News in a Death Spiral…and They’re Pressing the Gas Pedal!

There is nothing more horrifying than stupidity in action.
• Adlai E. Stevenson

Here’s a press release from the mighty brains behind “Journalism Online.”

See that? There’s one big hint that this venture will not be successful. Internet success stories use originality in their very names. Online book store? Amazon. Online shoe store? Zappo’s.

Online journalism? Journalism Online.

I can smell the corpse beginning to stink already!

The press release is reprinted in its entirety, but here’s the link. My comments, if you care to read them, will be obvious.

• • •

Media Leaders Form Journalism Online, LLC

Company Will Be Global Platform for Easy Payment Option Enabling New Revenue Models For News In Time of Crisis
Charging for content will only exacerbate the crisis…

‘Strong interest’ already expressed by major newspaper, magazine companies
Because they have nowhere else to turn, and they’re all looking for a savior.

NEW YORK, April 14, 2009 – Citing “the urgent need” for a comprehensive, immediate plan to address the downward spiral in the business of publishing original, quality journalism,
It IS the business that’s the real problem, not the journalism
experienced journalism and media industry executives Steven Brill, Gordon Crovitz, and Leo Hindery today announced the formation of Journalism Online, a company that will quickly facilitate the ability of newspaper, magazine and online publishers to realize revenue from the digital distribution of the original journalism they produce. Unless the public refuses to pay for it any longer…and that’s exactly what’s happening.

“We have formed Journalism Online, because we think this is a special moment in time when there is an urgent need for a business model that allows quality journalism to be the beneficiary of the Internet’s efficient delivery mechanism rather than its victim,” said co-founder Steven Brill. Sour grapes. They’re pissed because they don’t want Internet content to be free any more. Too bad, bitches. “We believe we have developed a strategy and a set of services that will establish that model by restoring a stream of circulation revenue to supplement advertising revenue, while taking advantage of the savings to be gained from producing and delivering content electronically.”

The company will offer four key services to publishers.

First, Journalism Online will develop a password-protected website with one easy-to-use account through which consumers will be able to purchase annual or monthly subscriptions, day passes, and single articles from multiple publishers. The password-enabled payment system will be integrated into all of the member-publishers’ websites, and the publishers will have sole discretion over which content to charge for, how much to charge, and the manner of charge. And consumers will refuse to go there and pay for a damn thing. Why is this so hard for newspaper people to fathom?

“The website will provide a way for publishers of quality journalism to charge whatever they believe is a reasonable amount for their content in ways that are seamlessly convenient for readers,” explained co-founder Leo Hindery. Charging is not convenient at all. Nor is a system of varying prices “convenient,” except to the greedy publishers. “The only condition of participation is that the publishers have to charge for some portion of their content,” he explained. “They can do this while also offering the first portion of all articles for free (old-fashioned “tease” model — it’s bullshit), or by making a certain number of articles free each month for potential customers to sample (pricktease model #2), or by employing any other strategy they choose to balance the prospect of online circulation revenue with the need to maintain traffic and advertising revenue.” Starting to reek down here. Somebody open a window!

Second, Journalism Online will aggressively market all-inclusive annual or monthly subscriptions for those consumers who want to pay one fee to access all of the JOI-member publishers’ content. Revenues will be shared among publishers. Zero divided by zero still equals zero.

“This will allow readers the option of one simple subscription to a full range of quality content, while offering publishers a new revenue stream to support journalism, supplementing online advertising revenues,” said co-founder Gordon Crovitz. “This way, when a story from a publisher that is not one that a consumer usually reads ‘pops’ in popularity and becomes prominent, that publisher will benefit from all of the interest in it in a way that would not happen if the reader had to have a separate subscription to that paper.” Applying 19th century newspaper models to a 21st century technology is only going to make newspapers spiral faster into the ground. When are they going to get that they can no longer think in the old ways?

“We will market this feature aggressively, and proudly, because we believe that quality journalism is something that people understand must be supported,” Brill added. Plus, we’re greedy bastards, and you cant’ have it for free! So there! Nyah nyah nyah! “We’ve all heard some people say that Internet journalism needs to be free because other less-valuable content is free,” Brill continued. Wrong. That’s the way you want to perceive it. The fact is, content is free because users will not pay for it. Period. I’m in the news business, and I refuse to pay for it. Doesn’t that tell you something? “But we believe Americans know that advertising alone can’t support quality journalism – and the truth is that it never has.” Following old tradition is like following an old horse — you’re going to step in shit all along the way. In the 21st century, the paradigms of readership have changed. No one is buying the news because they can get it on tv and elsewhere for free. It is no longer the important product it used to be. The irony is that by using the Internet publishers of newspapers and magazines have dramatically improved the quality and breadth of their journalism with online updates, video reports, blogs, data analyses, and specialized beat coverage. The problem is that, with rare exceptions, they are getting paid nothing for it.” It’s the medium of the Internet. Get used to it. You aren’t going to change user behavior — you can’t. They will, instead, change the newspaper industry.

Third, a key initiative of Journalism Online will be to negotiate wholesale licensing and royalty fees with intermediaries such as search engines and other websites that currently base much of their business models on referrals of readers to the original content on newspaper, magazine and online news websites. Good luck with that. You’re not going to get a penny out of Google.

