10 Jan 2019
Topics Journalism

Everywhere you look, journalism is in crisis. The hallowed e-pages of Forbes and the Global Editors Network report a singular message. The internet is killing journalism. Uggh. Dead. Such grumbling is not new. Many have decried the corrupting influences of ads, private ownership and even amateur writing for at least a century.

Capitalism has finally killed (or at least severely winged) journalism. Even worse, the future of capitalism is equally screwed. Artificial intelligence, next-phasers (who argue that the end of capitalism only represents an evolutionary phase) and Koch-fuelled eco-ciders from the Huffington Post, all say capitalism is out.

Great thinker, Peter Diamandis, would see the end of paying for stuff as the end of capitalism. Yet, the doom-sayers are missing the business-as-usual non-transformation in front of our very eyes.

Citizen Journalism, the Death of Expertise and Diva Journalists

Economic theory predicts that markets specialise, diversify and cater to heterogeneous tastes over time. Lower ‘transaction costs’ (as economists call the move from paper to bits) have led to new ways of organising traditional journalism.

Academics have commented on the atomisation of news providers since the early 1990s – with millions producing content all the time. Yet, PR firms have been doing just that for decades. Specialist ‘news’ providers and media companies offering authoritative content have flourished since the fax-days.

Oxford Analytica has the news sifted by Oxford’s brightest. Thomson Reuters offers compliance, financial and technology news that commands a very high premium over the Wall Street Journal’s news stand prices.

TechCrunch provides juicy gossip for techies and the Global Arbitration Review for world trotting commercial arbitrators. As before, content providers simply respond to still-present supply and demand curves shifting on their ethereal rails.

Demand for hard-boiled newsroom journalists has been falling for decades. Media philosopher Marshall McLuhan predicted years ago that media consumers would prefer two-way engagement with media through citizen journalism, blogs, Vice News’immersion journalism (showing the news rather than reporting it) and “making the news” `a la Al Jazeera’s investigative reporting – rather than passively receiving the news.

Twitter, in some ways, has collapsed all these trends – allowing activists, experts and plain old people-on-the-street to immerse themselves in the news they are part of. Twitter and YouTube has made anyone/everyone a journalist. Politicians, CEOs, and even terrorists end-up presenting themselves on the internet, often providing more authoritative accounts of The Truth than the pre-boiled, boilerplate quotes they usually give to mainstream journalists.

Academics, pundits , gurus -- and even real experts – have largely replaced the fired journalists of yore. Maybe the death of expertise has affected Trump’s White House. Yet, media organizations have seen a boom in expert-produced material…again reflecting supply and demand.

On the supply side, academic departments and research funders, have encouraged scholars to ‘vulgarize’ their research in the mainstream press, since the mid-1990s. You may already know many of them – like Paul Krugman, the economist turned columnist, and Daniel Drezner, the international relations scholar turned media guru.

He literally wrote the book on academics turning into star media pundits. On the demand side, channels like The Conversation, the Scholars Strategy Network, and even The Economist give academics a bullhorn reaching millions.

Journalists have adapted in the same way that other labour market members have rolled. You may know many of the divas at the top end of the market -- Parag Khanna, Malcolm Gladwell, and Michael Lewis represent journalists just as much as authors.

Robert Reich and Chrystia Freeland represent others – a politician turned journalist and a journalist turned politician respectively. Divas like these form only part of a larger market for journalism.

A three-tiered market for journalism – and everything else

A three-tiered market has formed for media organizations and the journalists who provide their content. At the high-end, readers pay (real or self-stylized) experts for digested news. The high-brow Economist magazine has been making in-roads in the US for years, at a time when the home team favourite Wall Street Journalhas struggled.

Project Syndicate and Vox represent popular outlets among economists. While neither charges, their writers make money the old fashion way…through the speaking and consulting gigs their articles attract. Pulitzer Prize winners and other prestige journalists also benefit from the concentration of attention and money in journalism markets.

Former New York Times columnist Anand Giridharadas could see the winner-take-all economy so clearly, because it affects his own industry.

The middle and lower strata of media markets represent those areas most criticized by the journalism-is-dead crowd. At the middle of the market, the main-stream media organisations fund traditional journalism with ads, just like in the good-old days.

A Pew Research Centre report has found that advertising accounts for almost 70% of all traditional news organisation revenue – about half the value of such revenue in 2005 in absolute terms. Most of the largest media organisations fall squarely in this category.

The media apocalypse in this market segment stems from the usual too much publisher supply chasing too little advertisement demand. At the lower end of the market lie the click-bait and pay-per-click content providers. Google and Facebook enable this market, as well as represent its two largest players. The middle market players love to gripe about click-bait, and increasingly use it.

To what extent do trends in media and journalism reflect or parrot trends in the economy? After all, the concept of “winner take all distribution of gains” in post-capitalist information economies affects retail, services and consumer goods just as much as ‘media goods.’

Media organisations, like other organisations have seen more concentration – affecting demand for journalists.

Nothing in life is free – no matter what Paul Mason says. Free content – like ‘free’ digital goods and services – does not actually come free. Journalists do not mass produce zero marginal cost commodities. They produce niche, highly specific goods and services, ideally tailored to each individual. Economists know such markets by their rightful name. Bog-standard capitalist markets.

The future of journalism in the post-capitalist age

Seeing media markets and journalism organisations in the standard economic paradigm helps us see the future of journalism more clearly.

The future does not lie in the Guardian’s panegyric vision, where governments rein in markets and punters of all stripes donate to that self-same Guardian newspaper.

Following Mason’s post-capitalism shtick, “Guardian journalism should have the biggest possible impact and try to change the world for the better.”

The Economist also makes no bones about its mission – to revive liberal values. These calls simply represent a different kind of click-bait, targeted at a different kind of reader.

The Aspen Institute flogs its own services, gazing into the future of journalism darkly. The Institute’s own journalist-scholars attract the funds that pay their wages no differently than Vice does.

The New York Timesdigital media reboot does not represent a new kind of journalism. If a book seller delivers books by internet, rather than in store, we do not claim that they sell a different thing. They sell the same thing - using a different channel.

When supply does not match the wants of the media-loving consumer (and his or her desire to hold politicians accountable for their actions), that future looks bleak. Like in any market.

The future of journalism looks just like its past. Only now, we get to sell missives about the future of journalism in the post-capitalist age.

Topics Journalism