An economic model of what might be about to happen with media


792px-The_New_York_Times_newsroom_1942Following David Sirota’s piece on what is going to happen to journalism once Pando is the only site doing any actual reporting and the entire rest of the media is just collating and social mediaing our work, how about a little economic model of what might be about to happen. Or is happening if you prefer.

I don’t claim that this model captures everything of importance, only that with respect to certain aspects of the changes going on we’ve actually been here before. And the results of that earlier change might illuminate where we’re all going to end up.

From an economic point of view the most significant difference between the US media structure and the European one was that the US had a series of regional near monopolies. Certainly this was true of the newspaper business: yes, SF had both the Chronicle and the Examiner but in general any one big city had just the one major newspaper. This was an effect of the sheer size of the country: newspapers aren’t easy things to ship around a country of the US’s size, not when you’re printing at midnight and people want them at 6 am. Especially so in a country without a decent passenger rail network.

The first real attempt at a national newspaper was USA Today and that came from the ability to send one version to be printed in many distributed printing plants so as to be able to gain that national distribution in the timescale required. And there’s an interesting little point about USA Today that underlines this point. The paper has never really carried anything like a classifieds section of any size. For a decent classifieds section is a market of a paper that serves a distinct geographic region. There’s no point in having an ad to get rid of a baby cot for $ 20 available in Georgia when the cot is in Maine. Thus having a deep and profitable (and boy was a classifieds monopoly a profitable thing to have) classifieds section is a marker of serving one specific geographic location.

So where have we seen this before? In the UK immediately pre-WWI in fact. The rail network went to pretty much all of the country by then, swiftly and reliably (there are still various claims that today’s network is actually slower than it was then, although you have to be careful with your routings to be able to prove it) thus making it possible to print at one central location and distribute to the entire country. You might print in London at 6 pm for the Scottish editions, but they would be in the shops in Scotland for breakfast time. Then print later and later into the night for editions meant for places closer at hand. The important part being that a technological change led us to a truly national press.

One effect of this is that those national newspapers never really did have significant classifieds sections: they remained with the regional and local newspapers as the idea of regional distribution would indicate. The other effect was on how the newspapers competed with each other. Essentially by trying to segment the market.

Some hold that newspapers change the opinions of the people who read the various impassioned pleas about this issue or another. And it’s certainly possible that they do on certain issues. But what the English national papers found is that success is really secured by pandering to the extant prejudices of the readers rather than trying to impress new ones upon them. Thus one of the first things to go out of the window was that objectivity that US newsrooms so pride themselves on. For rather than there being one paper for one city and that one paper desperately trying to be all things to all men, we had distinct vertical markets based upon political (or social, class based even) viewpoints. The editors were chasing one or other of those verticals rather than trying to attract all.

Which leads us to this lovely Yes, Prime Minister point:

That is satire, yes, but there’s an awful lot of truth in it.

I’ll admit here that this is a pretty sketchy model. I’m taking one example of when a system of regional monopolies based upon geographic separation broke down under technological change and applying it, well, I’m applying it to another example of when regional monopolies based upon geographic separation broke down as a result of technological change. I’m arguing that the Internet’s abilities at swift and cheap distribution is akin to that of the railways before World War One in a much smaller country. And arguing that much the same sort of thing is going to happen.

Newspapers, the other parts of the media subject to the same forces, I think therefore will end up doing much the same things. They’ll be, at least the ones that survive will be, transformed into organisations targeting a specific socio-economic slice of the market and will thus become much more political beings. Objectivity as something to be desired will become a great deal less popular and rooting for pet causes, ideas or parties a great deal more popular. For success in this sort of world goes to those who successfully divine and then follow the preconceptions of that socio-economic slice they’re targeting.

This doesn’t make for a worse press by the way, only a different one. There’s less about speaking truth to power than there is ganging up on the enemies in some other socio-economic slice: but that’s OK, it still ends up with the corrupt being exposed, the immoral shamed and all those good things. Just on a much more party partisan basis. Oh, and in language that’s rather more lively: think New York Post, not New York Times.

This applies to the general interest newspaper idea rather than anything else, that’s where the change is really taking place. Another way of looking at the same economic model is to note that the weekly and monthly magazine market has always operated in this way. The mail meant that you could pursue some vertical market on a national scale. That vertical could be a specific industry, a political viewpoint, a certain hobby, whatever. And it is in that magazine market that a thousand flowers have bloomed over the years as people pursue the extant interests of some section of the public with a shared interest.

The argument again is simply that the Internet’s distribution capabilities are enabling that sort of segmentation for daily news rather than weekly or monthly ruminating.

[Image credit: public domain]