The company has appointed to its board of advisors New York attorney David Boies and Washington, D.C. attorney Theodore B. Olson, who is also former Solicitor General of the U.S. The law firm of Boies Schiller has been retained to assist in negotiations, as well as to counsel the venture and its publisher members on other legal and regulatory issues. In other words, they’re going to try and force the search engines and consumers to pay for news. They’re going to strongarm aggregators — whose links jump back to the news sites — and perhaps even bloggers when news is reported. Man, I hate bullies.

“We intend to help establish a more stable relationship between referral intermediaries and those who produce, at great cost, the content that is so important in ensuring that the Internet remains a powerful way for people to access the most important news and information,” explained Crovitz. We’re gonna strangle the cash out of them. And if you say extortion again, I’ll break your legs. “Whether it’s traditional news people or online-only journalists and bloggers doing the work, there are real costs associated with the quality journalism that helps create enormous value to search engines and other online services that don’t incur these expenses. Journalism Online will enable news publishers to negotiate from a position of strength. Bullies. Consumers will benefit because they will have greater choice HAHAHAHAHAHAHA, and search engines and other intermediaries will benefit because they will have access to more journalism.” Lies, bullshit, spin — really, is there any difference?

Fourth, Journalism Online will provide reports to member publishers on which strategies and tactics are achieving the best results in building circulation revenue while maintaining the traffic necessary to support advertising revenue. “Our members will be engaged in a bold new effort to recreate the journalism business model,” Hindery said. “We’ll be sharing reports and metrics from the front lines of that battle and, if asked, even consult with members on how to maximize the value for the journalism they invest in.” So the “experts” really think their 1850-1950 newspaper ideas are going to stand up to the merging here and now of news and technology? I’d help them dig their grave, but they’re doing well enough on their own.

“We’re convinced that publishers are ready to take this step and that the journalists who work with them are anxious for them to do so,” Hindery added. Journalists just want to keep their jobs, dude. Get a clue. “Both groups now believe that they can and must receive fair value for their online work. Passing the costs onto the consumer is gonna kick you in your journonuts. Whether it’s the smaller newspapers or online news sites with their unique local content, larger-city publications with their strong regional content, or national publications, all of them will be able finally to realize the value of the unique, original stories their journalists work so hard to produce.”

“We’re also convinced,” Brill added, “that readers, who have been paying billions of dollars a year for print journalism, will continue to support journalists by paying a modest, fair price for original, independent, professional work distributed online. They realize—as we do—that quality journalism is a vital component of a functioning democracy and free market.” Like consumers care about a functioning democracy and free market when they’re looking for the weather report.

“My experience with The Wall Street Journal taught me that people will pay a reasonable price to access exclusive, differentiated and essential journalism, whether delivered in print or online,” Crovitz explained. The WSJ is an essential to financial professionals across the country. Specialized markets can clearly charge for content, because it is absolutely needed by their readers. General news is a different product — and the dinosaurs still aren’t getting it. “News publishers, including digital-only operations, need to find ways to attract revenues from readers as well as from advertisers. Viable journalism enterprises need both, and we believe the solution must include state-of-the-art technology, smart pricing options and creative, aggressive marketing based on best practices for monetizing online content and services.” Oh, and suing search engines and aggregators eventually.

“We have had initial talks, and in many cases longer follow-up discussions, with most of the major newspaper and magazine publishers, as well as many online journalism enterprises,” Brill said. “They have all been extremely encouraging and expressed strong interest. They have nowhere else to turn — it doesn’t mean yours is a good or viable idea. It’s clear that this is exactly the right time for us to proceed as quickly as possible. It’s equally clear,” he concluded, “that our multi-faceted approach is what publishers are looking for (but not consumers), and that the combination of services we are offering—one password account and payment processing system for multiple publishers, an equally-simple subscription alternative for all content from all members, engagement from a position of strength with intermediary users of original content, and a clearinghouse for information on best practices—presents the best way for consumers and publishers alike to preserve quality journalism.”

Brill, the founder of Court TV, The American Lawyer, and Brill’s Content, most recently founded and was CEO of Clear, the airport biometric fast-pass security card. He also founded the Yale Journalism Initiative.

As publisher of The Wall Street Journal, Crovitz grew WSJ.com to become the largest paid news site on the Web, with more than one million paying subscribers. Crovitz, who founded the news-database Factiva and is a member of the board of directors of ProQuest and an advisor to several early-stage technology and online media companies, has long experience in using digital technologies to help news publishers generate significant and highly profitable revenues from readers and users.

Hindery, a longtime media executive whose positions have included being CEO of cable giants TCI and AT&T Broadband, is managing partner of InterMedia Partners, a media industry private equity firm. He currently sits on the board of advisors of the Columbia University Graduate School of Journalism.

• • •

HEREWITH MY CONCLUSIONS: The Internet is a new and original idea that newspapermen not only despise, but they are scared shitless of. Because everything is changing; their little, insular world is in massive upheaval, and they’re so stupid they don’t know how to run out of the way.

The subscription and micropayment models will never work with anything other than highly specialized web publications. But I can only repeat this so much. When the metropolitan dailies finally crash to earth, they’ll see the new reality all around them — and they still won’t figure out what to do.

There is no adequate defense, except stupidity, against the impact of a new idea.
•Percy W. Bridgman

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