Living in LaLa Land

Many years ago when I was a bigshot, a Danish newspaper company invited me to speak at its annual retreat. It was held at a hotel in Skagen, where the famous watches are made, up on the top of Jutland. I thought maybe I could buy a new watch for my wife, The Queen Mother. A pretty tourist town, with good food, and, in the evenings, a chance to experience that thing, hygge. Why not?

What happened was a long train ride from the airport through scenery that made Nebraska seem picturesque. I was deposited in a hotel that looked like a nuclear bunker. Hygge, I discovered, was the feeling of immense self-satisfaction occasioned by being middle-class and Danish. The food failed in its attempt to be the apogee of civilization, I left each table ravenous and dreamed of pork sausages. As it turned out, there were fewer Skagen watches in Skagen than there were back in Atlanta, where I was living at the time.

Do you know anybody today who bangs on at cocktail parties about the wonders of the hygge lifestyle? No, I didn’t think so. Yet just a decade ago it was all the rage. Now, instead of living the hygge life, all my friends talk about is selling the house and leaving the big smoke behind. Rusticating. “You can work from anywhere these days,” they will tell you. (As it happens, I just wrote about that very thing over on LinkedIn). Like all fashionable tropes, the pendulum will swing and this, too, will pass.

Nothing indeed can be a stronger presumption of falsehood than the approbation of the multitude.

David Hume “Essays, Moral, Political and Literary (1758)

Yes, Hume was a dreadful old racist but he’s right on this one. The herd is almost always wrong. That’s because the herd is lazy. It’s made up of creatures seeking safety in numbers. To them, individuality is dangerous. A novel idea can get you killed. So, there’s nothing the herd likes more than a catchphrase masquerading as derived wisdom. Makes everyone feel comfortable. This explains why those who question conventional wisdom are challenged not so much for the veracity of what they say, but for puncturing that feeling that everything is as it should be.

Peter, okay, I take your point about newspaper deserts, but don’t you worry that now that Google and Facebook have killed newspapers, we’re losing the last credible, impartial source of news we have?  Where can people go for news they can trust? Bill.

Most of the emails I get here at BlastofWinter are complimentary. But every now and then I get a return blast myself that jolts me awake. All good, you question scripture, some are bound to holler “heretic!” It’s all part of the job. I appreciate the serious attempts to rebut something stupid I’ve said, that’s a gift of time and focus that’s worthy of respect. Occasionally though, a troll tracks me down and skewers me. I stew, spend a minute formulating a witty response, then delete it, and move on. You have to wonder why anybody would troll me here on Blast of Winter, it covers a rather esoteric subject, but what I’ve learned over the years is that the act of trolling is a compensation for some kind of inadequacy — it makes the troll feel better and more important. My posts here seem to have a long shelf life, I sometimes get comments on ideas I explored months previously. This particular post today was provoked by an email I received in January wherein a reader named Bill Post (name used with permission) went after me for suggesting last August (!) that the phrase “news deserts” was bullshit. A market where a newspaper has expired is not a news desert, I had written, it’s a newspaper desert, and that’s an entirely different thing.

“News desert” is a shibboleth (what a great word!) that originated deep inside the journalism bubble. It’s a handy phrase. It’s got a few former editors good gigs at schools of journalism and of late has been widely deployed to extract grants from philanthropist patsies and even funds from Congress in order to perpetuate dying newspaper companies. This argument might seem like small potatoes to you, but at least it gave me a chance to frame this rejoinder to the stultifying belief system that is undermining the news business today. Bill and I fell into an email exchange that went back and forth for a week. That’s one of his email responses in the chain, up there.

I guess I should point out that Bill is a newspaper journalist.

The central problem with his argument is that all the talk of newspaper extinction notwithstanding, news consumption is up, everywhere. We’re drowning in an ocean of news, not parched from thirst in a news-less desert. In the midst of this remarkable explosion in news products, there is a digital renaissance in local news markets around the country. According to Poynter, more than 70 local newsrooms launched last year, and more than 50 local newsletters, too: Poynter Local Edition I think they’re undercounting. This outfit does a superb job of tracking and promoting this renaissance, if you want to know more: Local Independent Online News Publishers

So you see, we’re fumbling and stumbling our way towards an entirely new era of local news.

