the audit

The hamster wheel vs. the quality imperative

The real problem with JRC/Advance free model and the unappreciated benefit of a paywall
September 14, 2012

…The great is rare; the dull quite common. But — and this is the genius of the online format — that doesn’t matter, not any more, and certainly not half as much as it used to. When you’re working online, more is more. If you have the cojones to throw up everything, more or less regardless of quality, you’ll be rewarded for it — even the bad posts get some traffic, and it’s impossible ex ante to know which posts are going to end up getting massive pageviews. The less you worry about quality control at the low end, the more opportunities you get to print stories which will be shared or searched for or just hit some kind of nerve.——Felix Salmon.

The Journal Register Company has cast itself as an avatar of the future of news, making tough decisions now that other, less stout-hearted and forward-thinking news executives—its CEO John Paton called them “crappy”—are unable and unwilling to make.

Paton says such decisions are “dramatic, difficult and bloody.” (This of course begs the question, “bloody for whom?” But that’s a bigger story, isn’t it?)

But, as the news business contemplates JRC’s second bankruptcy in three years, it’s important to keep mind that the JRC model isn’t just a model for a digitally centric journalism but, as Ryan Chittum says, for a very particular kind.

Its main distinction isn’t that it’s “Digital First,” the name of the umbrella company that controls JRC. Most of the journalism practices that the company advocates—engaging readers, using social media and digital tools, etc.—are now commonplace in American newsrooms. The idea of the grumpy old print man resistant to change is mostly a straw man. If not every news organization wants to hold its news meetings online or open its newsroom to the public, that’s not necessarily a sign of backwardness.

The most distinctive thing about JRC at this point, rhetoric aside, is its business model: It gives away online for free what it charges for in print. Digital subscriptions—paywalls—are not part of the mix. Its online business relies on digital ads pretty much entirely.

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In using this model, JRC is joined in an increasingly lonely orbit by Advance Publications, another closely held company that, consequentially, owns the Times-Picayune in New Orleans, among many other papers, including, ominously, the Plain-Dealer in Cleveland and the Star-Ledger in Newark.

Why these two companies stick with this model—whether for ideological reasons or for financial reasons, or for some third reason—is a separate question. In JRC’s case, the logic of a free model certainly flows from Paton’s declaration in June 2011 about what he believes is journalism’s low market value:

As career journalists and managers we have entered a new era where what we know and what we traditionally do has finally found its value in the marketplace and that value is about zero.

Whether that remark has been later, as they say in the Senate, “revised and extended,” it says what it says. If you don’t believe “what we know and what we traditionally do” is worth much, you’re not going to charge for it. That is all part of the “Confidence Game.” Point is, you need some.

Normally, I’d just say, “let a thousand models bloom,” or “may the best model win,” and root for them all.

But whether the free online news model succeeds financially is one thing, and, put it this way, bankruptcy is never a good sign. The free model, however, also carries with it real implications for the kind of journalism that it can support.

We know this going in: The online game is a volume game. More content generates more traffic, which hopefully means higher ad rates. Felix above was discussing The New York Observer, the once-cheeky and literate source of readable and gossipy stuff about Manhattans three obsessions: media, real estate, and food (and money; make that four). Whatever’s become of the Observer, his broader logic is true blue. Online, more is more.

Given these incentives, as well as limited newsroom resources, more posts mean less time spent for each. In today’s destabilized news environment, this spinning of the hamster wheel is a familiar theme. The Project for Excellence in Journalism picked up on the trend back in 2008:

In today’s newspapers, stories tend to be gathered faster and under greater pressure by a smaller, less experienced staff of reporters, then are passed more quickly through fewer, less experienced, editing hands on their way to publication.

Less time per piece is, of course, a recipe for lower-quality journalism—the kind people are always complaining about—and it is a logical, if not inevitable, result of the free model. Public-interest journalism is certainly possible under the free model, but, the trouble is, under the model, it also makes no sense. Why risk time and money on an investigation when its traffic potential is as uncertain as a blog post that took an hour? You might do it anyway, as Huffington Post does, for instance. Salon, among others, has worked to make fewer go farther. LowHigh-volume low-quality isn’t inevitable under the free structure, but the model’s incentives run in that direction.

So that’s a public-interest argument against the JRC/Advance model, whether it works financially or not.

Put up a paywall, though, and the logic changes. When The New York Times Company put up its paywall last year, amidst much derision, that was a “dramatic and difficult” decision and yet not “bloody” at all. Go figure. Besides being a big success, it also created what could be called a “quality imperative:” The new revenue stream could be used to help maintain quality but at the same time, the paper had to produce journalism that justified someone actually pulling out their credit card to pay for it.

