Thursday, January 8, 2009

How to save the Times, continued

For those interested in the continuing reactions to Michael "The Times as we know it will no longer exist" Hirschorn's piece in the Atlantic, discussed here yesterday, there has been considerable buzz, including these:

Citing flaws in Hirschorn's arithmetic, Rick Edmonds at Poynter reassures: "It all may come to pass within a decade or sooner. Not, however, at The New York Times in May. " He says that the Times can easily deal with the $400 million credit line it needs to pay off in May (while having $46 million in the bank recently) by, in effect, kiting credit cards—using untapped portions of its lines of credit to pay off the balance due.

Realistically, the banks are likely to frown on that notion, and are undoubtedly pressuring the company to come up with cash in other ways, such as selling their stake in the Red Sox and doing a sale-leaseback on its spiffy new building. Failing those tactics, as Edmonds says, lenders will be willing to renegotiate terms, but that comes at a price—in fees, in future interest rates, and in future financial flexibility.

And at Venturebeat, Chris Morrison has a long reaction of a different kind, entitled "If the New York Times dies, does the news die?" exploring how long-form analytical and investigative journalism can be paid for in an online-only news environment. He debunks some of the usual answers, and suggests (in line with a news industry disaggregation model others have proposed):
[W]hat healthy news organizations should really be offering this new breed of capable writers [self-supporting reporters and bloggers] is a sort of insurance against unsuccessful articles consisting of an up-front payment for any piece of writing. The rest of the writer’s income should come from performance earnouts — another formula that is yet to be mastered. Keeping it to those basics would be a radical change from the wage-based compensation model of print, along with its sprawling hierarchy of editors and publishers, costly offices, expense reports and support staff. When that world meets the internet’s stripped-down operating model, there may well be money for good journalism again.
Morrison points out that contrary to pessimistic perceptions that the audience is "dumbing-down," demand for top-quality content is actually growing. He cites an analysis called "The Age of Mass Intelligence" by John Parker, which is worth a read.

Supporting good journalism in that fashion is an excellent idea (even if the formula is "yet to be mastered" or even invented), and it's totally consistent with my view, detailed yesterday, that the Times, the San Francisco Chronicle, and by implication every struggling metro market paper should abandon incremental change and get on with reinvention. It would be short-sighted for the Times to simply reshuffle its debt structure without exploring a bold, transformational, reinventive step, like melding its seven printed editions into one great weekend "guide to everything" package, along with continued reinvention and improvement of its already great online operation.


dr droock said...

Thanks for the post. I followed the link and found this sentence, "The Times, obviously, is good at long-form, in-depth pieces for an educated crowd."

I would argue that the web is just not the media for the long-form, in depth piece. The right media is print. And probably the best media is a paperback book and soon an ebook.

Has there been any discussion that you know considering the option of publishing those great long form articles in the form of books, that are available in a timely fashion.

It's true that educated public is growing, but the reality is that it's still a niche market.

In your opinion, is there a way that the Times could earn enough with books that are sold to get off the advertising business model.

I'm thinking K-12 education market.

Martin Langeveld said...

Dr. Droock:
Actually, the New York Times does publish books; just have a look at what they offer via the New York Times Store.

But books publishing is itself challenged by the advent of e-books and by the diversion of reader attention to the web, so books alone could not possibly get the Times off an advertising model. Annual US book sales in 2007 were around $38 billion; the Times Company's advertising revenue that year ran $2 billion. So to replace advertising with book sales, NYTC would have to capture more than 5 percent of the book business, and then run the book business at the same gross margin as their advertising. And to get to that level of book sales, it would have to capture the No. 6 or 7 slot among US book publishers, a tall order.

And most of what's written as a long-form news piece is not particularly useful or interesting in book form without much rework, especially for the k-12 market.

Your feel that the "web is just not the media for the long-form, in depth piece." But the web is not a medium, it's a delivery method, like your mailman or paper carrier. Computer screens, paperback books, e-books are media. We haven't got a terrific electronic device for reading—the equivalent of the iPod for music—but it's coming.