We’ll all be the better for it, too.

We just have to give it time. It’s a big and important transition.

But to understand where this transition will lead, we need to be clear-eyed about the actual significance of local news to local consumers. It’s easy to exaggerate the size and intensity of the market for it, to forget that it was always just one piece of the big newspaper bundle, and in that context, readers often chose to overlook it. If you think it got lost in the shuffle then, think about where it finds itself in today’s world of limitless digital choices.

Despite the fact that newspapers have been unbundled and laid bare for all to see, some of those seeking to rebuild a replacement local news product believe the market can still drive sufficient return to support newsrooms of 15-20 people or more. They’re living in LaLa Land. It cannot. Those days are gone for good.

It’s not that local news has somehow become diminished in stature and value — it’s just that the sector is finding its appropriate place in the panoply of media options just a click or a swipe away.

It’s important to say here that some publishers, like Axios, understand this point. Their local market operating presence is scaled to the relatively small size of the opportunity. From a revenue perspective, I regard Axios Local as a national advertising play, anyway. Once the company has built a presence in the top 50 metropolitan markets, it will have built a unique digital platform for national advertisers, providing them non-programmatic reach deep into local markets. At that point Axios Local becomes a very interesting business indeed.

You will have noticed that Bill also mentions that newspapers were killed by Google and Facebook. We can dispense with this silly piece of conventional wisdom pretty quickly. It’s just another self-serving argument designed to mask market failure. Newspapers were losing young readers — their critical replacement audience — a decade before the Netscape IPO in 1995, and that was almost a decade before Google and Facebook appeared. In fact, larger newspapers were losing circulation everywhere, as The New York Times reported at the time.

When Google did finally decide to enter local markets with its own sales force, around 2005, I was involved in the early planning. Google decided to go after small businesses, tiny businesses, so small they never even invested in newspaper classifieds. So, if Google didn’t put newspapers under, who did? Well, they were done in by Autotrader and Cars.com, by LinkedIn and Indeed, by Zillow and Trulio, by eBay and Craigslist, by digital natives that together ripped out the automotive, employment, real estate and general merchandise categories of the classified advertising franchise — and with it 40% of a typical newspaper’s revenues and 60% of its profit.

Newspapers thought they were in the news business. Another myth. They weren’t. They were in the advertising business. They why they never saw the tsunami coming.  

And then, of course, comes the trope that the death of “trusted” newspapers will result in an uninformed populace easily influenced by “peddlers of fake news,” and that such a thing “threatens democracy.”

It’s astonishing how quickly this idea that newspapers are somehow indispensable to the proper functioning of democracy has gained traction. I’m guessing Bill is new around here, because I’ve been writing about this particular illusion for a long time, beginning here, in https://blastofwinter.com/2017/02/01/the-media-system-is-no-longer-trusted

And I’ve also written about the danger I see from the national news media and the government becoming entwined in a circle of mutual manipulation, mythmaking, and self-interest. I thought back then — and still do — the two institutions were becoming so ensnared in a symbiotic web that the news media was increasingly unable to tell the public what was true and the government was unable to govern effectively without their acquiescence.

Pravda, the U.S.A. edition

“Pravda, the U.S.A edition” is in the top three most-read and most-forwarded BlastofWinter posts, so it must have touched a nerve.

For anyone working in journalism today, it’s important to understand the basis of trust in media and its foundation in the false doctrine of objectivity.

My career in media began in journalism, with BBC Television in London, in 1974. What I have noticed over the years is that while many editorial decisions are made sincerely, with readers in mind, the market for the work, the audience, is usually an unfocused abstraction, built on long-held assumptions, lazy inference and journalistic folklore. That’s why back in the day when newspapers ruled, you could cut off the masthead of ten of them, lay them down on a table, and nobody you asked could tell them apart. To all intents and purposes, they were identical. These were the products of unrivalled groupthink.

The product approach was inside out. Instead of starting with the audience, newspapers started with their own belief system and tried to impose it on the market at large. They were bound to please some readers and win their trust. They were similarly bound to drive others in town round the bend. And they did.  

