the Big J-School variety.

In each case, my interviewers posed a question that went like this: “What should we be teaching today?” This wasn’t a loaded question, a guess-what-the-teacher-is-thinking sort of test. They sincerely wanted some fresh ideas, as it was clear that just about every school is grappling with curriculum reform.

So, what do we teach?

After fielding that question at least a dozen times, I finally settled on this talking point: It’s about adaptability. We’re never going to find the silver bullet, so instead let’s teach students to be flexible — to work in unpredictable settings, to generate their own funding as needed, and otherwise learn as they go. We can do that by using a curriculum that is similarly flexible, adaptive to technological and cultural trends in society even while it retains bedrock values of truth-seeking and fairness.

That plan is imperfect, of course, but it’s a start. Looking ahead, I hope to draw on the wisdom of others in blogging about what j-schools large and small are doing for 2010 and the uncertain future beyond. For starters, I’m reaching out to the deans and directors at the 12 schools funded by a multimillion-dollar Carnegie-Knight initiative on journalism education to see how these schools — arguably the biggest players in the field — are responding both to the contractions among legacy media and the opportunities for growth elsewhere.

But, in the meantime, I would also like to hear from all of you, readers of the Lab: What should the 21st century journalism school look like? Would it have a more DIY focus to prep students for freelance careers? Take a more project orientation, as in Jay Rosen’s Studio 20? Focus on teaching the right mix of analog and digital skills, as Ryan Sholin suggests? Or try to become part of the wider academic curriculum — a sort of “journalism school for all” general-education requirement, as Dave Winer recommends?

What are your ideas? Drop them in the comments, or if you think there’s something I should cover in a future post, e-mail me directly at sethclewis@gmail.com.

Photo by Fabrice Florin used under a Creative Commons license.

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