Last week I heard NYT columnist Jason Pontin refer to Google as a "giant parasite," video here, I wrote why I disagreed with him here, and he promptly responded here. Well, I’m not going to win the “fastest blogger” award for this response, but I did want to come back to this briefly.
First, my original post on Pontin’s comments was a bit too snarky, so I apologize for that, and I appreciate his response. I do continue to disagree with him and here’s why.
“I have to make money to survive, despite our ownership by MIT. Sam Zell doesn't determine what profit margins are acceptable to Wall Street's analysts and investors. Both Zell and I must live in real markets, not within the speculative future of a media blogger, and those markets have become punishingly difficult.”
Agreed. But, getting more non-profits to own media outlets is a good strategy toward relieving part of that market pressure. So is taking companies private, something that Cox Communications did a couple years ago.
For public companies that can’t escape the demand for 20 percent plus profit margins every quarter, I don’t see how they’re going to make it in the long run. I don’t see a way out for Gannett or MediaNews. Investors in those companies have become convinced they can see monopoly-sized profits every quarter. And they can, for a time, while they drive these papers into the ground. But unless a publication has some kind of insulation from the public markets, like the family ownership structure of the Times or the Post, I don’t see a rosy future for it. The solution is to buckle down, invest in web sites, and capture some of the billions pouring into online ads; which have were up 25 percent year-over-year throughout 2007.
"If you want the journalism upon which all three parts of the media industry depend, who is going to pay for it? Readers won't, if they can get content for free (and as you say, both the Times as well as many other magazines have abandoned pay-to-play.). Advertisers won't pay enough, because AdSense and AdWords and similar networks are cheaper and more effective than display."
Well, one could argue the advertisers are in a more transparent market now, and they are getting a better deal for their money. They just didn't have many options before, and the newspapers could force them to accept higher rates.
The Times' abanonment of its pay model seems a success story to me, not a failure. They had over 200,000 online-only paying subscribers, I believe, (including myself.) They made a calculation that it was better to make that paid content freely available so that it could be found through search engines. The online ad revenue will more than make up for the subscription money of TimesSelect folks (that’s the plan, anyway).
Yes, it’s unfortunate that readers aren’t willing to pay much for print content. But throughout the entire pre-digital age, not many newspapers made it past the 25 cent mark in any case. And we’ve always been competing with free (television). So consumers have been trained to put a pretty low price on the news in any case. The future of for-profit print media is going to come from advertisers.
It is happening. Some web publications are starting to make money, like the sites represented by Federated Media. I know in the legal media there are a huge number of lawyers who are blogging a variety of topics, and it’s tough for us reporters to figure out what we have left to contribute when the events are followed so closely.
The Sunday papers in San Francisco, like most big cities, are full of inserts. Those inserts account for an enormous amount of the newspapers’ profits. In a sense, the journalism business has been subsidized by the coupon business. That game is ending. We’re actually going to have to get read, by someone who cares, and can’t just say ‘we’re the experts, pay us.’
"How are we pay for this very expensive enterprise of creating first-rate, quality journalism? It's not clear, although I am working on the problem, because Google isn't going away."
Very few metro papers are going to be able to have the kind of independent globe-spanning coverage they had in the 1980’s. Papers are becoming more locally focused. And that makes sense, since readers—increasingly coming through search engines—have lots of other choices, often better choices, about how to get world news.
Overall, I think Jason’s critique is aimed more at the Internet as a whole than at Google. And I’m not being pollyanna-ish about the real dangers that are posed to journalism. But I think those dangers are posed by competitors—people who have a right and ability to express themselves, whether they do it for money or not. I don’t think those people, or the search engines they use, are “parasites” on the media business. There are grandmas who want to talk about when to plant azaleas in Baltimore, to paraphrase a recent interview I had with an executive at a new media company. Much of that “evergreen” or seasonal content in the Home or Style sections has been giving a free ride to us serious-furrowed-brow journalists, too.