This, unfortunately, is the way the brand perception of daily newspapers was baked in cities and towns throughout the United States.

It’s one thing if you decide to chase an audience whose demographic definition might include, say, “liberally inclined,” after a deliberative process designed to assess the potential of a particular market segment. It’s quite another to do so reflexively and then claim objectivity and political neutrality at the same time. In that case, you’re doing exactly what the “fair and balanced” Fox News Channel attempts to do; you’re claiming the center by moving the neutrality needle to the left (or in the case of FNC, to the right) as a function of the political and cultural perspective of the group to which you belong. In either case, the only audience that will trust you is the audience already predisposed to your world view.  

That’s my point.  

 …contrary to prevailing belief, it’s not actually misinformation or echo chambers that are the source of conservative alienation from mainstream journalism. Rather it is the interpretive framework they rely on for making sense of what they see in the media

Jihii Jolly, “Time Spent”

Engaging with the news is rarely an exercise in critical thinking. It’s not some kind of independent, objective, solitary process. Our personal world view takes shape through our engagement with the particular community or network to which we belong. Our network is the filter through which we interpret events. This is a critical component of our own self-definition — and this is where conventional wisdom about media originates.

These networked interpretative communities construct narratives about news media, typically placing publishers in a category of liberal institutions at odds with the interests of conservatives. You can understand then the argument from people on the right that liberal media are trying to convince the world that conservatives are morally defective. Their own media tells them that’s what’s going on, along with the social media influencers they follow – and most of their friends in the real world, too. Jihii Jolly has more to say on this subject on her blog Time Spent, if you’re interested: Time Spent

As Jihii says, there is a big difference between news reporting — and journalism. News reporting is describing a particular event in factual terms.

That’s not journalism.

Journalism is by its nature interpretative, judgmental, and opinionated. Journalists do not report, they attempt to explain. These days it sometimes seems that interpretation of the news event has become more important than the event itself. As I have often said here, journalism does not create a point of view – it reinforces an existing one. We trust the news we happen to like, we like the news we trust – and the news we happen to like is determined by the network (or community) to which we belong. So, naturally, is the news we happen not to like, which is why we assume ulterior motive for the publishers who offer a world view not endorsed by our own particular network: “Fox News are a bunch of liars.” “What else would you expect the Wall Street Journal to say?” “The New York Times has a socialist agenda.”

Which brings me to Exhibit A:

Correction: June 16, 2017

An editorial on Thursday about the shooting of Representative Steve Scalise incorrectly stated that a link existed between political rhetoric and the 2011 shooting of Representative Gabby Giffords. In fact, no such link was established. The editorial also incorrectly described a map distributed by a political action committee before that shooting. It depicted electoral districts, not individual Democratic lawmakers, beneath stylized cross hairs.

This is the official correction to the article that caused Sarah Palin to sue the New York Times. The editorial — “America’s Lethal Politics,” published after the shooting of Republican House leader Steve Scalise — originally linked Palin’s PAC to the earlier shooting of former Rep. Gabby Giffords. If she had not contracted COVID last weekend, the case would be in court as I write this. What an irony it would be if Palin of all people ended up responsible for weakening the libel law that has protected the U.S. press since N.Y. Times Co vs. Sullivan in 1964. You can find the actual corrected editorial here: America’s Lethal Politics – The New York Times

This case has been much discussed by bloviators across the political spectrum in recent days. Apparently, it suggests that for a moment there, the New York Times violated its own standards of objectivity.

Objectivity is a crock.

Objectivity has been the mythical standard for American journalism for only the last 50 years, anyway. Prior to that, as in other countries around the world, each U.S. newspapers stood for a particular political position and marketed its product to a particular constituency accordingly. It was a more competitive marketplace back then and establishing clear differentiated value was critical. As newspaper consolidation took place and most towns became one-newspaper markets, advertising revenue supplanted subscription and street sales, and in order to build as big a presence as possible for advertisers, newspapers adopted and promoted a posture of neutral, objective, “trustworthy” news. Then came the internet, and with it, broadened choices. Unfortunately, demand can’t expand in response to the new supply: 330 million sets of American eyeballs and a 24-hour day are all that’s available. The result is that competition has intensified, markets have fragmented and the media industry has lost its franchise strength.

