What happens if the Newspapers fold?

Fascinating article in the New York Magazine about the things the New York Times is doing to deal with the impact of online media, and its a fascinating read of a skunk work startup in a corporate news media company. One comment struck me:

Print is just a device. The New York Times is not just a newspaper, it’s a news organization.” For those who believe these changes are gimmicks, he has no patience: “This isn’t a storm! This isn’t something that’s going to pass! It’s the ice age. People aren’t going to suddenly open their eyes and we’re back in print.

But true though that is, as e-Consultancy notes, it is not enough to guarantee survival:

The $64,000 question, of course, is whether or not newspapers will be able to transition to an online-centric format profitably while maintaining a high level of quality. As we've reported before, despite the fact that newspaper websites have done well traffic-wise, the revenue side of the equation is still problematic.

Thus, for an online transition to succeed, newspapers will have to face the challenge that all online publishers face - how to produce content that drives monetizable traffic for less than the amount of revenue that content brings in.

And right now, that equation doesn't add up - the New York Times is having to go to to great lengths to make money, even advertising on the front page for the first time in 160-odd years. Other papers are folding or for sale. So what happens if all the papers fold? Its a very real prospect.

For classified advertising, no worries - it all goes to the digital equivalents of Loot, like Craigslist et al. For the "Society" sections, no worries - there is all the fluff you will ever need on the 'Net. But what of factual news reporting, when all the investigative journalists are fired. Can "Citizen Journalism" take over?

Optimists say yes, I'm not so certain.

Given that a huge amount of news blogs function mainly to comment on news that is originally driven by the main papers (and even many of the blog majors like the Huffington Post use this quite a bit) it would seem that much of online media may have killed its host, and in turn die out when it goes.

And given the two-orders-of-magnitude lower revenues of online news media, who exactly will then be paying for those smart, investigative journalists? The answer appears to be PR agencies - journalists are leaving news media and re-appearing in PR organisations. Its an open secret that more and more "news" is just PR story placement.

So when the newspapers fold are we looking at a no-news world, where all we get online is fluff, PR spin and the endless banging on of noisy bloggers who know nothing?

Interestingly enough, one of the NYT team mentioned above, David Carr believes there is a solution - an iTunes for news:

Is there a way to reverse the broad expectation that information, including content assembled and produced by professionals, should be free? If print wants to perform a cashectomy on users, it should probably look to what happened with music, an industry in which people once paid handsomely for records, then tapes, then CDs, that was overtaken by the expectation that the same product should be free.

Mr. Jobs saw music as something else — as an ancillary software business to generate sales of the iPods and iPhones. That’s not a perspective that flattered people in the music business, but it did persuade listeners to pay for their wares.

Naturally, the Citizen Media crowd immediately pooh-poohed this:

But the real fallacy in Carr’s delusion is that a news story or an opinion, like a song, is unique—that you can’t get it somewhere else and so you have to buy the original. If I can’t get Allentown, the original, I’m not likely to settle for a cover. But if I can’t get Carr’s column about wishing for micropayments, believe me, I can go elsewhere and find plenty more columns and blog posts just like it.

But to them I'd say that their alternative - the free for all - is unsustainable, we have proved it will be unlikely for video and suspect it is also true for print media. As industry analyst Craig Moffett points out in the Carr article:

“Free is not a business model,” said Mr. Moffett of Bernstein. “It sounded good and everybody got excited about it, but when you look around, it is clear that is creating havoc and will not work in the long term.”

The "Citizen Media" world is in our view an unsustainable world - running businesses with skeleton staffs of poorly or unpaid bloggers (or worse, scraping their output) and attempting to pass that off as quality journalism may fool most of the people for awhile, but neither the unpaid content creator nor the reader can survive for long in such an environment. And unlike other media, there is not a back-catalogue of artistes work to pilfer. At some point the need for real, true news will re-emerge - the advantages of having it while everyone else is losing their heads in UGC are too great to forego.

For this reason, we suspect that trusted parties with curated media will start to re-emerge - and for that people will have to pay - and will. Whether its an iTunes model or not, at some point cash will flow again.