February 22, 2019 / 3:25 PM / a month ago

Breakingviews - Review: Old news guard beats back the grim reaper

NEW YORK (Reuters Breakingviews) - From venerable newspapers to upstart challengers, news organizations are getting clobbered by Alphabet’s Google and Facebook. In “Merchants of Truth: The Business of News and the Fight for Facts,” Jill Abramson effectively draws upon two digital newbies and two well-known media brands to illustrate that the path to survival lies in signing up subscribers. The old guard, however, is better equipped to fight back.

Jill Abramson, former Executive Editor of the New York Times, gives the commencement address at Wake Forest University in Winston-Salem, North Carolina May 19, 2014. REUTERS/Jason Miczek

The former executive editor of the New York Times has been getting a fair amount of attention since her book was released, though not the kind she intended. The author stands accused of swiping passages from other people’s work. Her former job, the book’s grandiose title and the decision to model it on one of the bibles of journalism - David Halberstam’s “The Powers that Be” - make her a big moving target. Abramson’s recent apology tour has become a media circus. During a mea culpa interview with Rolling Stone, the reporter whom she allegedly plagiarized admitted he had not read the book.

The controversy distracts from what is otherwise an engrossing portrait of the existential crisis gripping the news business and its relentless search for new sources of revenue. Abramson divides her tome into three parts devoted to four organizations: BuzzFeed, Vice, the Washington Post and the Times. The most interesting sections encompass the latter two, perhaps because it’s the world that Abramson knows best. She was at the Wall Street Journal for almost a decade and then worked her way up to become the first woman to lead the Times newsroom until she was abruptly fired in 2014.

She readily admits to her shortcomings. These include failing to bring up her salary after publisher Arthur Sulzberger Jr. gave her the job: Abramson mistakenly assumed she would be paid the same as predecessor Bill Keller. (The Times disputes this.) She regrets not asking for the management training others in her position received. “I was well aware that I was not universally popular,” she writes. “I was seen playing favorites and as being overconfident of my opinions. I had a bad habit of cutting people off and didn’t listen enough. In short, I was seen as ‘pushy.’”

The explosive Times Innovation Report, commissioned to take a hard look at the paper’s digital efforts, was a stinging criticism of her attempts to transform the paper, she writes. Led by Sulzberger’s son Arthur Gregg Sulzberger, who would eventually succeed his father as publisher, it was sharply critical but necessary.

Fear and loathing are reflexive responses to the internet among newspaper operators. Abramson lays them out in full. Publishers for decades argued about the merits of erecting paywalls, dismissing the early digital subscription models of the Wall Street Journal and Financial Times as suitable only for business-oriented audiences. Digital advertising was in vogue: the bigger the online audience, the bigger the potential pot of revenue. It has since dawned on publishers – new and old – that ad dollars won’t sustain a news operation.

The missed opportunities were on display at the Post before revered owner Donald Graham sold it to Amazon founder Jeff Bezos. Around 1992, Graham passed on the chance to start an electronic classified site, allowing Craigslist to siphon off an important stream of revenue. In 2003, Managing Editor Steve Coll tried to persuade his boss to focus on national and international audiences. But Graham preferred to listen to shareholder and trusted family adviser Warren Buffett, who didn’t think there was enough room in the market for both the Post and the Times, and suggested focusing on covering Washington, D.C.

Then two upstarts scared the living daylights out of the established players. Jonah Peretti’s BuzzFeed and Shane Smith’s Vice were built on the premise they could attract young, cool audiences with viral listicles and edgy videos, which in turn would entice advertisers eager to reach this elusive audience. Both built newsrooms to burnish their legitimacy and nab even more dollars. For a hot second, it worked. At their peak, BuzzFeed and Vice claimed respective valuations of more than $1 billion and $6 billion.

Just like their older counterparts, though, the upstarts have since been schooled in two hard lessons: Journalism is expensive and advertising revenue is fleeting. Both have missed revenue targets. Vice is now slashing 10 percent of its workforce while BuzzFeed is shrinking its ranks by 15 percent. Yet they remain exposed. Research outfit eMarketer projects that Google and Facebook will grab more than half the estimated $130 billion U.S. digital advertising market this year. Throw in Amazon and the proportion reaches nearly 70 percent. Online publishers have to scrap for the rest.

Paywalls offer a more reliable source of revenue. Abramson notes that both the Times and the Post have successfully tapped readers’ pockets. That’s an easier sell for robust newsrooms which produce quality journalism, especially given growing awareness of the dangers in free online news. BuzzFeed and Vice may be compelled to study the business model. The worm has turned.

Breakingviews

Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.


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