The open web is good. Search engines are good. Aggregators are good. And newspapers CAN monetize the audiences they develop by providing community and utility.

The problem is Wall Street — the margins HAVE to be lower if you want to do public-interest reporting.

You can be commercial and do travel, sports, entertainment, style and “business” (i.e. conventional capitalism) coverage. And if coverage here declines or is affected by the vicissitudes of the commercial market, it won’t be a huge problem because it’s already skin-deep and half brain dead (Octomom! etc.).

But you pretty much CAN’T be commercial and do serious public-interest reporting, UNLESS Wall Street is willing to drop the margins to a lower, lower, lower level.

Since that won’t happen at the conglomerate level, there needs to be aggressive efforts to develop a real public-media infrastructure.

This brings up my own work with Newsdesk.org. Basically, all this flailing and failing on the commercial-news side is just pure opportunity for the nonprofit producer to do something SMARTERFASTERDEEPERBETTER, on a much lower, and tax-deductible, margin.

Newsdesk.org plans to exploit this vulnerability in the business model by selling to commercial outlets the public-interest coverage they need at rates the AP can’t beat.

Hope it works. But the basic principle is, their loss, my gain.

Maybe we won’t be looking at the same scale of industry. But then again, maybe journalism needs to be a widespread practice, like lawyering or medicine, rather than a concentrated industry in the factory-production model.

josh w.
newsdesk.org

If it costs money to produce quality journalism and not enough is coming in to do so at a reasonable profit, then as a business, why bother?

A bigger question flowing from that, and one that gets ignored in this debate, is “what’s a reasonable profit?”

Many monopoly papers had operating margins of 25% or higher.

Much of the cutting in recent years was done to prop up high margins to pay off debts accumulated during highly-leveraged acquisitions.

Now, when the dust has settled from the combined pain of the recession and the ill-advised business deals that preceded it, what can be done to economically ensure the same (if not) better quality of journalism — but at a lower cost?

Online distribution is cheaper, but newspapers produce more revenue and higher margins.

That brings us back to my initial question: What’s a reasonable profit level at which a newspaper can still produce a socially useful product?

Philip Meyer, author of The Vanishing Newspaper, has suggested it could be done with operating margins of seven per cent.

Question is, will the owners of newspapers be happy with lower profits? If not, does that logically lead to the suggestion that what the newspaper business really needs is a new ownership model as much as a new business model?

Some thoughts to ponder.

I debunk the implication that newspapers consumers pay for content with their subscription fees. We don’t – we pay for delivery (maybe). Subscription revenue doesn’t pay the cost of newsprint (on average, based on date in Media Economics). Grumble, grumble, grumble.

That’s not to say that news organizations don’t need a new business model. They do. Just like Every Other Institution challenged by the move from scarcity to “abundance” (head nod to Chris Anderson).

But the business model failure is not the fault of subscribers.

I do, however, take issue with suggesting today the citizenry is more engaged and better educated on the issues. I wonder if that’s true. The Internet age has also come about with declining newspaper staffs, which continue to dictate what stories and coverage is had. That may mean less coverage on the big important stuff and more coverage – by citizen journalists – on the less important. That is, yes it’s cool that Twitter uses Tweeted the California fires or the Hudson River landing of a plane, but that news doesn’t really improve or better engage a citizenry.