Two views of the future of news media

US newspaper circulation figures over the last 50 years show long-term, generational declines. Source: Hal Varain, 2010, "Newspaper economics: Online and offline", Mountain View, CA: Google

Two long investigative essays published in the last week – in two of the most famous mastheads in US journalism – offer two very different perspectives on the emerging online reality for news journalism.

In The Atlantic, veteran feature writer and editor James Fallows enters the Googleplex to find that, unexpectedly, Google cares deeply about the future of news media:

EVERYONE KNOWS THAT Google is killing the news business. Few people know how hard Google is trying to bring it back to life, or why the company now considers journalism’s survival crucial to its own prospects.

Meanwhile, in the New York Times Magazine, Andrew Rice takes an in-depth look at some of the start-up online news entrepreneurs looking to create new products for the emerging online news marketplace. He discovers a world where online evangelism from displaced old-media journalists and editors is combining with the new realiy of news aggregation, Google search engine optmisation and vastly diminished advertising incomes to create a very different news landscape:

Online, advertisers have immense power. Because it’s easy to track who is clicking what, they can aim with efficiency and typically pay according to the number of times their ads are actually viewed. Instead of sending word of its shoe sale to a million print newspaper subscribers, who may or may not be looking for shoes, a store can buy the page views of 50,000 people who are reading articles about fashion. Or the advertiser can place ads on heavily trafficked portal sites like Yahoo and AOL, both of which are currently expanding their production of original journalism. Or it can pay Google to insert its ads into search results. Or it can go to one of the large digital advertising networks that have arisen in recent years and buy unsold “remnant” page views at deep discounts. There is a lot less waste and a lot more choice, and the upshot is that advertising, which once produced robust margins for publishers, now sells for spare change online. Generally speaking, while some ad placements — like those on a site’s home page — go for a significant premium, pages of individual articles, if sold at the going rates, bring in between a penny and nickel each time a reader looks at one.

Bottom line? The halting efforts of Australian newspaper proprietors like Fairfax and News Limited to ready their business models for the online revolution are far too little and very, very late.

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