The Guardian's decision over when to kill the cash cow

It was fascinating to read Picard's "Cash cows or entrecote" article the same week I read all about Newsweek killing its print edition and The Guardian being rumored to do so. The Guardian, it seems, is very publicly dealing with the exact same decision that Picard writes about in his article -- at what point do they "kill the cash cow" and drop print altogether? As this paidContent article explains, the Guardian's executives have determined that they're going to have to go digital-only at some point, and probably sooner than they initially expected.

But print is still generating the vast majority of its revenue, so that time hasn't come yet. Basically, it's trying to  rapidly ramp up its digital revenues to the point where it could turn off its print revenues and survive. It seems they're operating from a similar mindset as Picard: You can't kill print and hope you can then generate enough digital revenue to survive. You have to bring up the digital revenue first, and then kill print when you've reached that point and you're ready for the transition. Newsweek seems to be doing the previous strategy, which is being widely mocked as an instant loser. The Guardian is approaching things much smarter.

I think Picard's rule of waiting to switch until the whole operation (rather than just print) is losing money is a bit too conservative. But I do like the wisdom of his patient approach. It seems like a natural response to the foolish eagerness some executives might have after reading Bower & Christensen's article -- "This technology is disruptive! Quick, let's jump on it!" Instead, Picard is saying, "Sure, go ahead and pursue it, but don't drop your old technology until you've fully harnessed that new one." It's a needed bit of levity in the midst of the panic in the news industry over digital disruption.

Along those same lines, this is a good explanation from this week by Nicholas Carr of why more publishers don't drop their print editions. It covers some of the same points as Picard, but in more casual, non-academic terms.

Everybody's got something to hide (except me and my media firm)

It was simultaneously frustrating and encouraging reading from Picard about indicators of success for media companies -- encouraging to see how many of the indicators of financial and economic health are publicly available, but also frustrating to see how many of them aren't. It's always fun to tell reporting students how much they can find out about companies they're covering from their 10-Q's and 10-K's (if they're publicly traded) -- revenues, profits, debt, major projects, major ongoing lawsuits, percentage of the business that's in various markets or products, and so on.

But there's also so much that's hidden from those balance sheets, so much that could really give us a true sense of how that company is actually operating. I sometimes wonder if the accountants preparing those statements are snickering as they're writing about all the things they're not telling us ("If they only knew...").

For us as researchers, it's tempting to simply avoid asking some questions because we know the data needed to answer them would be so difficult to get our hands on. I read someone on Twitter a few weeks ago saying that we could solve the paywall debate in 2-3 years, tops, if everyone would just open up all their data on it for everyone to study and learn from. That's unrealistic, obviously, and it shouldn't stop us from trying to answer the parts of the question that we can get our hands on, and find more creative ways to get at the rest of it.

So if journalists SAY they're so valuable...

I really enjoyed Robert Picard's essay on why journalists deserve low pay, and it got me thinking about the difficult spot journalists have gotten into rhetorically in defining their value to society. One of Picard's main points was that journalists seem to believe they have an inherent value to society that's worth ensuring they continue to survive in their current professional form. (Picard, obviously, argues that that's not the case, that journalists' value is based primarily on their usefulness to society, which is diminishing.)

So, the argument goes from journalists, the public has to act to ensure that professional journalism survives in something resembling its current form (preferably by paying for news), because it's so intrinsically value to society. Picard is skeptical of that value, but there is a group of scholars who believes very strongly in journalism as a public good, as journalists do - those, like Robert McChesney, who are arguing that the government should step in to preserve journalism for the sake of the public.

Journalists, of course, are totally anathema to that idea, but that's the logical endpoint of their argument about their own intrinsic value: If journalism provides a vital intrinsic value to society but can't be sustained by the market as currently constituted, then it needs to be sustained as a public good by nonmarket forces - i.e. the government (or charity, if that will scale, I suppose).

So journalists seem to resist both perspectives on their own value and the implications of those ideas - they seem to be saying, "We're absolutely fundamentally important to a functioning democracy, but we don't want you to set up any of the safeguards that you typically enact for those types of valuable services. Trust us to make it work within the market, but if it doesn't, it's all your fault and you should feel bad for letting us die." That's an uncharitable way of putting it, but it certainly does seem to be intellectually inconsistent way to approach one's own profession.

"So what?"

The moral of the story is -- journalists need to make their products useful to audiences "if they want to make money." After all, usefulness is highly correlated with value, and value is what makes [most] people pay.

In other words, while journalism may be important because it "contributes to the functioning of democracy and encourages civic engagement, etc.," the million dollar question is:  are these reasons enough to make people pay? Picard doesn't think so, and a closer look at average Americans' [un]willingness to pay for the news would suggest as much.

In my view, the more important, or practical question that journalists need to answer is the "so what?" from audiences: "so what if journalism facilitates democracy? What is in it for me? Why should "I" pay?"

Looking back in history, the U.S. has rarely been a nation with high political participation rate - many citizens don't cast votes during elections, and even among those who do vote many are neither politically informed nor civically engaged. In other words, while most people would agree that democracy is good and important (an argument journalists and journalism scholars alike often make in justifying the importance and value of journalism), many actually don't do much, if at all, to uphold this normative belief, let alone be willing to pay for it... 

There comes a time when idealism [must] collide with reality for survival -- in journalism such collision is not new or surprising, but when will journalists stop hiding behind the motto "the public should read and pay for our paper because it's good for democracy" and start looking for answers to "so what?" Soon, we hope.