Tough Times

What is it about The New York Times that generates so much hand-wringing? In a rambling essay on the fate of the Times published in The Atlantic, Michael Hirschorn first raises the fear that the newspaper might stop publishing in a matter of months. Then he seems to remember that the corporation is more than just the newspaper and reassures us the Times company has a few more outs left.

Eventually, Hirschorn concludes that the print edition of the paper will have to go along with all that silly lifestyle stuff (like TV reviews) but the serious news will find an audience willing to pay for it on the web. The end of the paper paper would strand all but the 20% of the writers. Hirschorn says this is all the web revenues can support but he doesn’t tell us if that takes into account the lost printers, marketers and circulation folk associated with the print paper’s production.

Clearly, over the short run, there would be a culling of the journalistic herd. If 80 percent of The Times staff ends up laid off, many of them won’t find their way to new reporting jobs. But over the long run, a world in which journalism is no longer weighed down by the need to fold an omnibus news product into a larger lifestyle-tastic package might turn out to be one in which actual reportage could make the case for why it matters, and why it might even be worth paying for. The best journalists will survive, and eventually thrive. Some will be snapped up by an expanding HuffPo (which is raising millions while its print competitors tank) and by the inevitable competitors that will spring up to imitate its business model, or even by smaller outlets, like Talking Points Memo, which have found that keeping their overhead low allows them to profit from high-quality journalism. And some will succeed as independent operators. Figures like Thomas Friedman, Paul Krugman, and Andrew Ross Sorkin (the editor of the DealBook business blog, which has been a cash cow for The Times) would be worth a great deal on the open market. For them and others, the bracing experience of becoming “brands of one” could prove intoxicating, and perhaps more profitable than fighting as part of a union for an extra percentage-point raise in their next contract.

Why Hirschorn thinks the Huffington Post is better position than the Times is a mystery. The blog has neither the revenue nor the resources of the Times. The Huffington Post raised $25 million in Q4; The New York Times made $85 million from the digital side of the paper (and another $28 or so from in Q3.

If the Huffington post were a legitimate threat–meaning you could generate serious revenue on the web–all of the Times’s problems could be solved. The job at hand would simply be to create a cost-effective vehicle to deliver what the Times considers quality content and profitable advertizing space along with it. Indeed, had the Times been more aggressive about shedding assets in the past few years, they’d have a bigger war chest to try to bridge the gap until web revenues reach a sustaining level.

The reason Ford is the only one of the Big Three auto companies that doesn’t need money immediately is because they aggressively mortgaged the company’s assets two years ago to finance a turn around. In 2007, the Times was offered a handsome sum for the Boston Globe but would not entertain the offer.

Getting back to Hirschorn, there’s no evidence that a web-only media business is viable no matter how small the staff. The unexplored crisis here is not in journalism but in advertizing. It’s not clear that advertizing has any value. And the web seems to be confirming that for marketers. Newspapers are dying not because they reach fewer readers–they do–but because fewer marketers want to pay newspaper rates to reach those individuals.

So far, there isn’t enough evidence to suggest that marketers want to pay internet rates either. Even if they did, what’s the basis of the assumption that Krugman, Friedman and Sorkin could easily become self-sustaining, profitable web brands in the Talking Points Memo vein? Each is a beneficiary of the other’s traffic and all have gained from the imprimatur of the Times. Not one of the men mentioned is self-effacing yet they all remain at the Times. Why? The reasons are many, I’m sure. But one has to be that barriers to succeeding on the “open market” are far greater than Hirschorn lets on.

What the Times lacks, besides management that instills confidence, is a clear business plan. The old order is dying but the new has yet to be fully realized. Until that central conundrum is resolved, the journalists at the Times are in a better position to take advantage of what comes next by sticking together than they are by striking out on their own.


End Times
Can America’s paper of record survive the death of newsprint? Can journalism?
The Atlantic; January, 2009

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