Journalists
like to think of their work in moral or even sacred terms. With each
new layoff or paper closing, they tell themselves that no business
model could adequately compensate the holy work of enriching
democratic society, speaking truth to power, and comforting the
afflicted.
Actually,
journalists deserve low pay.
Wages
are compensation for value creation. And journalists simply aren’t
creating much value these days.
Until
they come to grips with that issue, no amount of blogging,
twittering, or micropayments is going to solve their failing business
models.
Where
does value come from?
Moral
philosophers differentiate intrinsic and instrumental value.
Intrinsic value involves things that are good in and of themselves,
such as beauty, truth, and harmony. Instrumental value comes from
things that facilitate action and achievement, including awareness,
belonging, and understanding. Journalism produces only instrumental
value. It is important not in itself, but because it enlightens the
public, supports social interaction, and facilitates democracy.
Economic
value is rooted in worth and exchange. It is created when finished
products and services have more value – as determined by consumers
– than the sum of the value of their components.
To
comprehend journalistic value creation, we need to focus on the
benefits it provides. Journalism creates functional, emotional, and
self-expressive benefits for consumers. Functional benefits include
providing useful information and ideas. Emotional benefits include a
sense of belonging and community, reassurance and security, and
escape. Self-expressive benefits are provided when individuals
identify with the publication’s perspectives or opinions, or when
they’re empowered to express their own ideas.
These
benefits used to produce significant economic value. Not today.
That’s because producers and providers have less control over the
communication space than ever before. In the past, the difficulty and
cost of operation, publication, and distribution severely limited the
number of content suppliers. This scarcity raised the economic value
of content. That additional value is gone today because a far wider
range of sources of news and information exist.
The
primary value that is created today comes from the basic underlying
value of the labor of journalists. Unfortunately, that value is now
near zero.
The
total value is the value of content plus the value of advertising.
However, advertisers don’t care about journalism – only the
audience that it produces. Thus the real measure of journalistic
value is value created by serving readers.
What
are journalists worth?
Economic
outcomes have traditionally held low priority for journalists. That’s
got to change.
Journalists
are not professionals with a unique base of knowledge such as
professors or electricians. Consequently, the primary economic value
of journalism derives not from its own knowledge, but in distributing
the knowledge of others. In this process three fundamental functions
and related skills have historically created economic value:
Accessing sources, determining significance of information, and
conveying it effectively.
Accessing
sources is crucial because information and knowledge do not exist as
a natural resource that merely has to be harvested. It must be
constructed by someone. The journalistic skill of identifying and
reaching authorities or others who construct expertise traditionally
gave journalists opportunities to report in ways that the general
public could not.
Determining
significance has been critical because journalists sort through an
enormous amount of information to find the most significant and
interesting items for consumers.
Effective
presentation involves the ability to reduce information to its core
to meet space and time requirements and presenting it in an
interesting and attractive manner. These are built on linguistic and
artistic skills and formatting techniques.
Today
all this value is being severely challenged by technology that is
"de-skilling" journalists. It is providing individuals –
without the support of a journalistic enterprise – the capabilities
to access sources, to search through information and determine its
significance, and to convey it effectively.
To
create economic value, journalists and news organizations
historically relied on the exclusivity of their access to information
and sources, and their ability to provide immediacy in conveying
information. The value of those elements has been stripped away by
contemporary communication developments. Today, ordinary adults can
observe and report news, gather expert knowledge, determine
significance, add audio, photography, and video components, and
publish this content far and wide (or at least to their social
network) with ease. And much of this is done for no pay.
Until
journalists can redefine the value of their labor above this level,
they deserve low pay.
Well-paying
employment requires that workers possess unique skills, abilities,
and knowledge. It also requires that the labor must be
non-commoditized. Unfortunately, journalistic labor has become
commoditized. Most journalists share the same skills sets and the
same approaches to stories, seek out the same sources, ask similar
questions, and produce relatively similar stories. This
interchangeability is one reason why salaries for average journalists
are relatively low and why columnists, cartoonists, and journalists
with special expertise (such as finance reporters) get higher wages.
