AUGUST 26, 2009 3:46AM

Newspapers and antitrust: The readers write

Rate: 6 Flag

The comments thread on my post about Tim Rutten's Los Angeles Times column about antitrust and newspapers is plenty lively. When my reply to some of the letter writers went past 2,000 words, I decided to make it its own post.

Chris Rywalt: The problem is this: No one can figure out how to pay for anything besides running ads.

I believe that's a fixable failure. I think the answers are out there. And I think the number of people working on the problem has been small relative to the whole Web. A whole lot of sites have tried to make it on advertising alone, or advertising mostly, and it's only in this downturn that it seems to be dawning on a lot of people: It's never going to work.

Ads in magazines and newspapers have survived because no one can be sure how well they're working. Ads online can be tracked quite closely and what we've seen there is advertising doesn't actually work.

I wonder about this. Totally outside my area of expertise, but: Is it true? What's the definition of "working"? It seems to me the "original sin," to borrow a term the newspaper people throw around, of online advertising was to measure things in click-throughs. Is that an accurate measure of success? How many people "click through" on offline ads? That is, call the 800 number, use the coupon, whatever. Does online advertising not work, somehow, for the things offline advertising works for? Brand building, name recognition, product positioning, etc. Are there studies about this?

I don't think it's true that "Ads in magazines and newspapers have survived because no one can be sure how well they're working." Advertisers track the success of their campaigns. Do they do the same with online advertising or do they just pay for click-throughs? I'm really asking.

We've all tried subscriptions and ads but basically the only really sustainable model for paying for online content is subsidy.

I believe it's too early in the game to say that.

This problem hasn't been solved yet and it's been fifteen years.

I think 15 years is not much, especially because, as you said, at the beginning, and that's measured in years not months, making things pay wasn't a high priority for a large percentage of Web sites. I know there have been people and companies out there working on this problem since the mid-'90s. Salon is among them. But I would say that, as an industry, the journalism business has only been wrestling with it in a serious way for less than five years. Maybe less than three.

Dave Cullen: Yes, it's silly to suggest that newspapers are the ONLY form of journalism, but I don't think that's what he's really arguing. He's saying it's a crucial component of journalism in our current system, and there's nothing on the horizon to replace it, so we'll be screwed without it. He's right.

I really don't think he is.

There are a lot of things on the horizon. Local news Web sites and blogs are springing up all over the country. Ann Arbor's last newspaper just closed and several Web sites, including one run by the newspaper's publisher, are battling for supremacy there, creating an interesting laboratory.

Talking Points Memo, the U.K. Guardian and others are doing difficult investigative reporting, often crowd-sourced. Spot.Us and others are experimenting with creative new ways to fund reporting. New technologies are giving sources more ways to communicate with the public and giving the public eyes and ears in places they've never had them before.

Is any of it ready for prime time? Will any of it last? Shoot, I don't know. But there's a lot of stuff bubbling up around here, a lively ecosystem that will, I'm confident, evolve into the next generation of journalism -- one that will also include newspapers, TV, radio and maybe something else we don't even know about yet.

From reading the comments on this blog, I think a lot of people think I'm a cockeyed optimist, a utopian, that I think every new idea I hear about is The Supreme Answer and I'm ready to dump newspapers and everyone who works at them into the sea. I'm not.

I actually think we're right at the beginning of a period of utter chaos. The old model is breaking down and the new model isn't ready to replace it. To quote Clay Shirky from his essay "Newspapers and Thinking the Unthinkable": "That is what real revolutions are like. The old stuff gets broken faster than the new stuff is put in its place."

It very well might suck, what's coming up. There will be subjects and geographical areas that go underreported, corruption that goes un-watchdogged. But I think we have to let it play out or we'll never get where we're going. If we artificially prop up the dominant but dying form, newspapers, we'll choke off the innovation and growth that's going on everywhere else.

And then when newspapers die anyway, as many of them inevitably will because the conditions that made their business model possible no longer exist, there will have been nothing growing in their shadows. We'll have a longer, more painful period of chaos.

Yes, the corporations pushing this are big corps and have a vested interest too, and are not doing it just for the public good. But it's a logical fallacy to suggest that because they have a vested interest, they can't also share the public interest. Here, the two coincide.

I agree it's a logical fallacy to say that because they have a vested interest, they can't also share the public interest. But that doesn't mean it's wrong to say that they don't also share the public interest.

The only question I have is whether it's ten years too late, and whether it can actually work.

Imagine where we'd be if Congress had legislated against online innovation 10 years ago. And I'm very confident that I can answer that last question: No.