We have returned to a competitive news marketplace where success will again be determined by how well a particular audience segment is served.

Trust in media?

That depends on who’s talking to whom.    

As an aside, I would say that the hypocrisy of claiming objectivity while not delivering on that promise has done great damage to the reputation of the mainstream media and to democracy itself. Further, the market being the market, opportunities for those with a different, clearer political agenda were created. Enter, Murdoch, the master at exploiting opportunities like that.   

What can we learn from all this?  Out here, in the real world where you and I live, what can we do to ensure the growth of a vibrant and interesting news media business?

First, we have to admit to past failures.

You may have heard of the two Smiths, Ben and Justin? They’ve been in the news lately. Ben was hired by Jonah Peretti in 2012 to start BuzzFeed’s news division. In 2020 he was personally recruited by Times executive editor Dean Baquet to take over the Media Equation column made famous by the late David Carr and then, later, Jim Rutenberg.

Justin Smith joined Bloomberg in 2013 and helped push the news organization into live events and video. Before Bloomberg, he worked at Atlantic Media, where he started the business news site Quartz.

Earlier this month they each resigned to focus on a new global news joint venture. Justin wrote a memo explaining why. I was intrigued by what he had to say:

Faced with the technological and societal disruptions of the past two decades, traditional editorial institutions have become almost paralyzed — operationally, politically, culturally

Here’s the full memo: https://www.axios.com/ben-justin-smith-news-startup

Having fessed up to our failures, what should we do now? How can traditional media companies compete in the new digital media marketplace?

Thank goodness for Jeff Bezos and Marc Benioff.

Bezos, of course, owns the Washington Post. Benioff, the founder of Salesforce, and his wife Lynne bought Time magazine from Meredith Corporation in 2018. (Time, by the way, is 99 years old this year) In each case the popular opinion was that these were vanity purchases by gadflies who intended to impress friends and influence people without doing too much legwork. But not only have Bezos and Benioff each brought their famous competitive intensity to the game, they have also brought a tech ethos to the way the game is played.

You can see their hands at work in the recent re-structuring at each company.

If you had spent as much time as me in Silicon Valley, you would have heard the phrase “product-market fit” countless times. The fit is derived from asking a deceptively simple question: Why is a customer likely to use my product? What are the features we need to build, the audience that’s likely to care, and the business model required to entice somebody to buy it?

Marc Andreessen of Netscape, Opsware and A16z fame thinks the fit is pretty important. In the opening of this statement, he captures perfectly, if inadvertently, what it feels like to work inside most traditional media companies today.

You can always feel when product/market fit isn’t happening. The customers aren’t quite getting value out of the product, word of mouth isn’t spreading, usage isn’t growing that fast, press reviews are kind of ‘blah’, the sales cycle takes too long, and lots of deals never close. And you can always feel product/market fit when it’s happening. The customers are buying the product just as fast as you can make it — or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account. You’re hiring sales and customer support staff as fast as you can. Reporters are calling because they’ve heard about your hot new thing and they want to talk to you about it. You start getting entrepreneur of the year awards from Harvard Business School. Investment bankers are staking out your house. You could eat free for a year at Buck’s

To a journalist, such language reads like Swahili. In newsrooms it would be derided as “corporate speak.” Trying to find product-market fit in the news media business flies in the face of everything traditional journalists believe about news judgment, instinct for story, the magic and the mystery of divining what a reader needs to know, political neutrality — in other words, all the stuff that has failed. Not even a journalist can survive on virtue alone…

So, the idea of updating the hidebound process of producing the news creates enormous cultural resistance inside newsrooms, despite the evident failure of the traditional way of operating. Whenever I put on my consulting hat, I work on cultural transformation. When you go after the status quo, you’re poking the pig. It’s not for the faint-hearted.  

But, thanks to the famous intensity and drive of Bezos and Benioff, slowly and surely, the Valley product process is seeping into each of these two venerable institutions. Early in January, for example, the Washington Post announced it was promoting Chief Revenue officer Joy Robins and “expanding her role in overseeing both advertising and subscription revenue.”

