New Media Business Models May Have a Long Way To Go To Develop Fully

Reasons cited for optimism are that younger generations including millennials are interested in and consume news, even though much of it is over social media as opposed to reading in print newspapers or accessing stories directly through media companies' websites. "People are consuming more news than they ever have before. The problem facing the news industry" therefore isn't "a demand problem, but a revenue problem," said Executive Director Tom Rosenstiel of the American Press Institute. "There is no scarcity online."

"We're so much at the beginning of this process, we probably have an oversupply," plus ways to measure how much online news is consumed are so poor that they're akin to radio around the time of its start in 1925, Rosenstiel said. Additionally, power has shifted from the "creators of content to the owners of pipes," added the former journalist, whose institute is affiliated with the Newspaper Association of America. Politico's Jack Shafer, who writes about the media industry, and Rosenstiel disagreed over what technology led to the cratering of newspaper ad revenue: cable TV or broadband. As Warren Buffett observed that papers were losing their pricing power in the early 1990s, "the American newspaper has probably been dying since about the time of the arrival of cable television everywhere," Shafer said. In Rosenstiel's view, cable affected broadcast TV.

Online revenue is also smaller than revenue papers used to get. Washington Post media reporter Paul Farhi compared his paper with The Huffington Post, which along with parent AOL now is part of Verizon (see 1506230044). The Huffington Post, one of the most successful news websites, is "a success by every measure -- except at business," with annual revenue of about $140 million and no profit, Farhi said. In The Washington Post's heyday, that was six months' worth of profit, he noted. Farhi deemed himself "very happy" to "have an owner who is a multibillionaire." Amazon CEO Jeff Bezos bought the paper in 2013 (see article in this publication's Aug. 7, 2013, issue). Saying he'd leave it to audience members to form their own judgment, Farhi said when it comes to journalism, "the standards -- let's just say have changed" between now and even what the Post did five years ago.

Things also have changed in broadcast-TV network news, said Sharyl Attkisson, a former CBS News journalist who in the fall will start a new Sunday morning news program for Sinclair that she said will focus on investigative reporting. Consumers still have lots of interest in such reports, but networks including CBS may be doing less of it, she said. "The bosses have less appetite." Though "there is still plenty of investigative reporting to be found in journalism," Attkisson said, she worries that there is a lot of subtle censorship occurring in media. CBS had no immediate comment.

Unique content ought to be a way to stand out from the crowd in the media industry amid technological change, panelists said. While some journalists have to write several stories a day, others consider it their mission to generate original news, Attkisson said. "There is a constant, ongoing argument" to "fight the managers that are comfortable with what they saw across the street" first from a rival media organization versus those who want to seek out new stories, she said. Journalists aren't "brands, we're people," Farhi said. "Good, fair, ambitious" and talented journalism will stand out and "everything else is just manipulation ... and marketing," he added. "The re-assembly of news" -- much decried -- "was there at the creation" of the industry and didn't spring up with online media, Politico's Shafer said. Business success will depend on having unique content or in how it's framed, Rosenstiel said. "You are no longer in distribution. That is a very challenging shift for people in editorial," he said: "If you are simply repackaging stuff in ways that [are] pretty typical," that won't make for a thriving business.