Lynne K ... but there's also a lot of crap masquerading as premium. You work for [Salon], which is good, but perhaps you've been breathing your rarified air for too long; you might not understand that there are other bad bloggers out there purporting to be good bloggers.

I understand, but so what? There are a lot of bad newspaper writers too. Bad newspapers. Ninety percent of everything is crap. None of it disqualifies the good stuff.

There should be a measure by which people can trust what they read online and newspapers offer that.

Really? How were they in the runup to the Iraq War? How was Jayson Blair for you?

You're the measure. You figure out, over time, along with fellow readers, who you can trust and who you can't. I don't agree with this idea that you can trust something in the newspaper because it's in the newspaper and you can't trust what's in, say, blogs because they're not in the newspaper. If a blogger -- or a newspaper writer -- is not trustworthy, the audience will let you know. Others will write about him or her, commenters will point out the inconsistencies or half-truths.

And it's THEIR news, and I think most people agree that stealing is bad.

It's not their news, but it's their writing about THE news, and yes, stealing is bad. There are laws against it.

Maybe the anti-trust laws need tweaking. I don't know, I'm not a lawyer. But you're using the word "collude" like the anti-health care nuts are using "death panels" -- as a scare tactic.

Someone else pointed this out, but that's not fair. Death panels are made-up things, lies, invented to scare people into a political position. "Collude" is the word Rutten himself used, accurately. Collusion is the very thing that antitrust laws were designed to stop.

Tony Wang: You're not killing freedom of the press if you say that readers have to pay for the content.

Oh, certainly not! Charge away. No problem. If you can get people to pay for your content, you go. What we're talking about here is suspending antitrust law so newspapers can form a cartel, giving them an unfair and artificial advantage over their competition, which is the rest of "the press." That's a clear hindrance on freedom of the press.

And one of Murdoch's properties, the Wall Street Journal, has been doing it right for a long time.

Yay, Wall Street Journal. It didn't need Congress to suspend antitrust law, did it. What the Wall Street Journal does right is it has content that is distinct enough that people are willing to pay for it. It's a niche, specialty paper, and its niche is large corporations and other people with a lot of money. Good niche.

John Steiner: Now, in the Internet era, what constitutes the press is nebulous because people who act as reporters may not work for a traditional news organization nor even get directly paid for their work. So the question that arises is what is the specific definition of the press?

I don't find this nebulous at all. The press is any form of publishing. You don't have to be part of a traditional news organization or get paid for your work to enjoy freedom of the press. Who would you exclude from "freedom of the press," and why? Who would you exclude from "freedom of speech"?

Jeremiah Horrigan: Some thoughts from a life-long news hound and still-employed newspaper reporter: ...

Rutten's proposal strikes me as dicey. It has the taste of panic and looks backwards for its questionable comforts. If he sounds desperate -- and I think he does -- I'm glad he's at least standing up for newspapers, however benighted his proposal may be. In fact, I would say that rather than smugly predicting newspapers' demise, the presumptive "alternatives" to newspapers could use a dose of desperation as well.

The country's cadres of "citizen journalists" have yet to produce anything comparable to what I've outlined above. Blogging has not been able to professionalize itself to any appreciable extent.

I think there's plenty of desperation out there. And I'll refer to my comments above about the quality of newspaper alternatives. The failure of, for want of a more accurate word, the blogosphere, to match 200 years of newspaper achievement in less than a decade is not adequate reason to legislate against it. If the citizen journalists and the blogs aren't real alternatives to newspapers, why do newspapers have to go running to Congress? Why not just compete?

I'm betting that when the paywalls start dropping, people will be willing to pay for careful, professional online reporting and writing, just as they have long been willing to pay for the morning paper.

We disagree there. People paid for the morning paper because there were no realistic alternatives. Now there are thousands. And isn't it interesting that newspapers are doing a lot more talking about paywalls than building them? But we'll see together.

John Steiner: The other issue that citizen reporters and bloggers lack is press credentialing. There are simply some stories that a citizen reporter/blogger doesn't have access to without a press badge. That also will need to be addressed in the future and I am not sure how it will be resolved, especially if the newspapers continue to close and there are less options for obtaining news.

Bureaucratic detail for the most part, don't you think? If the main thing standing in the way of the Future of Journalism were a bunch of flacks having to consider credentials on a case-by-case basis instead of just automatically saying yes to newspaper, TV and radio reporters and no to everyone else, we'd have this thing licked.

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I've never heard any good reason for the argument that web ads don't work. I certainly don't pay much attention to the ads in printed newspapers. If anything, the ads on a web site is much more noticable, even if I don't actually click on it. I suspect there's a huge underused source of income there.
"If we artificially prop up the dominant but dying form, newspapers, ..."