There is tremendous opportunity in coordinating our revenue strategy to focus on our audience and the experience of being a Washington Post subscriber,” said Robins. “When we align our business approach with the reader, we build a stronger offering…     

Like the Washington Post, Time also used to be internally organized by functional silo – editorial, promotion, advertising, technical, distribution. Now, like the Post, it’s restructured around product. The overhaul seems to be working; Time projects 30% revenue growth this year to over $200 million, one-quarter of that coming from a studio unit that’s just two years old.

Last week, The Post announced another step in its editorial process remake:

“Announcement from Chief Product Officer and Managing Editor Kat Downs Mulder, Executive Editor Sally Buzbee, and Chief Information Officer Shailesh Prakash:

Announcement from Chief Product Officer and Managing Editor Kat Downs Mulder, Executive Editor Sally Buzbee, and Chief Information Officer Shailesh Prakash:

‘We are happy to announce the creation of four leadership roles that will be key to the success of the hybrid News-Product-Engineering structure announced in October: heads of product, product operations, audience, and curation and platforms. This structure will help accelerate digital innovation across The Washington Post, which has never been more important as we work to modernize the way we tell stories, expand our subscriber base and evolve in the digital space.

The people in these positions will report to Chief Product Officer and Managing Editor Kat Downs Mulder, working closely with her and other news, product and engineering leaders as well as partners across the organization. Together, they will develop cross-functional teams and implement plans for product development, digital audience growth, effective workflows and tools, and innovative forms of storytelling – initiatives that will facilitate high-impact journalism, achieve our strategic goals and ensure operational excellence.

We are excited to build out this team and continue the ambitious and creative work that has made The Post one of the world’s most innovative media companies.’

This is smart stuff, but updating the product process is just one half of the challenge. The other half of product-market fit, finding a market, is what matters most.  

Market matters most.

As Andreessen says:

…assuming the team is baseline competent and the product is fundamentally acceptable, a great market will tend to equal success and a poor market will tend to equal failure… in a terrible market, you can have the best product in the world and an absolutely killer team, and it doesn’t matter – you’re going to fail. You’ll break your pick for years trying to find customers who don’t exist for your marvelous product…

The reimagined editorial department might end up doing great journalism but if it’s not also converting readers to subscribers or delivering eyeballs to advertisers or contributing to other revenue-generating activities, the company’s future will continue to be limited or threatened.

Why would a news consumer elect to visit the Washington Post? The New York Times? Time? Buzzfeed? Vox? Axios. What, precisely, would make that news consumer elect to subscribe to one of them after that visit — and not another? That’s the $54,000 question.

Curiously, many who seek to supplant these “traditional editorial institutions” are stuck, too. The only thing new and refreshing about companies like Vox Media and Buzzfeed is their digital mode of delivery. In all else they approach the market the same way their forebears did. In voice they are tone-deaf, in position they proclaim objectivity, in market definition they are unfocused and in product, they resemble newspapers.

I have a theory. I think they’re trapped because they are led by editors and journalists. They’re well-intentioned people of course, smart too, but they know little to nothing about the business of the news business, about consumer marketing or about consumer product development. They don’t wish to know about such things. I wrote about this deficiency back in 2020:

Breaking the stranglehold on the news

It’s a legacy of the glory days of monopoly, when there was no need for journalists to know or care how the business worked. As Warren Buffett noted in his 1991 letter to shareholders, newspapers were not businesses at all. They were franchises. For years public and private companies alike could price aggressively, tolerate inept management, invest little in the business and enjoy extreme profit-taking.

Those days are long gone.

Journalists can no longer afford to live in LaLa Land. They owe it to themselves – and the news companies for whom they work – to come down from the ivory tower and look hard at what it’s going to take to build new products for new markets in the digital age.

Please don’t be like Bill, and yell at me for pointing out the obvious.

Ancient Persians killed messengers who brought them bad news, say, of a battle lost. It was safer for the messenger to run away and hide instead of doing his job. Based on a few emails I’ve received lately, it seems that Persian Messenger Syndrome is alive and well, albeit in less lethal form. But look, even a cursory look at the current state of news media will make the central point of this post clear.

