Media Deconsolidation (Part 24): I Read the News Today, Oh Boy

by on December 11, 2008 · 20 comments

It almost seems pointless for me to continue my ongoing media DE-consolidation series, which has been an ongoing effort to debunk myths about the media marketplace (specifically, the notion that rampant consolidation is taking place and that operators are only growing larger and devouring more and more companies.) After all, even the kookiest of the media reformistas can’t deny the truth anymore: Traditional media operators are struggling to keep their heads above water, and markets are growing more atomistic by the day, not more concentrated.

The New York Times website seems to run a story per day about traditional media giants falling apart as consumers and advertisers disappear. For those of you with short attention spans, you can even follow the death of old media on Twitter now via “The Media is Dying.” If 140 characters per entry is still too much for you to read, here’s the cribbed version: Lots of downsizing, bankruptcies, and closing of doors. The Tribune’s bankruptcy has been the biggest news this week, but few noticed the amazing statement by CBS Corp. Chief Executive Les Moonves that within 10 years he thinks CBS may dump all its affiliated TV stations and just sell programming direct to cable and satellite operators (and the Net, too). Once other networks take that path, that’s pretty much the end of traditional broadcast local affiliates. (I wonder who the FCC will impose those “localism” regulations on then!)

For those working in the business, the news couldn’t be any worse. As Ad Week reported a few days ago:

The media industries have shed more than 30,000 jobs in 2008, according to an Ad Age analysis of Department of Labor employment statistics and news reports. That’s about 3.5% of the total media work force of 858,000. Since the bubble-inflated high-water mark in 2000, media has lost more than 200,000 jobs.

It’s difficult to have journalism without journalists. Yes, yes… I know all about the blogging revolution, the rise of “mass amateurization,” the wonders of peer-produced “We-dia” (we-media), and so on, but the fact is, professionals matter.  I’m not about to go off on some Lee Siegel / Andrew Keen sort of rant here about the evils of the Internet and digital technology — in fact, I have repeatedly blasted those guys here for their Luddite-ish approach to saving media — but there are some serious questions about how investigatory journalism and local media are going to get funded going forward.

Most media operators are scrambling to adjust but most of them don’t really have any idea what to do. It’s easy for armchair critics to say “get online” and “reinvent your business model,” but most media operators have been trying to do exactly that for some time now, and failing (at least failing to make it very profitable). Even the venerable New York Times, with its wonderful online offerings, is struggling to make digital media work in the increasingly crowded online marketplace.

Regardless, none of this will likely subdue the media reformistas and their ongoing effort to regulate traditional media operators into oblivion. We’re going to spend the next few years bickering over the same old media regulations and new regulatory proposals that dominated the last few years. Meanwhile, as the FCC fiddles, old media burns. I don’t understand why we don’t just tear all the old walls down and give them a chance to save themselves.

  • Tim Lee

    Adam, I think it's important to remember that when cars replaced horses, the buggy manufacturers didn't all become car manufacturers. Most of them simply went out of business. The reason wasn't that the people running the buggy industry were incompetent or short-sighted, it was simply that buggy companies, as institutions, were not well-suited for manufacturing automobiles.

    I suspect the same is true of a lot of “old media” institutions. The optimal media organization in the 20th century was huge and monolithic. Because printing and distribution were centralized and had massive economies of scale, it made sense to have newspapers with hundreds of reporters and thousands of support staff. Now, with the means of distribution radically decentralized, that organizational scheme just doesn't make sense any more. The optimal size for the typical media organization is an order of magnitude smaller than it was last century. And so organizations that were organized around reporting staffs in the hundreds are going to face relentless pressure to downsize. Some of them will disappear entirely. Some of them will undergo radical reorganizations and emerge from bankruptcy as dramatically smaller, leaner organizations. And some may successfully navigate the transition.

    But it's a mistake to equate the health of last century's dominant media firms with the health of journalism as an enterprise. The collapse of big companies like the Tribune Company doesn't necessarily mean there will be fewer professional reporters in the future. Rather, what we're likely to see—what we're seeing already—is a proliferation of new business models for news gathering and dissemination. A big chunk of my income over the last year has come from online news sources like Ars Technica and Techdirt. Ars recently hired Julian as a full-time reporter and editor. And I've got numerous friends working for other web-based publications with a dizzying array of business models and editorial.

    Now, this is admittedly disconcerting if you're used to a world in which a single organization like the New York Times was in charge of dispatching reporters to collect “all the news that's fit to print.” And of course it's wrenching for those reporters who worked at a major newspaper and are now facing layoffs.

    But in fact, there's every reason to think that the forces of spontaneous order will work here as well as it does in other markets. If there are readers who want to read about something, chances are there will also be people who want to write about it. If there's a large number of readers interested in a given subject, someone will find a way to make a living writing about that subject. Markets and spontaneous order work.

    I can't tell you exactly how any particular sector of the news business will work just as I can't tell you exactly which farmers will grow the food you'll eat next year. But I'm pretty darn sure that thanks to the magic of spontaneous order, there will be food on the shelves when you go to the grocery store. And by the same token, I'm pretty confident that when you fire up your browser next year, there will continue to be plenty of high quality news and entertainment available.

  • Steve R.

    Yet another article from the NY Times Where Is the Expedia of Local News?

    With the big players dying, who will take their place?
    Saul Hansell writes “Indeed, the bad news for anyone who actually likes reading about where they live is that no one seems to be able to develop an online version of the local paper–including local papers.”

  • Steve R.

    The demise of the media business seems to be a hot topic, can't even escape it during the lunch hour. CNBC Video Media Buying Binge

  • Elsie M Aiken

    Excellent, entertaining, useful reading, Thanks !!

  • Radar detectors

    Very informative in depth knowledge giving article, I liked it a lot, you are in my rss now, keep going this way! Thanks.

  • Helen Atwood

    your blog is awsome

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