This phrasing suggests that the state of affairs in which antitrust laws result is some inviolate state of nature. Let's not forget that antitrust laws themselves are an "artificial", albeit typically quite justifiable, tinkering with the market. As I understand it, the point of antitrust laws is, ultimately, to ensure that consumers can receive quality goods and services at a fair price. If we can show, or have good reason to believe, that the enforcement of such laws in a particular area is actually preventing that from occurring, it's not obvious to me that questioning their enforcement in that area then violates the first amendment, a claim I've heard some make, or constitutes "an *artificial* propping up". Antitrust laws are just a means to an end, not ends in themselves.
I'm intrigued that much of the discussion stayed away from the antitrust exemption request. That, as I see it, is a problem--a big problem. Newspapers colluding to set prices en masse? No way! Let them stand or fall based on their individual merits. I have no problem if they want to try it. I don't even know what I would feel inclined to pay for a this point. Do I just avoid the WSJ online? Yes. All I know is that any land subscriptions I pay for better include full access to web content.
I believe that's a fixable failure. I think the answers are out there.

I think it's going to take some kind of creative breakthrough, someone who gets the really great idea. Like the guy who said, "Let's slice the bread before we sell it!" That kind of guy. Until then, we're spinning our wheels.

And I think the number of people working on the problem has been small relative to the whole Web. A whole lot of sites have tried to make it on advertising alone, or advertising mostly, and it's only in this downturn that it seems to be dawning on a lot of people: It's never going to work.

This is the third downturn I've been through. The first one all but killed online advertising for any but the largest sites. And yet here we still are, discovering again that ads cannot support online content.

As far as the efficacy of advertising, I can't cite any specific studies. As I wrote, I feel certain someone else somewhere has studied this more than I have. All I have is some anecdotal evidence and conclusions I've drawn from it.

Back in the early 1990s I had a site getting a few thousand hits a month. I was able to sell banner ads on it and bring in about $700 a month. The same site, getting the same number of hits, today brings in a whopping $15 a month using Google ads.

One day, the bottom dropped out of the online ad market. That was it. They stopped paying for pageviews and started paying for click-throughs. Why? We can fall back on the old free market: Companies realized pageviews weren't worth it.

Magazines and newspapers continue to work on the pageview model. They can because there's no way to track anything else. I'm sure, as you say, King, that companies track the efficacy of their ad campaigns. But those are strictly relative, aren't they? Not to mention that the world of paper ads is the world of companies like Pepsi and Coca-Cola, which are no longer competing in any real sense, but are jockeying for market share.

Further, think about this: You invest in a paper ad campaign, you invest a lot of money. The pressure to make that appear successful is pretty high. You invest in an online campaign, it's a smaller investment. If it doesn't work, oh well, you accept it.

I mean, whole, huge companies are based on the continued success of paper advertising. Who's going to tell the truth about that particular outfit of the Emperor's? But online ads are new. And transparent.

It's definitely something I'd like to see someone investigate. If only there were enough money to pay a trained journalist....
I totally disagree with both columns (on about 8 different grounds), but I strongly agree with this:

It seems to me the "original sin," to borrow a term the newspaper people throw around, of online advertising was to measure things in click-throughs. Is that an accurate measure of success? How many people "click through" on offline ads? That is, call the 800 number, use the coupon, whatever. Does online advertising not work, somehow, for the things offline advertising works for? Brand building, name recognition, product positioning, etc. Are there studies about this?

i think you're onto something there, and have since the beginning. it was a HORRIBLE original sin. i thought they were crazy from the start.

i'm still confounded that the pop arts--music, books and film--don't advertise like crazy on the web. so much of their task is just getting people AWARE of the product among the noise.

you don't have to click on a movie ad or do anything, you just need to see it and realize clive owen or quentin tarrentino have a new movie out.

and the web is targetted to those demographics, too. what's the holdup?

like you, i seriously wonder whether anyone has studied this seriously.

anyone know?
I think the trouble is, with all arts, the noise. Even with ads, there's too much noise. And people have learned to filter it out. More than once I've spent hours looking for a certain function on a Web site only to discover it was hiding in a section of the page I simply never really looked at because there was usually an ad there on most Web sites. If you made a navigation bar the size and shape of a banner ad, I guarantee most visitors wouldn't know how to operate your site, just because they'd never notice where the navigation was.

So ads don't really help to cut through noise, they just add to it. Those ads for Microsoft's Bing have the right idea -- although honestly I've never had that much trouble with Google. It's just too damned noisy.

