Everything You Need To Know About The Disaster In American Journalism

Economic models really do matter, yes

The latest from the battlefront of American journalism:

The WSJ laid off many of my friends, colleagues and editors in the DC bureau today. These are some outstanding, seasoned, expert journalists who helped us do great work. If you’re hiring, there are some excellent folks now on the journalism job market in Washington.

One possible reaction is “Oh Dear, never mind”. Not wholly and entirely sour grapes from someone - me - who has been laid off from every American journalistic gig I’ve ever had. Including being fired from Forbes for being too free market for them. Not entirely, note.

The latest attempt to explain this ongoing disaster includes this joyousness:

It’s the same old story, only worse. Since the 2020 presidential election, Facebook has steadily reduced the amount of news that users see in their feed, wiping out a major source of traffic and, as a result, ad revenue.

Less news on Facebook reduces ad revenue to newspapers. OK. Reasonable assertion.

The decline of the legacy news media has been playing out for decades, exacerbated most recently by the advent of the internet and the explosion of digital platforms, especially the ad-revenue-gobbling tech giants Google and Meta.

Also, Meta (which, of course, owns Facebook) takes all the advertising which properly belongs to newspapers by allowing news to be placed on its site. That could also be a reasonable assertion.

But trying to hold both ideas in the head at the same time - assert both in the same article even - is a little difficult to sustain. But then American journalism never really was the home of those trained in logic, or even numbers. Wordsmiths were what was wanted and wordsmiths was what it got.

So, as a little corrective, a quick jaunt through what actually ails American journalism. The concentration is upon the big newspapers because that’s where the problem is worst. The conclusion is that it’s gonna get a lot, lot, lot, worse too. Because the industry is facing a base economic problem that it’s not willing to actually face up to. Or, at least, all the journalists writing about it aren’t - there’s the occasional sign that some of the business side of the equation grasp it.

To set the scene, think before 2,000 AD (I cannot stand the affectation of calling it “common era”. It’s still the misdating of Jesus’ birth that we’re using as the definition of common so why not go the whole hog of Anno Domini?). It wasn’t quite and exactly that date but we’ll simply declare that it was.

Before Y2K American newspapers were segmented along geographic lines. The size of the country, the lack of a long distance passenger railroad network, meant that this was just so. If you’re printing a daily paper then you’ve got to deliver it daily. On the day it’s meant to refer to as well. If Chicago is 1,100 miles (no, I’ve not looked it up but that’s within an order of magnitude of being right, which is better than many newspapers manage with numbers) from New Orleans then the same newspaper is going to find it difficult to print and deliver to both markets. Add in the fact that trains take a week to traverse that distance, passenger trains - anyone who has ever travelled Amtrak will say it feels that long at least - included.

You could not and therefore did not have national newspaper (USA Today, with satellite printing plants, was an attempt to deal with this and slightly earlier than our cut off date but doesn’t change the basic story) distributions. What you had was a series of local and regional monopolies. Each one centred on a large population centre and serving the area around it that could be reasonably reached by truck overnight. Chicago and Cincinnnati, not 1,100 miles away from each other, did have entirely different newspapers.

By contrast, and just as an example, the British newspaper market was national from pre-WWI. We simply did have overnight at worst passenger rail that covered the country. Partly it’s a much, much, smaller place, partly the passenger rail system was just different. So, printing overnight (and some maintained separate Scottish editions and plants) meant that those papers that came off the press in London at 8pm were on sale in Glasgow at 8 am, those that came off the press in London at 4 am were on sale in London at 8am. That’s not exact but it’s a good enough pencil sketch.

Cincinnati newspaper(s) served Cincinnati. Chicago, Chicago and New Orleans the area of New Orleans. There simply wasn’t a “national press” in the US in that British sense.

OK. But this also meant that American newspapers were much more like a monopoly in their local area than anything else. Network effects still exist even before computer networks after all. The most important of which was the classifieds.

As with Facebook, we’re all on Facebook because everyone else is on Facebook. So, if we’re to join a social network we’re going to be on Facebook where everyone else is - except those three hipsters who are where it isn’t cool yet. This applies to classifieds sections. Folk advertise in the one with the most readers, the widest market. Readers buy the one with the most ads in it, the widest market. You advertise the bronzed baby shoes, unused, where there are the most people looking for bronzed baby shoes, unused.

So, the dominant paper will suck up the classifieds in any particular market. Classifieds, fairly obviously back in the days of prams, cheap used cars, waiters’ jobs and so on being geographically based.

No, this is important. A useful pencil sketch of American newspaper revenues pre-Y2K was that subscriptions produced some one third of revenues. They also, around and about, covered print costs and distribution. They were, roughly you understand, about a face wash in fact.

Display ads produced another one third and classifieds the final one third. Classifieds were also wildly profitable - no expensive journalists to pay, no bureaux, just a few women waiting to get married on the end of the phone line.

