Why traditional media has failed and will probably continue to do so
Jul 20, 2011
Traditional media fails due to poor content quality, outdated business models, and neglecting the core purpose of informing the public, leading to its inevitable downfall.
In a post published by the blog Playing the Devil’s Advocate, amid the tsunami that Rupert Murdoch is facing, the author (Advocatus Diaboli) points out the two causes that he sees as central to the irreparable fall of traditional press (content quality and business model). They are very pertinent (I discuss both below), but I would add one more: the distancing from the core business of journalism, which is (or at least, originally was) to inform people.
PTA begins the discussion by raising the complaint of major media corporations and their entertainment divisions as being the inability to compete with free material being offered on the Web. This is the excuse of 10 out of 10 executives of large corporations for the crackdowns on sites that offer free content (or "Pirate", depending on how you want to interpret) and also for the layoffs, salary reductions, outsourcing and the like. Record, for example, last week, announced that it will contain expenses, which would be very relevant if it had not invested almost R$40 million to hire two icons of infotainment, Roberto Justus and José Luiz Datena.
The argument of the "impossibility" of competing with free material is obviously a fallacy, caused either by bad faith in the debate, or by inability of strategic management (or both, of course). The point, according to the article, is that no one will pay anymore for very low-quality content (usually vilified by bad agencies, written by poorly-trained interns in bankrupt colleges) having free alternatives. This scenario, of being able to sell bologna as if it were caviar, died (fortunately for the audience). However, it is not known that publications such as the Economist will have to pick up trash on the street to sell what they do and this happens because the Economist sells a material that can only be done by qualified professionals - and to be clear, they do not have to be journalists.
A second point addressed by Diaboli is the resistance of corporations to accept the inadequacy of the new scenario with their business models. The commercial practices and advertiser capture of a newspaper are very different from what new media need to be efficient. In addition, large journalistic corporations carry a structure that is too heavy with a series of directorates, managements, divisions and the like that were being built during the consolidation of newspapers and stations as large companies. Thanks to technological advances, newsrooms of digital media publications can be much smaller, more agile and NEED to be free of political ties that commonly keep mediocre (but well-connected) professionals at the center of operations. As a condition for survival, digital media need to change overnight, as many times as necessary and require their employees to adapt. This agility will never have space in a company acculturated with the old style of the old newsrooms.
I still see a third focal point in the downfall of traditional media companies. One day, the first newspaper appeared. Its purpose was to inform people about things that happened. Over time, newspapers realized that they could make money if they opened their space to advertisers and became dependent on them. The business was no longer to inform people, but to make money. If it was once romantic to think of journalism that had limits for concessions to the commercial department, now it is not. In a lecture by Otávio Frias, I remember seeing him say that a journalistic company was exactly like any other, but it is not. The newspaper is there to inform, not to make money. If it is possible to do both, very well, but in practice (and as Rupert Murdoch is making ridiculously clear), it is not.
What is happening now is that newspapers depend on these massive revenue sources to support their massive structure, which, for a long time, has stopped having public information as a basic precept (after all, the revenues of the media come from advertisers and not readers). And now, the public not only realized this but also knows that it can get better informed from more sources and, like any player in any market, seeks to optimize the value of its money and increase the number of possible suppliers. In general terms, mass media will collapse for the same reasons that made them omnipotent in the 20th century - the massive money of advertising.
Naturally, this is a global view, not a general one. There are newspapers that are more concerned with informing and others less. Advertisers will continue to be fundamental to journalistic companies and the market will continue to have positive and negative pressures. What is changing is the public's ability to disapprove of a large company. As Jeff Jarvis noted, transparency is the new objectivity in journalism. There is a paradigm shift. There are publications that have a valuable product that cannot be found for free and there is ample space for companies to carve their paths amidst the Wild West of the digital horizon. This implies a change in mentality, both from the business point of view and the journalistic practice. This is the death battle that most of the old media will lose, sooner or later.