The Digital Journalist

The Bloody 20%

Editorial by Dirck Halstead

Jay T. Harris, the Publisher of the San Jose Mercury News, resigned several weeks ago. He cited pressure from the Knight Ridder company to increase profits, while staffing and news space were reduced.

Harris is only one of many journalism executives who find it harder to hold the line against corporate pressure to turn what used to be a public service institution into a profit center.

AOL is exerting enormous pressure on the magazines and divisions of Time Inc. to bring up profits. The problem is that journalism has never really been a profitable business. A friend of mine recently went for a job interview with a new media television company. After listening to the executives, he asked a pointed question, "Do you want to make money out of news, or do you want to spend money on news?"

News is what publishers and networks traditionally spent money on. That was the heart of their production. It is what sold the magazine, the newspaper, or the network. In the old days, this used to be called "goodwill," It's what the news media used as their bona fides to the public. When you go to the movies, you accept the fact that the story you see is fictional. When you go to your newspaper, magazine, or television station, you have a right to expect that what you see is true, with no commercial influence. There is only one way to get that--to pay for it.

Several years ago, I proposed a story to Life Magazine. When I quoted the price to do the story, I was told it was more than what it cost to publish the entire monthly edition. What Life needed was to make sure that they could get up-front resales for the story before they assigned it. My reaction was "where in Journalism 101 was it written that the cost of doing a story would be free to the publication?"

All the major newsmagazines are now under intense pressure to reduce their budgets. In order to make the new profit-loss margins being imposed on them--some nearly as high as 20%--there is only one way to do it: CUT. Cut everything, from photographers payments and expenses, to decimating staffs. They don't have the option of raising prices, the way the advertising people do. They are service organizations within their publications. They don't collect money, so essentially, they are out of luck.

Another problem for the corporations that run these operations, is that they can only go so far in raising ad rates. At some point, the advertisers rebel. Then the whole house of cards begins to tumble down. General Motors this month pulled their advertising budget from Conde Nast Publications. It was nearly a half billion-dollar hit.

The movie studios will be next. They really don't think that print sells tickets to their films. Industry studies are showing that one of the items people are most likely to cut from their household budgets are newspapers and magazines. A few days after Harris resigned in protest to the new corporate edicts, the San Jose Mercury News quoted media critic Ben Bagdikian: "Magazines increasingly in the past 30 years have been created to reap advertising dollars, not fill an obvious editorial need. That erodes their value to readers, and thus to advertisers in hard times."

In case we think these problems are only occurring here, The Ifra Trend Report recently printed that veteran reporter Palagummi Sainath didn't pull any punches when speaking at India's UBC School of Journalism. "In my view, the bulk of what is happening in the press these days is stenography." Blaming media convergence, which has led to a culture of corporate journalism, Sainath said most of what passes for journalism today is little more than mindless note taking, focused on fluff topics such as CEOs, celebrities, and beauty queens. "The [Indian] press does not have a single correspondent in a major paper who covers rural poverty," he said. "No one covers housing or unemployment or the 40 million job-seekers looking for work. But we do have a full-time correspondent covering golf."

The only thing that magazines, newspapers, and television have to sell that is worthwhile is content. It must be fresh and important. Without it, there is no market. The value in the market starts with journalists.

Dirck Halstead