As monopolies always do end up American newspapers were also wildly overstaffed. Partly in the sense of simply having too many layers of editors and journalists. Stories from British journos who have had pieces printed over there/here are legion. Boris Johnson did a very good and funny one about an NYT piece - he couldn't believe the levels of fiddling with the prose that went on. I - less funnily and the story told with less skill - once did a 500 worder for the Washington Post. I seemed to end up with three different editors all sending me corrections in Word. Not that I know how to use Word, but that the corrections all seemed to be contradictory amused. They also seemed to be having a conversation among themselves about commas and the like but one that I was supposed to have an opinion about. In the British press this is something dealt with by a single subeditor in about 10 minutes. “I’ve made these changes according to house style, shut up” about sums up the process.

Those American papers were also wildly overstaffed in the sense of there being 100 Washington bureaux. OK, an exaggeration, but you really did have the Chicago paper, the near to Chicago paper, the a little further away from Chicago paper and so on all with their own teams in DC. Vast news gathering teams doing little more than repeating each other to each other.

Finally, you had that cultural cringe of objectivity. Because they were the only major paper in any place there was this idea that they should be impartial. Objective. Trying to not upset the applecart with any actual opinions on anything because that would give an opportunity for some upstart to steal the classifieds section.

Or, as also happens with any monopoly attempt at objectivity what became the truth that everyone knew was the basic accepted view among the journalistic classes. A largely soft Democratic and in the American sense liberal worldview. Intellectual diversity was not a thing in American big city newspapers.

Display ads kept the show on the road, to an extent. But the thing that allowed grand, fat, staffing and maintained the intellectual monopoly was those classifieds sections.

Time and technology have changed. Sure, we are only going to get local Chicago news from a Chicago paper, local Cinncinatti and so on. But that national news? Available - at minimum - on 100 different major city newspaper sites. Geography has, in this sense, been killed.

So too have the network effect of those classifieds. The jobs ads are all on Monster, the cars on Autotrader, houses on Zoopla, the bronzed baby shoes in short stories and local gifting groups. That one third of revenue, much more of operating profit, has gone and it’ll never be recovered. Display ads are still there. Subscription revenue, well, that was pretty much a facewash with the costs of physical distribution.

America just isn’t going to support 100 major newspapers all trying to do the national news. That means that all those journos who used to repeat the same stories from their owned bureaux to the local monopoly are simply shit out of luck. Exactly what is in fact happening.

The old model is dead, 100 versions of the same old worldview just won’t do it. Because that old model depended upon that series of local monopolies. Which means that, a century later, the American newspaper market is going to be like the British one. Nicely described in this Yes Prime Minister clip. The point of which is that the market is not divided by geography at all. It’s divided by socioeconomic classes and the presumed interests of each of them.

Instead of having the Bay Area nuts and bolts paper, the LA nuts and bolts paper, we now have “Hexaform Rotational Securing Devices” for the professional and posh classes and for those who get their hands dirty and do stuff the more populist “Nuts!”.

That’s the way that American journalism is going to end up simply because that’s what the economic pressures are and there’s no resisting those. Differentiation can no longer be about geographic areas when reporting national and international news. Therefore that differentiation is going to go away. Yes, this will mean the death of many storied regional titles. What will replace it is some dozen or so - say - titles differentiating in language used, political viewpoint and socioeconomic distinctions in potential readership.

Oh, and another 50% at least of that national journalistic workforce going to do something else. At least.

Yes, it is about the internet, no it’s not about Facebook and Google taking the advertising. It’s the classifieds that have gone, along with the geographic restrictions. There is no way that those two are ever coming back either so the situation isn’t going to reverse.

Market segmentation works, of course it does, that’s why both Bentley and Skoda are part of the VW group. It works in British newspapers too. The Daily Mirror (proletarian left) and Daily Express (lower to middle class right) are both owned by Reach now. The Times (the people who run the country) and The Sun (Woo! Tits!) are owned by News International.

Segmentation works. But what’s really happening in American journalism is a change from geographic segmentation to socioeconomic and all too many people in the business - including every American journalist I’ve ever seen comment upon the subject - have failed to realise this as yet. There are that limited number of slots available and we can already see a couple of winners. Wall Street Journal, the financial paper of record, the New York Times (thinks it’s The Times but is really The Guardian and so occupying the highbrow and wrong leftish position) and, well, the other positions are still open. Anyone who manages to occupy the Daily Mail’s position will make a fortune and good luck to them. But that’s where the battle is, not in this insistence that we really must keep having 50 to 100 papers all following the same political and sociological line but in different locations.

The change is going to be fairly wrenching but I do, absolutely, insist that that’s going to be the outcome here. And, as is true of the British newspaper market the most virulently profitable position is going to be writing the newspaper for the wives of those who run the country. Women do, after all, dispose of 80% of household income which does wonders for display advertising rates.

If you’d like a little sport then show this to an American journalistic type. Then ask them why it’s wrong.

Listen, nod at appropriate points, commiserate. Then, when they’ve finished their explanation, ask again:

“Explain to me not why you think it’s important this is wrong, not why you hope it’s wrong, but why is it wrong?”