By Brian Kovalesky, StartUp Beat Editor
When I was a freshman in college, I was convinced that I wanted to be a newspaper reporter. It was a goal since elementary school when my class read a story about the daily life of a reporter. To me, it seemed like the best job anyone could have. This desire was only reinforced when I watched All the President’s Men for the first time. For those that haven’t read the book or seen the film, it is the story of Washington Post reporters Carl Bernstein and Bob Woodward and their exposé of the Watergate scandal.
When I started what has turned into a long collegiate career back in 1994, I eagerly jumped on the print journalism track. But what I was confronted with was an industry that was highly protective of its old ways of doing things, had erected high barriers to entry for young and talented reporters with fresh ideas, and demonstrated what seemed to be little concern for a steady loss of revenue, industry-wide.
Fast-forward to the summer of 2013, and a media news item that I think is particularly illustrative of the unwillingness of old-guard print outlets to adopt an entrepreneurial mindset in an era of change. The news was the Wall Street Journal company’s decision to part ways with its popular and highly-regarded online technology reporting brand, All Things D—founded by reporters Kara Swisher and Walt Mossberg as a digital section of the WSJ focused on technology news and event production. Swisher and Mossberg brought considerable credibility to the site from their long careers as respected technology writers. For years, Swisher had covered the Silicon Valley scene from the Journal’s San Francisco office—breaking numerous big tech stories and establishing herself as one of the most influential reporters covering the Internet. Mossberg has long been the king of product and service reviews through his column in the paper. Companies have often based entire product rollout strategies on Mossberg’s reviews. He is one of the few columnists who has the power to truly make-or-break a product.
In 2003, the two tech journalists produced the inaugural All Things D conference—an instant hit because they leveraged their contacts to bring the heaviest of technology’s heavy-hitters to a setting that featured unscripted one-on-one interviews conducted by Swisher and Mossberg. The All Things D website followed in 2007, and the brand quickly became the gold standard for technology industry reporting—with a growing staff of reporters and clearly a considerable amount of autonomy within the WSJ.
With such a successful brand within its network, one would think that the WSJ would continue to cultivate the site and help it grow. But this is the newspaper business, which has held on with dear life to outdated ad models and to memories of an era where they were the gatekeepers of news and information; and the WSJ/Dow Jones & Company announced in late September that it was parting ways with Swisher, Mossberg, and All Things D at the end of the year. Instead, the WSJ plans to add new staff, expand its tech industry coverage, and build a new online technology news property, according to a statement.
While the future of All Things D is still up-in-the-air, the site will no doubt continue its robust growth, and speculation has been rife about investors being brought on board by Swisher and Mossberg to fund the soon-to-be independent site.
The situation demonstrates why newspapers and old guard print media outlets, as we know them, are doomed. Their executive leadership fails to embrace an entrepreneurial spirit in a time of revolutionary change for the news business. The most significant failure in this regard is not embracing talented and experienced people—illustrated perfectly by the All Things D example. Journalism is about more than good writing—a rare enough skill; it’s also about contacts and trust. These essentials take years to develop and cultivate, and no one in the technology business has better connections than Mossberg and Swisher. Ask any successful entrepreneur, and they’ll tell you that the key to building a business around a good idea is hiring and keeping excellent people—an idea it seems outlets like the WSJ have yet to embrace.
Additionally, newspapers in general are wedded to increasingly outdated advertising models: traditional display advertising and print subscriptions. Sure, there are some exceptions, and there are innovative and very effective display advertising and subscription models that work, but newspapers haven’t yet discovered these on a large scale. Numbers from the Newspaper Association of America (NAA) paint a stark picture. According to the NAA, overall newspaper print ad revenues increased from $2.07 billion in 1950 to 47.408 billion in 2005. That year, newspapers also took in $2.027 billion in online advertising, bringing total print and online newspaper advertising to a record $49.435 billion. Since 2005, however, newspaper print advertising revenues have dropped dramatically, and online ad revenues have increased only slightly. Any entrepreneur or investor would instantly recognize this as a broken business model in need of immediate attention, especially since newspapers carry significant overhead and relatively large reporting staffs. Additionally, in 2005, when paper print ad revenues hit the 50-plus year high, the writing was already on the wall that the diffusion of content online would significantly change how people consume news and how media companies would make money. In other words, the Internet is not killing newspapers—newspapers are killing themselves.
Finally, newspapers have failed to embrace the entrepreneurs within their own organizations, and generally failed to accept bloggers and independent reporters as equally legitimate news outlets. The case of Mossberg and Swisher, and WSJ leadership’s belief that they can just build a new version of All Things D—presumably at a lower cost—is the perfect illustration of this, but there are other prominent examples. Because I cover startups, Matt Marshall, founder of VentureBeat, comes immediately to mind. Marshall covered venture capital for the San Jose Mercury News for five years, most memorably through his columns for the ‘Silicon Beat’ section, before starting VentureBeat—which has become one of the most popular and respected outlets in technology media, while the Mercury News languishes along with its newspaper brethren. Political news outlet The Politico is another example. Although it is owned by Allbritton Communications, since its founding in 2007 it has attracted entrepreneurial journalists from the Washington Post, USA Today, The Boston Globe, and other big name papers, while growing exponentially year-over-year.
The situation looks dire, especially as newspapers seem to reject adopting a startup mindset as their revenue and audiences continue to decline. In its latest report on the state of newspaper revenue, the NAA argues that newspapers are starting to diversify their revenue sources beyond traditional advertising, leading to only a two percent decline in revenues year-over-year in 2012—a positive sign, but not exactly an endorsement of newspapers’ business models.
There is however, a glimmer of hope that real change may be on the horizon—and his name is Jeff Bezos. I’m not naïve (or optimistic) enough to think that Amazon.com founder Bezos, through his recent purchase of the Washington Post for $250 million, will by himself save the old guard print media business. But his purchase breaks a vicious cycle where newspapers desperately sell to other ‘traditional’ media companies and simply continue the long decline; and Bezos has demonstrated an ability to innovate and make big things happen.
Whether or not the Washington Post becomes the vanguard for a new era for newspapers is yet to be seen, but in the meantime, All Things D will continue to be on my essential reading list…and the Wall Street Journal will not.