Across
the news industry, processes and procedures for news gathering are
guided by standardized news values, producing standardized stories in
standardized formats that are presented in standardized styles. The
result is extraordinary sameness and minimal differentiation.
It
is clear that journalists do not want to be in the contemporary labor
market, much less the highly competitive information market. They
prefer to justify the value they create in the moral philosophy terms
of instrumental value. Most believe that what they do is so
intrinsically good and that they should be compensated to do it even
if it doesn’t produce revenue.
A
century and half ago, journalists were much closer to the market and
more clearly understood they were sellers of labor in the market.
Before professionalism of journalism, many journalists not only wrote
the news, but went to the streets to distribute and sell it and few
journalists had regular employment in the news and information
business. Journalists and social observers debated whether practicing
journalism for a news entity was desirable. Even Karl Marx argued
that "The first freedom of the press consists in it not being a
trade."
Adapt
or die
If
the news business is to survive, we must find ways to alter
journalism’s practice and skills to create new economic value.
Journalism
must innovate and create new means of gathering, processing, and
distributing information so it provides content and services that
readers, listeners, and viewers cannot receive elsewhere. And these
must provide sufficient value so audiences and users are willing to
pay a reasonable price.
If
value is to be created, journalists cannot continue to report merely
in the traditional ways or merely re-report the news that has
appeared elsewhere. They must add something novel that creates value.
They will have to start providing information and knowledge that is
not readily available elsewhere, in forms that are not available
elsewhere, or in forms that are more useable by and relevant to their
audiences.
One
cannot expect newspaper readers to pay for page after page of stories
from news agencies that were available online yesterday and are in a
thousand other papers today. Providing a food section that pales by
comparison to the content of food magazines or television cooking
shows is not likely to create much value for readers. Neither are
scores of disjointed, undigested short news stories about events in
far off places.
Some
news magazines have confronted the issue and are already changing and
trying to provide unique news content. Newsweek has moved away from
creating a compendium of events to a publication that explores the
issues and implications of events and trends. US News & World
Report has emphasized its consumer review and rankings activities.
Daily
newspapers don’t have quite as much leeway with content but they can
emphasize uniqueness. The Boston Globe, for example, could become the
national leader in education and health reporting because of the
multitude of higher education and medical institutions in its
coverage area. Not only would it make the paper more valuable to
readers, but it could sell that coverage to other publications.
Similarly, The Dallas Morning News could provide specialized coverage
of oil and energy, The Des Moines Register could become the leader in
agricultural news; and the Chicago Tribune in airline and aircraft
coverage. Every paper will have to be the undisputed leader in terms
of their quality and quantity of local news.
Finding
the right formula of practice, functions, skills, and business model
will not be easy, but the search must be undertaken.
It
is not just a matter of embracing uses of new technologies.
Journalists today are often urged to change practice to embrace crowd
sourcing, to search specialty websites, social networks, blogs, and
micro-blogs for story ideas, and to embrace in collaborative
journalism with their audiences. Although all of these provide useful
new ways to find information, access knowledge, and engage with
readers, listeners, and viewers, the amount of value that they add
and its monetization is highly debatable. The primary reason is that
those who are most highly interested in that information and
knowledge are able to harvest it themselves using increasingly common
tools.
Finding
the rights means to create and protect value will require
collaboration throughout news enterprises. It is not something that
journalists can leave to management. Journalists and managers alike
will need to develop collaboration skills and create social relations
that make it possible. Journalists will also need to acquire
entrepreneurial and innovation skills that makes it possible for them
to lead change rather than merely respond to it.
The
demise of the news business can be halted, but only if journalists
commit to creating value for consumers and become more involved in
setting the course of their companies.
Robert
G. Picard is a professor of media economics at Sweden’s Jonkoping
University, a visiting fellow at the Reuters Institute at Oxford
University, and the author and editor of 23 books, including "The
Economics and Financing of Media Companies." This essay is
adapted from a lecture Professor Picard gave at Oxford. He blogs at
http://themediabusiness.blogspot.com/
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