Does journalism create value?

Robert G. Picard impressed me as an awesomely smart person when I first saw him speak at a small online journalism conference a few years ago. Later I found out that he’s well-known and respected in the field of media economics. Last month an essay of his was published with the headline Why journalists deserve low pay — provocative, yes, but not exactly representative of the full contents of Picard’s argument. (A more enticing headline than mine here, surely.)

Picard says a lot that I agree with, and I’d like to outline some points here because I think they offer a much more useful framework for thinking about journalism’s future than many of today’s overly simplistic ideas in the field (for example, online subscriptions).

“Journalists simply aren’t creating much value these days.”

What a way to raise hackles! But Picard is absolutely right. He explains that journalism “is important not in itself, but because it enlightens the public, supports social interaction, and facilitates democracy.” Now, we all know that not all journalism is as noble as all that. Celebrity divorces and babies and so on do not enlighten the public, or support social interaction, or facilitate democracy. Neither does the crossword puzzle, or a lot of other stuff that sold newspapers.

Journalism can create three kinds of benefits for consumers, Picard says:

  1. Functional benefits include providing useful information and ideas.”
  2. Emotional benefits include a sense of belonging and community, reassurance and security, and escape.”
  3. Self-expressive benefits are provided when individuals identify with the publication’s perspectives or opinions, or when they’re empowered to express their own ideas.”

Now that we have a lot more sources of news and information to choose from, the economic value of these benefits is not as high as it once was. It costs less to produce and distribute content — in general. Picard is not saying it’s any cheaper to produce journalism. But look at those benefits again. Content and information sources other than journalism can provide these benefits to people.

It’s like the movie theater in the small town where I grew up. A small, family-owned theater, it only played second-run movies. It was open only on Friday and Saturday. There was one screen, and one new movie each week. From the time I was 9 or 10 years old, I went to that theater every week, no matter what was playing. I had very little access to movies otherwise.

Today I have Netflix, BitTorrent, and hundreds of cable TV channels.

The family closed that movie theater back in the early days of the VCR.

What is unique in journalism?

Not much, according to Picard:

Journalists are not professionals with a unique base of knowledge such as professors or electricians. Consequently, the primary economic value of journalism derives not from its own knowledge, but in distributing the knowledge of others.

However, Picard points out, nowadays “ordinary adults can observe and report news, gather expert knowledge, determine significance, add audio, photography, and video components, and publish this content far and wide (or at least to their social network) with ease. And much of this is done for no pay.”

So when journalists are doing exactly the same things, on the same platforms, they can’t make consumers pay a premium price. The consumers (who are not stupid) can get their desired benefits from others for free.

So Picard suggests that journalists will need to “redefine the value of their labor” and thus differentiate themselves from the common horde, which is providing lots of the benefits that we used to get only from the local newspaper (just as I used to see movies only at my local theater).

“Most journalists share the same skills sets and the same approaches to stories, seek out the same sources, ask similar questions, and produce relatively similar stories.”

Leaving aside, for the moment, all the amateurs, bloggers, citizen journalists, and such, we need to acknowledge that thousands of journalists at hundreds of news organizations are just replicating one another’s products.

Across the news industry, processes and procedures for news gathering are guided by standardized news values, producing standardized stories in standardized formats that are presented in standardized styles. The result is extraordinary sameness and minimal differentiation.

This worked as a revenue model when the only version of the day’s events was available to us in no more than one or two newspapers in our towns. We didn’t have access to the hundreds of other newspapers in the country. People in towns like mine had to subscribe to Time or Newsweek if they wanted any kind of real information about world events, because the local daily ran no more than a handful of three-inch wire stories a day from other nations.

(I remember finding a copy of The Washington Post during the week Nixon was in China, in 1972 — I was stunned to see pages and pages of coverage and dozens of photos. My local paper gave the story no more than a dozen or so column inches a day. World news was not a priority there.)

Picard’s solution for journalism

If you want people to pay you for a product, you must provide value — that is, give them something unique that benefits them and that they cannot obtain more cheaply (or free) someplace else. Picard puts it this way:

Journalism must innovate and create new means of gathering, processing, and distributing information so it provides content and services that readers, listeners, and viewers cannot receive elsewhere. … They must add something novel that creates value. They will have to start providing information and knowledge that is not readily available elsewhere, in forms that are not available elsewhere, or in forms that are more useable by and relevant to their audiences.

