The return of bundling and the indirect value of ‘serious’ journalism

In the past, I’ve argued that serious journalism isn’t becoming less profitable, so much as being exposed as having never profitable in the first place. In doing so, I’ve leaned on Clay Shirky who argued the same in 2009:

Journalism written for that fraction of the population that follows the news closely has always been subsidized. For the last century, newspaper journalism had direct subsidy from advertisement and cross-subsidy from sports fans and coupon clippers who never really cared about the city council or the coup in Madagascar. The packages containing news have been so bundled and cross-funded that we’ve never really known precisely the size of the audience for actual civic-minded reporting, or how much direct fees from that audience would amount to. We do know, however, that the rough answers are “Small” and “Not much,”

Today I want to put forward an argument that he and I are wrong. I’m not sure I believe this, but I think recent trends in media make it necessary to consider. Back in February I laid out what I think of as the best argument against Shirky’s:

In my mind, the best retort to Shirky’s point that the news was always subsidized is to argue that papers like NYT gain an indirect benefit with their credible reporting. Sure, when readers got the paper they looked at sports and lighter stuff, but they chose to buy such a premier paper in the first place in part to associate themselves with the seriousness of the brand.

These days, I see evidence in favor of this rebuttal everywhere I look.

(Quick note: There’s a lack of clarity around what actually should count as serious and not, as I discuss here. That’s not what I’m interested in now. For the purposes of this post, by ‘serious’ I just mean in terms of reader perceptions.)

There’s been a lot already written about ‘unbundling’ in media, meaning that the unit of media that we buy/consume has narrowed. We don’t subscribe to one paper; we sample articles from many sources via Twitter, Facebook, RSS, etc. Likewise, with geography less of a factor, we saw from the early days of the blogosphere on a strong move towards niche coverage. Blogs and websites could dive into a particular domain and cover it better than general journalists could ever dream.

The problem, then, was that the international reporter no longer got subsidized by the style columnist. In an age of declining media profitability, why would anyone bother to pay someone to cover Africa? The trend was toward narrow and deep, and better to go narrow in the niches that lots of readers really cared about.

Except this theory just does not do a good job of describing today’s landscape. It can’t explain why The Huffington Post would spend money hiring NYT reporters to do investigative reporting. Or why Buzzfeed would poach Ben Smith. Why worry about having a respected financial reporter at Business Insider rather than just being a slideshow shop heavy on aggregation? Even Gawker is taking pageview pressure off its stable of writers by hiring Daily What’s founder to go gung-ho after pageviews. None of these, to me, square with the basic logic of unbundling. What’s going on here?

I don’t get no respect!

The media economics answer here is CPMs, the rate at which advertisers pay media properties per eyeball. Some eyeballs are more valuable than others. That’s why advertisers will pay more to advertise next to content targeted at “the global business elite” than it will  for, well, almost anything else.

That alone isn’t at odds with the unbundling thesis. Niche business sites could collect those limited eyeballs at higher rates, while other sites could rack up the pageviews at a lower rate.

But what I see in the various re-bundling efforts above is a possible confirmation of the indirect value of serious journalism. Because the dirty little secret is that the ‘serious’ wealthy, educated person picking up the New York Times is still more likely to read about the best coffee in Manhattan than about the politics of Libya. But they wouldn’t pick up the paper if that Libya content weren’t there. Because they pride themselves on being a very serious person.

Translated to the online world, some readers who garner high CPMs based on income or other factors love the same click crack that everyone else does. But they’re more likely to read it at a ‘respectable’ outlet that also employs Ben Smith or Joe Weisenthal.

All of this is just a very long-winded way of saying that brand matters. And that ‘serious’ or civic-minded journalism may have some business value. It’s just indirect.

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