TCS Daily

Symbiotic Media

By Glenn Harlan Reynolds - October 16, 2002 12:00 AM

It recently came out that the New York Times had more readers for its web edition than for its print edition.

This produces both good news and bad news. The good news is that the web readers don't seem to be costing it any dead-tree readers. The bad news is that this probably won't make the Times much money. (My own weblog gets roughly one-thirtieth the traffic of The New York Times - but if the Times had to live on thirty times my earnings it wouldn't even have enough money to pay the fees in bankruptcy court.)

Lots of people have been wondering about how online journalism can make money, and I notice that the issue is particularly urgent to journalists who interview me about weblogging. It may be, as Clay Shirky has argued, that it's fundamentally impossible to make money on the Web. (Though Henry Copeland reports that NY Times Digital is in the black.)

I don't know the answer to this question. I've been encouraged - especially by journalists - to try to work out models for turning a profit with a weblog: selling ads, charging people for the right to post comments, or even charging people to send me email - an idea that might be worth pursuing just to reduce the clutter of my inbox. I don't think that I'm the guy who's going to show the way to web profitability, though. If I were smart about money, I'd still be practicing law for a Wall Street law firm instead of working as an academic.

But while weblogs may not be lucrative, they're very powerful and - as Nick Denton has pointed out, they're very cost-effective. My traffic is (depending on how they count it) about one-thirtieth of the Times' website, but I feel sure that my costs are much, much less than one-thirtieth of theirs. Which raises the question: what if it really is almost impossible to make money on the web, but so cheap that practically anyone can afford to have a Web presence?

Actually, forget the "practically" part - and, for that matter, the "what if" part. Pretty much everyone agrees that making money on the Web is damned hard. And it's true that practically anyone can have a Web presence - there's even a homeless guy with a weblog (called, straightforwardly enough, "The Homeless Guy.") And with even fairly high-volume webhosting plans available for ten or fifteen dollars per month, (here's the page for one outfit I know; I'm sure there are others in the same range) the barriers to entry are pretty damned low.

That barriers to entry are low means that competition is likely to be strong. If competition is strong, there is likely to be stiff downward pressure on prices. But, of course, competition isn't strong everywhere. Though webloggers do actual reporting from time to time, most of what they bring to the table is opinion and analysis - punditry, in short. (No surprise here - people have been sharing opinions forever, and may well have an inborn drive to do so. Plus, you can opine without leaving your computer, while reporting hard news is hard work.)

This means that Big Media organizations should still have a strong competitive advantage where actual newsgathering is concerned. The problem is that most big organizations have cut back on newsgathering, treating news as a commodity product to be obtained from wire services while eliminating foreign and regional bureaus. Instead, Big Media organizations decided some years ago that they would focus on "news analysis" and punditry. That's, well, because you can opine without leaving your computer, while reporting hard news is hard work. (And expensive).

Unfortunately, this hasn't worked out very well. The move to analysis and punditry was driven, in no small part, by corporate pressures to cut costs, pressures that accompanied the consolidation and corporatization of the news media. But the very environment that produced those pressures made it harder to produce good, and interesting, opinion: the hard-drinking, wise-cracking Lou Grant archetype has been replaced by graduates from a very small number of elite schools who tend to play it safe and share the same views. That, plus the don't-offend mindset that always goes along with corporate life, doesn't make for interesting commentary: Amateurs, under no such constraints, can do better and already often do. So it may be necessary to reverse this trend, and for Big Media organizations to put a higher priority on actual reporting out of simple economic necessity.

I've noticed that when journalists interview me about weblogs and the future of media, they seem very worried about the economics of journalism, but tend to brighten up when I make this point. And they should. Professional punditry is in for some hard times: people have figured out that it's not that hard to do, and the supply of would-be pundits probably exceeds the demand. I know that I tend to turn to weblogs for insight and analysis far more often than I turn to the op-ed pages of the Times and the Post these days, and I think you'll see more people doing that over the next few years. But actual information about what's happening is still mostly the province of professional journalism, and that's less likely to change. I can imagine a decentralized amateur news service (a sort of Slashdot on steroids) but I think something like that will be slow in coming. (Outside the hard-news world, though, this is already happening with sites like BlogCritics and The American Times.)

So as I see it, the economic upshot is that big publications like the New York Times will feel competitive pressure to do more of what they do best: reporting actual news from around the world. Meanwhile the buzzing, humming, done-for-love-and-not-for-money Blogosphere will provide an increasing share of the analysis and criticism. The result will be a kind of symbiosis that may leave both sides better off.

Am I an optimist? Yeah. But I'm also likely to be right.



TCS Daily Archives