So trying to get any art noticed -- pop music, a movie, a great regular column, a little online game -- is nearly impossible. Once you do overcome a certain threshold, though, you get what I call the Beatles Effect: It gets bigger and bigger and can't be stopped. My little online game was like that: I never promoted it and in fact haven't done more than minimal maintenance on it in over a decade, but it still rolls along, between 500 and 1000 pageviews a day. Why? It reached some critical mass and that was that.
chris, i agree with you on tuning out the web ads.

so why do we notice a lot of the ads in print?

partly because they're so much better. many are actually interesting to look at.

i think the corollary to the original sin that web ads should be clicked on, is that they didn't have to convey much themselves--and were sized accordingly. what the hell can you convey in a web banner? what a stupid idea for an ad size/shape. compare that to a full-sized magazine ad, or a big newspaper ad for a film opening this weekend.

people actually flip to the movie section to browse the movie ads. they have space to actually do something: to advertize.

i'm actually happy with the experience of most web pages giving up only a tiny fraction of their space to ads--as opposed to more than 50% of printed periodicals.

but the price is that ads are not paying for the web or now, the media.
Very interesting (rated), but to answer the question about whether companies REALLY know if their ads in traditional print or online are working, the answer is unequivocably YES. Millions are spent all the time to track tangible sales and intangibles like brand equity to the presence and saturation of advertising. In the last 1o-15 years measuring the intangibles has become quite sophisticated and accurate. Google K.D. Paine (The Queen of Measurement) for that.

Separately, I want to thank you for this ongoing examination of the future of journalism. I'm currently writing a book called "Foreclosure on the Fourth Estate" that deals with many of the same issues.
I continue to believe that newspapers will survive. But they will have to morph into something new.

Once, there was a fear that TV would kill movies and radio. It didn't. But if forced them to morph. TV hastened the development of color movies and Cinemascope. TV hastened the transfer of variety shows from radio to TV, and the arrival of radio as a medium for music, and later, talk.

I happen to be someone who likes to read words printed in ink on paper. I love the tactility of books and newspaper. I'm sure that there are many more like me. But the home delivery option available from most newspapers is a bad joke. They need to bring back the paper boy/girl and drop the day labor that heaves the paper from the back of a fast moving truck (if the paper lands anywhere within your property lines, they considered it to have been delivered).

I think that newspapers will evolve into regional publications (i.e., one newspaper for the entire NYC area, or the entire S.F. Bay Area), maybe with local editions; maybe even morning and evening editions. Throw in concierge service to boot.

And for starters, they need to broaden their thinking. Their web sites are nothing more than the electronic layout of their print versions. There are plenty of successful models. Salon.com is one such. But Salon does not view it's subscribers as merely x number of sets of eyes. Salon sees it's members as participants. When newspapers learn that lesson, they will begin to morph into new models.
If you think TV didn't kill radio, you haven't checked in lately. Radio is on its way out. Music delivery is going to be via streaming to wireless Internet devices. It's working its way over as we speak.

Radio has taken its time dying, but it's getting there.
King: I was struck by your comments above:

"From reading the comments on this blog, I think a lot of people think I'm a cockeyed optimist, a utopian, that I think every new idea I hear about is The Supreme Answer and I'm ready to dump newspapers and everyone who works at them into the sea. I'm not.

I actually think we're right at the beginning of a period of utter chaos. The old model is breaking down and the new model isn't ready to replace it. To quote Clay Shirky from his essay "Newspapers and Thinking the Unthinkable": "That is what real revolutions are like. The old stuff gets broken faster than the new stuff is put in its place."

It very well might suck, what's coming up. There will be subjects and geographical areas that go underreported, corruption that goes un-watchdogged. But I think we have to let it play out or we'll never get where we're going. If we artificially prop up the dominant but dying form, newspapers, we'll choke off the innovation and growth that's going on everywhere else.

And then when newspapers die anyway, as many of them inevitably will because the conditions that made their business model possible no longer exist, there will have been nothing growing in their shadows. We'll have a longer, more painful period of chaos."

I confess I have at times seen you as too eager to embrace a technological answer ("data journalism," for example) and insufficiently sentimental (as I am not) about newspapers in general. Too often, it seems to me, the lines are too starkly drawn between bloogers and reporters, old and new media, etc. But I think you summary statement above is on the mark & reflective in many ways of my own. We're up to our necks in a period of transition that's chaotic and painful. But I think eventually both alleged "sides" will mutate into a something more than we have now, and something that allows the best of all worlds to survive and thrive and do what needs doing for the reader.
Thanks a lot for sharing the article on antitrust. That's a awesome article. I enjoyed the article a lot while reading. Thanks for sharing such a wonderful article. There are lots of information about on antitrust that also could be awesome.