Papers brace for Yahoo Street Journal
W orking at a major metropolitan newspaper these days can feel a bit like working for the East German Politburo, circa 1988. It’s a good gig with great benefits, and people seek you out at cocktail parties, but you have this sense that your days are numbered.
Newspapers, you may have read, though most likely not in a newspaper, are on the way out. In this Age of the Internet, we print journalists are stodgily set in our old ways and steadily losing readers and advertisers as a result. As Rupert Murdoch reminded an audience of newspaper editors at their annual convention earlier this month, four out of five Americans read a newspaper regularly in 1964, compared with only half today. And according to a Carnegie Corp. study cited by Murdoch, among the sacred demographic of 18- to 34-year-olds, only 19 percent turn to a newspaper on a daily basis, compared with the 44 percent who rely on a Web portal for news. (For a copy of Murdoch’s speech, see www.newscorp.com/news.)
Even nimble bloggers (and I am happy to count them as journalists, as I don’t consider ours an exclusive guild) are eating our lunch, especially in my niche of opinion journalism. Still, much of the angst is overdone. Newspapers are undoubtedly in for a period of wrenching change, especially in terms of how the product will be delivered. But we are hardly the equivalent of horse-drawn-buggy manufacturers at the dawn of the automobile era. That’s because our core product – thoroughly reported, reliable information – has never been more valuable.
Take those Internet portals. Yahoo is worth almost $50 billion; Google’s market capitalization is an astonishing $60 billion. And yet, for all their revolutionary and transformative power as information hubs, these companies have not reinvented the news business. Go to Yahoo’s home page and the prominently featured news items are mostly wire stories from such sources as the Associated Press and Reuters. How retro. The point-and-click world still depends on us old-fashioned news types for indispensable content.
I don’t mean to suggest that all worthy journalism comes from the establishment media, but even a nation of 300 million bloggers would need costly news organizations to break stories like the prison abuse scandals in Iraq or to develop investigative series like the one on the Martin Luther King Jr./Drew Medical Center that earned the Los Angeles Times a Pulitzer. The Internet will increasingly empower consumers to control and interact with their news, to the point of becoming their own portal’s editor in chief. Maybe you’ll take your entertainment news from the Los Angeles Times, bundled with five industry blogs; or perhaps you’ll want your “front page” to be the latest from the Mexico City bureau.
Newspapers have been agonizing about the degree to which they will control this revolution via their own Web sites, and with good reason. In the digital world, the Yahoos and Googles have built brands that eclipse those of the Los Angeles Times and the New York Times. As Murdoch put it in his speech last month, we are digital immigrants and they are the digital natives. But like Murdoch, I remain optimistic that there is a great deal of opportunity in this migration, even if newspaper types in the long run lose direct control over the distribution of our product, much as movie studios did when they had to divest their theater chains. Our content, like the studios’, will remain valuable on other distribution channels.
It’s only a matter of time before a Yahoo or a Google decides to buy an old media company in order to differentiate itself by offering high-quality, proprietary news. Or a company like Amazon could buy a prestigious newspaper publisher and reinvent itself as a portal, leapfrogging over those that treat news updates as a commodity.
The L.A. Times’ owner, Tribune Co., can probably be had for about $15 billion, if anyone is interested. Dow Jones, publisher of the Wall Street Journal, is a steal these days, with a market capitalization below $3 billion. Google’s value often fluctuates by that amount in one day of trading. It would be a real coup for any digital native to position itself as the only online provider of the WSJ.
Things could get even more interesting if the buyer took the next logical step and abandoned the print edition altogether. But as a member of the Politburo, I’m afraid I am getting a little too far ahead of myself here.