During the
twentieth century news products were widely used, fast-moving
consumer goods. Because media operated in relatively inefficient markets, news organizations
were cash-producing investments with high cash flows that yielded high profits.
Newspapers had asset-heavy balance sheets and excellent equity
positions.
The business drivers of the legacy news industry in the latter
half of the twentieth century were growing
consumption in absolute audience sizes (but declining penetration that most
executives ignored). Companies changed high prices for advertising and set low prices
(or no price) for consumers. They had the ability to self-finance operations
and growth, carried relatively low debt loads (with the exception of a few
firms during acquisition binges in the late 1990s and first decade of the millennium),
and their shares were highly desired by investors.
Those conditions have changed markedly. The emergent
business characteristics are that news is a low-demand
consumer good with niche audiences, producing low cash flow, requiring asset-light
balance sheets, and producing normal rather than excess profits.
Today there is diminishing consumption of news in traditional forms
by audiences and advertisers, increasing prices for audience consumption and decreasing
prices for advertising in many media. Low debt loads have become a necessity and most news
organizations are no longer attractive investments. These changing characteristics and business factors are not a short-term
problem, but represent a comprehensive transformation of the industry.
Compounding these business challenges is
the reduced value of news and information content provided by most news organizations. Fifty years ago, you had to read a newspaper if you wanted to know what the weather was going to be, whether your favorite team won the
match last night, whether share prices of your investments were up or down,
what was happening in the school your children attended, whether the government
was planning to increase taxes, whether the conflicts in other parts of the
world were going to affect you, and what commentators were saying about public
affairs.
Today, we have enormously increased
amounts of news and information available from a wide variety of paid and free
sources. At the better end of the spectrum is expert journalism
in which economists, scientists, bankers, and other cover many topics of
interest and specialized independent journalists and news organizations
that are covering military affairs, social benefits, and corruption. Unfortunately, the overall trend is toward a narrower form of news and information, with reduced
focus on issues, oversight, and analysis, and an inordinant supply of celebrity, sports, and entertainment news.
If legacy news providers are to overcome the content challenges, they will need to rethink and improve the value of content on all their platforms and strive to make their news and information unique. The
content of news organizations will need to be reconceptualized
and can’t just be moved across platforms because each is a different product,
used in different ways by consumers, and needs different types of news and
information to be prominent and presented in different forms.
Of equal importance, news organizations
and journalists will need to interact with audiences in new ways that are outside their comfort zones. This is
problematic because journalism has traditionally had highly paternalistic role
definitions, seeing its functions as educating the rabble,
guiding thought and opinion, protecting social order, and comforting the people.
These definitions combine with professional values
promoting wariness of social alliances and distrust
of sources of information to make most journalists stand separate from the
society and people they cover.
Those attitudes create significance
relevance problems in the digital world because it is networked and collective, based on relationships
and collaboration, and relies on connections built on shared values and
interests, acceptance, transactions, reciprocity, acceptance, and trust. The public is increasingly adopting values
and norms of the digital world and this is creating many conflicts with
journalism.
Journalism
remains firmly rooted in the material world which is based on structured relationships,
privacy and concealment, property, hierarchy, control, and formality. But the
digital world is based on more amorphous relationships, revelation and
transparency, sharing, collaboration, empowerment, and informality.
Consequently many news organizations have difficulties relating to the public
in the digital world and are struggling to adapt.
For news
organizations, adjusting to the new world is not simply a matter of finding new
revenue, moving content to new platforms, and maintaining existing relationships
with the public. It will require a complete rethinking of the roles and
functions of news media, how they fit into peoples’ lives, and where they are
positioned in the new information environment. These are enormous challenges
and need to receive increased attention.
2 comments:
Sir, please accept my congratulations for penning an excellent article. The legacy news organizations would have a future role to play in synthesizing and sensitization of news. It is true that people get news feeds from various media and devices but at the same time the reader today is more confused about the type and the nature of the content. Moreover, the consumer of such news often does not know how she or he can put the information to use. Huge streams of news is being continuously fed to the consumers as the marketers would like to lead, be consumed or directed. I am sure the modern consumer seeks more value from the news and wishes to know whether the news is relevant and would make a difference (emotions, well being) to her or him in their lives. The modern news reader is also a pampered consumer who prefers to receive news feed in digest format, so that they can directly go the section they would like to read. However, this tendency is a short lived phenomenon and often decreases the intelligent quotient of a person. The joy of reading a wholesome newspaper and gathering holistic information is only possible by sifting through the pages of a daily newspaper over a morning cup of coffee. And no electronic media can snatch away that pleasure from the customer. Legacy news organizations would always be in business and the role would shift to more of educating the customer in the future and help them in planning, coordinating, monitoring and balancing their work life / personal life activities. Thank you, Sincere Regards, Sajal Kabiraj, Full Professor, International Center for Organization and Innovation Studies (ICOIS), Dongbei University of Finance and Economics, Dalia, China.
At the better end of the spectrum is expert journalism in which economists, scientists, bankers, and other cover many topics of interest and specialized independent journalists and news organizations that are covering military affairs, social benefits, and corruption.
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