The News Business Is Broken in the Digital Age – If You’re an “ee”, Not If You’re an “er”

Via Tim O’Reilly’s blog I come across San Francisco Chronicle publisher Phil Bronstein, predicting layoffs and saying the news business “is broken, and no one knows how to fix it… And if any other paper says they do, they’re lying.”

Meanwhile, according to a Zogby Poll I find in the Financial Times, “Newspaper editors are overwhelmingly optimistic about their businesses, despite uncertainty about future business models, according to a new global poll of newsroom attitudes to the rapidly changing industry.”

Which is it? Both, I’d say – it depends on whether you’re an “er” or an “ee”.

As with other media businesses, digital technology is a big opportunity for employers, and a big threat for employees. Mostly because the former won’t be paying nearly as many of the latter.

Dave Winer, at his scripting.com) blog, has a provocative prediction of the future of a news business based on citizen journalism:

…journalism should become a required course, one or two semesters for every graduate. Why?… In the future, every educated person will be a journalist, as today we are all travel agents and stock brokers. The reporters have been acting as middlemen… As with all middlemen, something is lost in translation, an inefficiency is added.

You could say the same about music, film and any other business that can be disintermediated digitally.

Among the technorati, the default response to this process seems to be optimism. I can see why (and I share some of it): we’re experiencing a massive wave of democratization at the same time as a huge increase in productivity. Especially for the many geeks who have a libertarian streak, this goes straight to the sweet tooth. If you complain that the “inefficiencies” being eliminated are people, the quick response is the “buggywhip maker” argument: Why should we hold back progress and prosperity to protect outmoded jobs?

But it seems to me that democratization and gains in productivity, because they’re so dramatic, are blinding optimists to the effects of a third phenomenon: massive transfers of risk.

All businesses are essentially risk models: Managers devise ways to package risk in a way that they can sell for a profit. If I’m running a news business, my risk model used to be that I was taking a lot of upfront risk in paying reporters, editors and others to find and prepare the news, which I could resell to advertisers, subscribers and news stand customers. But if I can now get citizen journalists to contribute content for free, I’m transferring my upfront risk to them. My business’s risk model is now very different. I aggregate free content, use it as the seed of a community, and sell advertisers the community.

So what’s the problem? For one, the exploitation inherent in offloading risk onto a crowd of individuals, no one of whom is fully equipped to take it on, and few of whom are compensated for it. Photo journalist Sion Touhig wrote a powerful piece on the human costs in The Register a while back. Sample quote:

We’re continually being told the Internet empowers the individual. But speaking as an individual creative worker myself, I’d argue that all this Utopian revolution has achieved so far in my sector is to disempower individuals, strengthen the hand of multinational businesses, and decrease the pool of information available to audiences. All things that the technology utopians say they wanted to avoid.

And I think there’s a potential cost to all of us, regardless of whether our jobs are affected. That’s because the risk traditionally taken on by news organizations includes the potentially huge liability involved in performing an essential service to democracy: investigative reporting. By “investigative” I don’t mean gossip & gotchas or clip jobs, I mean developing sources, interviewing experts and poring through references, files and databases.

Citizen journalists can probably learn how to do this (and now that I think of it, that’s another reason for the geek appeal of disintermediation: the endless seductiveness of learning new stuff!). But how many actually will do it, or even should? As a citizen journalist, do you really want to take on a story on the scale of Iran-Contra, Enron or Plamegate? Can you muster the thousands of hours, and face the gigantic legal – or even physical – risks?

Certainly not as a lone citizen journalist. That risk that’s floating around loose still needs to be packaged in some way, or else it just floats off over the horizon. And then we don’t have investigative journalism any more. Some “ers” may welcome that, too. But I believe it’s a big problem for all of us, since we are all “ees” at one time or another. So if we’re going to open up journalism by sharing access to publication, I think we need to start looking for some new mechanism for sharing the risk.

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