Publishers are searching for a sustainable market. Sustainability for who, exactly?

I was reading a piece this morning on Alan Mutter’s Reflections of a Newsosaur blog.  It’s ostensibly about a new survey that, like many before it, purports to show that people under 40 see little to no value in newspapers, where people 40 and up still retain a certain, if declining, appreciation for the dead-tree media platform.  It’s not a new or surprising conclusion, and it’s not unlike any of hundreds of articles I’ve read over the past few years.  In fact, it’s an argument I’ve largely lost interest in long ago because of the obvious nature of the debate.

Nostalgia for newspapers will still exist for some time yet, particularly among the older set who have used them as a primary source of information virtually their entire lives.  The younger generation, having never been fully indoctrinated in the mystique of the paper, and having been reared on new technology, quite understandably sees newspapers as stale, limiting platforms from a bygone era.  To me, the argument is moot.  Today’s technology, and what is still yet to come, will no doubt end the era of newspapers.  To fight that simple fact is basically pissing directly into the fierce headwinds of progress.

That’s not to say that the organizations that produce newspapers won’t be able, at some point, to successfully transform to fully digital platforms, although it might have been helpful to start that transition a decade or so ago before a lot of the best ideas at the moment were snapped up by tech companies or other independent parties.  But you can’t cry over spilt milk now. 

The part of Mutter’s article that drew my attention was, as is frequently the case these days, the comments section.  One reader quite correctly points out that while the under 40 sampling in the survey seemed to have little use for newspapers in physical forms, the questioning failed to differentiate between print and online news content. While they may never buy a paper, they may also be making use of online content from the very same sources.  An interesting point, and undoubtedly true, but I would argue that even if it is the case, those people might not even realize where the content originated. 

I am as guilty of this as anyone.  I don’t buy newspapers any more.  They don’t play to my interests any longer, at least not in a significant enough way to coerce me to lay down any cash for one.  As I wrote a bit ago, I use Twitter quite extensively these days, and have cultivated a group of people and organizations to follow across a broad spectrum of subjects.  I check it two or three times a day, scrolling through the tweets, opening up any links that seem interesting on different pages in my web browser.  Then I sit down and go through them, reading what in effect has become an individualized newspaper tailored to my interests.  I do this a couple times a day, creating what is, in essence, morning, afternoon and evening editions of the Dan Times, the equivalent of a newspaper made for just me.

There are, unquestionably, articles that appear in these streams that originate from newspaper sites, but frequently, I’d be hard-pressed to tell you which papers.  I absorb the information readily enough, but the source sites slip right on by with very little awareness.  And you know what else slips by?  Any and all ads that happen to be on these sites.  I finished my morning edition just a little while ago, reading in full about 12 articles on a variety of subjects.  I can’t name one single ad I saw on any of them.  Not one, despite the fact that they were almost certainly there in droves. 

The dirty little secret about online advertising isn’t that they’re cheap because of an abundance of space online, it’s that they’re cheap because they are so very easy to totally ignore.  I will never believe that ad-supported online newspapers will work because the ads themselves will never be useful enough to support pricing that makes any sense in the long term.  And if anyone out there is paying high dollar for them, here’s a little free head’s up–you’re getting ripped off, no matter what their elaborate metrics might say.

Now that we’re over a year into the supposed tablet revolution, there does appear to be some positive signs for publishers.  As tablets are proliferating, and getting cheaper almost by the day, there have been reports that revenue generated by publishers is increasing.  This is probably one of the more optimistic signs I’ve seen in a while that an actual sustainable model for publishing can be found and is, in fact, possible.  The problem, though, is sustainability for who?

I’ve long held that the market for paid digital content for publishers won’t really kick into high gear until there’s a somewhat platform neutral device in the $100 range or less.  These devices need to become ubiquitous in everyone’s homes, and they need to be as open as possible.  The iPad is a very nice piece of equipment, but it’s too expensive and it’s too locked into it’s own little world.  I have two ebooks available for sale in the ibookstore, but lacking the device, I can’t even see the listings for my own books, let alone buy one.  That’s a big problem, one that Apple may not care about at the moment, but it’s a hindrance to reaching customers that will be an issue over the long haul.

Amazon exists in a somewhat locked down world as well, but they are driving device prices in the right direction for market saturation.  The new Android-based Kindle Fire tablet will debut later this year at $199. Still not the fully platform neutral device we need, but it’s closer to that magic $100 price point.   On top of that, they’re dropping the price of the base-model Kindle ebook reader to only $79!  To me as an ebook publisher, that is extraordinarily good news.  It is an ad supported model, which can be an inconvenience, but the ad free version will still be only $109.  Keep in mind, this is the start of a race downward in price.  I am more certain than ever that, as the market for digital content matures, standards will open more and prices will drop into the range where every home, hell, every individual can have one without having to save up to do so.  The movie industry has made loads of money on dvds, and the means for doing so was greatly helped along by cheap, widespread dvd players.  The device is great and all, but it’s the content itself where the real money is to be made.

All this brings me back to the notion of sustainability.  When, and indeed if, digital content brings in real money for publishers, where is that influx of cash going to go?  Will it return writers, designers and content creators to living wages again, on the whole?  Or will it be used to support the corporate infrastructure and exorbitant management salaries?  Take Gannett, for instance.  Their CEO Craig Debow is stepping down due to health concerns. Now, I do wish him well, I don’t want to criticize someone suffering from health issues, I wouldn’t wish that on anyone.  But he’s walking away from the company with a $37 million good bye check.  I’m sure all the former Gannett employees who lost their jobs to the massive cost cutting of Debow’s tenure are thrilled that he’s receiving such a generous going away present.

That amount of money would pay 1,000 writers $37,000 salaries, or pay 250 writers that same amount annually for the next four years.  Isn’t there a better use for resources in what is, at it’s heart, a content company?  I’m not saying he doesn’t deserve anything, but for a guy who’s base salary was $1.2 million, and who has already collected millions in stock options and bonuses over the past five years, that seems really exorbitant.  Most people are lucky if they get a couple months pay leaving a job, Debow’s collecting 30 years worth of his base pay. 

The popular conservative mantra these days is that if the corporations are doing well, its employees will benefit from that.  That argument had merit at one point, but in this day and age, any objective long-term analysis is going to show that corporations have been improving their bottom lines at their employee’s expense for quite some time now, long before the recent economic downturn.  So the question remains, will digital revenue create sustainable models for content creators or for the organizations who have been, and will continue to exploit them?

If the creators benefit, then this can be good for everyone.  If only the organizations benefit, it’ll be good for almost no one.  Except of course, for CEOs who can preside over nearly $2 billion in annual revenue declines over five years and still walk away with a one-time parting gift roughly 20 times more than most of us will see from an entire lifetime of work.

Sustainability is great, and what the industry should certainly be striving for, but we need to make sure that what gets sustained by our money as consumers in the future is truly the most deserving of it.


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