I really like how he points out that providing “scores of disjointed, undigested short news stories about events in far off places” is not a way to create value for the audience. I have written before about the excellence of the BBC’s online coverage of breaking news in distant corners of the world; one of the greatest appeals to me is the context provided (carefully curated) in the sidebar of the stories. I would be more willing to pay for BBC Online than for The New York Times; when I want background on a breaking story anywhere outside the U.S., I always go to the BBC.

Look at Consumer Reports — with more than 3 million paid online subscriptions — if you need evidence that Picard has the right idea about uniqueness. He makes great points about opportunities for the Boston Globe, The Dallas Morning News, The Des Moines Register, and the Chicago Tribune. I’m reminded of a friend of mine who reports for Reuters — when she was based in Pittsburgh, she was responsible for covering the entire U.S. steel industry. Likewise, in central New Jersey one has unrivaled access to sources in the pharmaceutical business. In other words, uniqueness does not limit a news organization to “small” local stories.

The challenge: Creating value for the future

Here’s where Picard lays out our marching orders:

Finding the right means to create and protect value will require collaboration throughout news enterprises. It is not something that journalists can leave to management. Journalists and managers alike will need to develop collaboration skills and create social relations that make it possible. Journalists will also need to acquire entrepreneurial and innovation skills that make it possible for them to lead change rather than merely respond to it. [Italics and boldface added.]

I must confess, here is where I stop short and scratch my head. I come from the old school, from journalism before the Internet, when no one ever said “entrepreneurial” and “journalist” in the same sentence. How do we learn to be entrepreneurial? How do we learn to build and test rapid prototypes? How do we foster innovation? How do we launch new products and measure their success? How do we set priorities for instituting these bold changes?

I have watched dozens, maybe hundreds, of failures in journalism products in the past 10 years. A lot of them can be attributed to a clear lack of uniqueness. Many were too expensive. Most were too slow — they took far too long to launch.

But above all, I would say most failed to provide real benefits that people wanted — AND could not already find elsewhere.

Source: “Why journalists deserve low pay: The demise of the news business can be halted, but only if journalists commit to creating real value for consumers and become more involved in setting the course of their companies,” by Robert G. Picard. The Christian Science Monitor, May 19, 2009.

11 Comments on “Does journalism create value?

  1. Excellent piece, Mindy.
    You’re right, Picard provides a very useful framework to build on, and has some very thoughtful and constructive ideas.
    You’ve also reminded me that I need to write about some of the profitable and journalistic entrepreneurial successes I’ve been involved with ( and we can take what worked there and build on that as well.
    Thank you!

  2. I’m agreeing wholeheartedly, and scratching my head, too. A few thoughts I posted on my blog: Perhaps we should start by requiring a few well-chosen business classes in our curriculum? Or by encouraging journalism students to go on for MBAs and recruiting business graduates into our journalism grad programs? Or by studying a little business ourselves?

    As a journalism historian, I can’t help looking at the history of journalism entrepreneurship in my town. I think there are always lessons in history useful for us today.

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  4. I think you’re dead-on in most of the failed experiments failing to provide benefits or, at least, unique benefits.
    I think the problem, too, is that they probably failed provide financial benefits for those involved. We’re reaching a real tipping point in testing the will of people do this sort of work for less-than-livable wages and longer-than-usual hours, especially in small markets.
    Yes, Picard is right, even if only philosophically, that many journalists deserve low pay because their content is little or duplicative. But is there any indication the pay will be better for (most of) those who break out of that mold? I don’t see it.
    If I’m right (and I hope I’m not), then what happens?

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  6. Once you get past the provocative (somewhat offensive) headline the article has some really valuable insights. But I don’t think his recommendation that journalists change the business from the inside is very realistic. For journalists working in traditional mediums, management isn’t really interested in sharing power or listening to its reporters’ business ideas.

    That’s why so many traditional medium journalists have a second life on the web as bloggers and online journalists. Problem is, we’re actually decreasing journalisms’ inherent value by doing it for free. It’s a bit of a catch-22: we can’t change our “big” newsrooms, so we take to the web…but by putting quality product out there for free or virtually free, we’re contributing to the problem.

    @ Stacy: I agree journalists should be more in tune with the business side of the industry, but I disagree they need an MBA to do that. All those MBAs didn’t stop the mortgage crisis or the stock market from falling or GM from entering chapter 11. I don’t think theoretical business knowledge is going to help. The industry needs practical problem solvers and that often has nothing to do with grad school.

    I wrote a post on a similar topic this week on my blog:

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