Digital Journalism
The Economics
of Digital Journalism:
What Happens When
Traditional Newspapers
Go Out of Business in 2039?
W. R. Neuman
Digital Journalism
The Digital Dozen
Twelve issues we had better get right if
independent, high-quality, professional
journalism is to thrive in digital era.
Digital Journalism
1) A clear-eyed assessment of
the history of journalism
Were it left to me to decide whether we
should have a government without
newspapers or newspapers without a
government, I should not hesitate a
moment to prefer the latter
Never pick a fight with people who
buy ink by the barrel
Digital Journalism
The Romanticized History
Digital Journalism
The Romanticized History
Digital Journalism
The Romanticized History
Digital Journalism
The Romanticized History
Digital Journalism
2) A shift from a posture of
defense to reinvention
Worth defending?

Sure
Likely to be a successful strategy?

Not in the long run
Digital Journalism
David Lazarus
San Francisco Chornicle 3/14/07
I'll come right out and say it: It's time
for newspapers to stop giving away the
store. We as an industry need to start
charging for -- or at the very least
controlling -- use of our products
online.
Digital Journalism
David Lazarus
San Francisco Chornicle 3/14/07
My thinking is that this is approaching a
life-or-death struggle for newspapers, and
an antitrust exemption may be the only way
that the industry can smoothly make the
transition to a digital future.
Put simply, we need to charge a fair price
for our products, and we need to do so
together.
Digital Journalism
3)The happy accident of
newspaper economics
Technical
Medium
Production
$
Advertising
Audience
$
Digital Journalism
3)The happy accident of
newspaper economics
Percent Advertising Economics
Books
0%
Movies
0%
Magazines
50%
Newspapers
70%
Radio and TV 100%
Digital Journalism
3)The happy accident of
newspaper economics
Newspaper Industry Profits
Magazines
Books
Agriculture, Mining, Mfg
25.2%
4.5%
5.5%
~5.0%
Digital Journalism
3)The less happy accident of
newspaper economics
45
40
35
30
25
20
15
10
5
0
S1
1935
1945
1955
1965
1975
1985
1995
2005
Digital Journalism
3)The happy accident of
newspaper economics
McClatchy Co. CEO Gary Pruitt April 2006
All those skittish investors who think
newspapers are a dying industry are, in fact,
dead wrong.
Far from shrinking, our audiences are
growing steadily. Simply put, more people
want our products today than wanted them
yesterday.
Digital Journalism
4) The ideal of media diversity
Based on concept of local media
market
Rethinking diversity – the paradox of
critical media scholarship
Digital Journalism
5)The Sunstein thesis
The ‘Daily Me’ Icon
Behavioral studies contradict the
Sunstein thesis
Digital Journalism
6) The long tail thesis
Digital Journalism
7) Ogilvy’s dirty little secret
The relationship between investment in
advertising and increased sales is
stunningly weak, and conditioned on a
complex of environmental factors
Digital Journalism
8) Amateur hour: blogs and wikis
Don’t vilify the amateurs
Learn from them
Take a lesson from Jimmy Wales
And from Google
Digital Journalism
9) Meyer’s thesis
Digital Journalism
10) The false hope of the
‘online newspaper’
The economics just don’t work
Shoveling newspaper content over to a
web site and charging admission is a
non-starter
Digital Journalism
11) Transcending the trinity
Norms of professional journalism
Wall Street’s ROI
Academic research on media effects
Digital Journalism
11) Transcending the trinity
Digital Journalism
12) A viable economic model for
sustained high-quality journalism
The new model?
“ ‘Sup?” query
Personalized
Reliable
Branded
Google model
Digital Journalism
Digital Journalism
The Magic, All-Knowing
Answer Machine
Commercial 31%
Reference 26%
Popular Culture, Sports 11%
Social 10%
Sexual, Erotic 9%
Health 7%
Government and politics 3%
News and current events 2%
Digital Journalism
You Need To Know What
This Man Knows
Amit Singhal
Google Ranking Algorithm Czar
Digital Journalism
Transaction-Based
Business Model
 User-Created Content
 Pull Rather Than Push
 Context Sensitive Search
 Personalized Search
Digital Journalism
The Bottom Line
The future of news is the search engine
 Not the newspaper
And not the evening network newscast