Indeed, a digital subscription, as opposed to a print subscription, is even more of a mini-referendum on quality. The old print model was bundled together—movie listings, grocery store coupons, classifieds, local news—so it was hard to tell why people bought the paper. Under the digital subscription model, chances are it’s for the journalism.

And of course, what was dismissed as a one-off, premium/national paper story is now fast becoming an industry standard. Will it save the day? Wrong question. The real issue was always whether it would crash digital ad revenue, and the answer is no.

Now, of course, as Tim McGuire wisely reminds us, the paywall question is complicated. People will chose or not choose to pay for a subscription for a lot of reasons. And, let’s face it, the free model has to say for itself journalistically, particularly in the idea of turning local news organizations into great digital gathering places for local communities—a public sphere for the 21st century. It’s a longer conversation, but,IMO, newsgathering has to come first. Putting up a paywall doesn’t mean you’ll be good, but it is an incentive for making the journalism itself worth paying for.

Or as the much admired digital thinker Martin Nisenholtz himself puts it: “Once you start to actually charge people for the stuff that you do, that’s when you know whether you have customers.”

Amen, brother Martin.

So one wing of the industry—eschewing buzzwords and voice-of-God pronouncements—is adding revenue via digital subscriptions and stringing out print income as long as possible. As Chittum says, it’s not sexy, but, crucially, the strategy enables, and indeed requires, news organizations to preserve news-gathering assets as long as is practical while the technology and finances of the news business complete their radical transformation, which is still in its early stages. These newsroom assets have already been trimmed and may need to be cut again. But the muddle-through model delays the moment and may, just may, obviate it.

And just to be clear: Preserving newsroom assets is not a form of cowardice, just as cutting them is not a form of courage. It really depends, and right now, it looks like the opposite is true.

The Advance case shows a second implication of free online news.

An anguished Steven Newhouse says his company must adapt to the times:

We are in the midst of a digital revolution and instead of constantly being disrupted by our numerous online competitors, we decided to re-invent ourselves. It is useless to bemoan the digital revolution and the unintended consequences that have come along with it; the trick is to turn that trend to the advantage of our papers, our readers, and our communities. This is a difficult task, and it is the one we are deeply engaged in.

In Michigan, this led to what amounts to a scorched-earth policy for Advance’s news gathering assets: Last November, it confirmed it laid off nearly half (550) of its 1,200 employees. About half those layoffs were later offset with the new hires. But the cuts, nonetheless, are real and substantial.

In New Orleans and across its Alabama properties, the cuts were similarly dramatic.

Now, the way Advance went about this was ham-fisted and needlessly obfuscated with digital hoo-hah slathered with a layer of sentimentalist goo about Hurricane Katrina and the good old days in Biloxi.

But these, one assumes, are staffing levels appropriate for this particular model. Advance has done the math, and this is what the free online model pays for.

The financial prospects of Advance’s model are uncertain. But what it not uncertain is that it requires cuts now.

Advance officials describe its moves as inevitable, but Advance itself has chosen this particular path, and done so voluntarily. If this free model were the only one available, that would be one thing. But since it isn’t, and since it, as Advance tell us, requires dramatic cuts, and requires them immediately, AND since the model is based on click and post volume, the free model should be opposed.

This is not a cost-free experiment. Once the newsrooms are degraded, there is no clear path to redeeming them.

And if you think, this brave new click world is theoretical, you should at least pay some attention to Times-Picayune staffers and former staffers who have worked under the changing regime.

Here’s former reporter Sheila Grissett, for instance:

“I’m old-school, and when you tell me that I must post a partially reported piece of news – even if it’s wrong and can later be corrected – because some people somewhere want to see something new, anything new, each and every time they click, that was my line in the sand….”

Oh, and did I mention that Paton publicly endorsed Advance’s moves?

All of this puts JRC’s second bankruptcy into sobering perspective.

The analyses we’ve seen of the filing and its meaning are all quite astute financially. If you can read only one, Chittum has the numbers nobody else has been able to get.

But the real problem with JRC’s model, as with Advance’s, isn’t merely that it has failed to prove it can support quality journalism. The problem is, it is designed for the opposite.

Digital first? Absolutely. But this version? No, thanks. The costs are too high, and it’s not even working financially. And what if we learn, in the end, that it wasn’t even necessary?

Dean Starkman Dean Starkman runs The Audit, CJR’s business section, and is the author of The Watchdog That Didn’t Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.