The same old same old just won’t cut it anymore.  

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And now, the Update:

The usual summary of what I found interesting in the media business since the last time we were together. Might seem a little rando, but each seemed important in its own way. Most have already appeared on BlastofWinter’s FB page – you may want to follow that.

I’m a fan of real football, specifically Futbul Club Barcelona, so it mystifies me that the NFL accounted for 75 of the top 100 most-watched TV broadcasts of 2021. The only non-NFL programs in the top 30 were President Biden’s inaugural address and his first address to Congress https://www.sportico.com/business/media/2022

Just when you found yourself pining for the tranquil 1950s comes news that Gannett is eliminating Saturday print editions at 136 of its daily newspapers. Another ding in the image of a quiet Saturday morning with coffee and the paper while the little woman makes breakfast in the kitchen https://www.bizjournals.com/boston/news/2022/01/12/gannett

Talking of days gone by, remember that thin-paper magazine called Parade that came with your weekend paper? It’s still around. Claims a circulation of 22 million though I can’t find anything about the actual readership. The Arena Group just announced plans to buy it, for $16 million https://www.thestreet.com/investing/arena-group

Leaving the past now, here’s an update on progress over at Axios, the digital newsletter publishing company. In 2021 it doubled its readership to 2.4 million. Claims an open rate of 41%, which is more than double the average. These guys left WaPo, founded Politico and now this. A tip of the hat to them https://www.axios.com/newsletters

The N.Y. Times, a newspaper renowned for its abysmal sports coverage just bought The Athletic for $550 million. An all-cash deal — because The Athletic is deep in the red and doesn’t actually have any cash at hand. Knowledgeable BoW readers will see this as further evidence of the race to vertical markets https://www.bloomberg.com/news/articles/2022-01-06/n-y-times-is-said-to-buy-the-athletic

You’ve come a long way baby. Twenty-five years ago, on January 22, 1996, the Old Grey Lady launched her first website. Many tweeted congrats this week, blissfully unaware of the struggle to get them there. Hats off to my friend and colleague Martin Nisenholtz, who led the effort

Speaking as a guy who was gifted with a tiny piece of Google equity before its IPO, if you get in early enough, it’s easy. Even though Buzzfeed’s 45% stock drop since its December listing has hurt most of its investors, many of the early ones are up 600% or more. Just remember, the earlier you are, the higher the risk https://www.theinformation.com/articles/buzzfeeds {subscription}

So much for the tedious “advertising is dead” theme of the young and naive — ad spend was up 25% in the U.S. in 2021. The digital advertising spend globally hit $442 billion. Search, by the way, now draws a higher investment than all of TV advertising “Drinks” is the biggest ad category. Hey, it’s a pandemic https://magnaglobal.com/global-advertising

Having howled for years that Google violates privacy, now Germany’s largest publishers are calling for the EU to intervene over Google’s plans to decommission third-party cookies. “How else can we track user preferences?” they ask. They should just pay Google for the audience sent their way — and stop the BS https://whatsnewinpublishing.com/german-publishers-oppose-google

Meta aka Facebook is the digerati’s favorite whipping boy, but they take their job of platform integrity pretty seriously if you ask me. Witness their latest threat report on digital surveillance, where they took down five companies for illegal surveillance. Where are the feds in all this, I wonder? https://about.fb.com/wp-content/uploads/2021/12/Threat-Report

In the Windy City, public radio station WBEZ is set to acquire The Chicago Sun-Times. At this news, Marshal Field must be spinning in his grave at 360 revolutions a minute. Big question here — how well will the populist, tabloid-like market of the paper blend with the market of public radio? https://chicago.suntimes.com/2022/1/18/22890454/chicago-sun-times-acquisition

And finally, did you know that Paul Reuter, who founded Reuters, used pigeons to fly the latest news around? Was that the inspiration for Pigeon 605, a personalized news site out in South Dakota? You choose the kind of stories you want the digital bird to deliver. 4,000 people are using it. True story https://pigeon605.com/

That’s it for this edition. As always, thanks for your emails, they keep me warm up here in the Maine winter, waiting out the pandemic. Keep them coming at peter@pwinter.com

Go in peace.