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I Knew Things Were Bad For Media But…

May 17, 2010 | Neal | No comment

…I honestly never considered it in quite the way that is presented at the end of this article.  The majority of the article is a rehashing of what I think most of us know about the state of the news media.  Things like differentiating types of content and their place in the digital landscape:

  • Traditional Reporting of the Facts – it is redundant to have so many different accounts of the same facts and it isn’t likely a financially sustainable business to be in for more than one or two players;
  • Traditional Editorial (with Editors and Fact-checking and the like) – expensive but still has its place if the right business model can be struck because people will be willing to pay for quality;
  • Blogging – be it from actual amateurs or professional journalists with fewer restrictions (none of the editing/fact-checking) it is of uneven quality ranging from “just short of feature quality” to not very good at all;
  • Hyper-niche – there are many topics that never would have been covered in any depth before the advent of blogs because the barriers to publication and distribution were too high for an uncertain level of audience interest;

So after getting through all of that there was an extremely interesting chart that showed revenue per employee on an indexed scale.  It really hit home on how far things have gone downhill for the print media business.  Here’s the chart:

These distinctions are essential to the preservation of quality journalism. Many wondered why the Yahoos, Googles, Microsofts, where unable to setup news organizations despite their incommensurable wealth (to put things in perspective: Google spends five times more each year for its datacenters than the New York Times (NYSE: NYT) spends for its entire newsroom). Part of the reason is the return on such an investment. Financially speaking, the news business is not very appealing. See for yourself in this revenue per employee table.

Google being the 100 index :
Amazon:……………85
Microsoft:…………..53
News Corp:………..47
Yahoo:……………..40
Washington Post:…19
NYTimes:…………. 22
Gannett:……………13
McClatchy:…………10

Now granted, Google is a unique story from a revenue standpoint, but even Yahoo is crushing the big names in traditional media with the exception of News Corp whose performance probably owes more to its television properties than the print business.  Just a grim outlook if anyone is thinking that there will be a wave of investment in traditional media companies.  You have to think that the investments that WILL be made in media will be in ventures like Politico where there is a chance to start from a clean slate in establishing how (and in what volume) reporters and editors will do their job.  Just hard to envision the traditional publications ever really transforming themselves that way – from my experiences, there seem to be far too many habits, sacred cows, and assumptions for that to happen even as the financial picture gets worse and worse.


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