Asymmetrical Information

"WSJ online profits top print"

Yes, but not because the online profits surged, rather because the print profits plunged.

"Earnings plunged by 54 percent ... Kann blamed the slump on weak advertising at the Journal, which lost 8 percent of its ads in the first quarter and expects the slump to continue."

So it wouldn't seem this is a triumph for the on-liners, unless one wants to ascribe the larger profit plunge to the online edition cannibalizing the print one (which the story doesn't), which doesn't seem a standard of triumph.

This seems more like an old-fashioned management problem at Dow Jones than the death of MSM at the hands of the onliners -- which may come, but not so rapidly as some think. (Cable TV has been killing network TV for a good 30 years now, slowly.)

BTW, *****'* continuing surge in revenue seems to indicate that some people are making money from online advertising, both buying and selling it.

Note: This post initially was blocked due to "questionable content" consisting of the name of a prominent internet search engine. You'll have to guess which one.

You rightly point out many information gathering functions which the MSM currently performs. How will they be paid for? - we don't know yet. But for the truly valuable functions, somehow they will be paid for. Demand creates supply.

The main problem I have with paying for online newspapers is that no one of them (not even the WSJ) is worth the subscription price by itself. The successor to the current MSM (which may come from within the current MSM) will be whoever puts together the right-size package.

What people will NOT pay for any more is opinion. The blogospher has shown that there are more than enough good people willing to do it for free (more accurately, for the chance at influence). That's why even the WSJ puts their opeds on the free opinionjournal site - the influence they get from wide dissemination matters more than reimbursing the writer.

G00GLE, gO0gle, Goog1e, gO0gLE! Take that, MT content filter!

Seriously, though, I'm not annoyed so much by online ads as the shameless attempts by advertisers to force your attention toward them -- pop-ups, pop-unders; stroboscopic animations; Flash displays blocking half the screen for several seconds; obnoxious soundfiles that lift you out of your chair, shoes, and pants; bare, barely-legal hotties promoting dating services that, last time I bothered to look, were filled with ranks of forty-something divorceés; and on the list goes.

My newspaper generally doesn't do that, and sometimes I actually bother to read the ads.

1)Online ads work a lot better, and are less annoying...even helpful...when placed in the proper venues. A digital camera ad makes more sense of a photography blog or website than on a website having to do with politics.

2)The emergence of "digital ink" technologies is likely to significantly change the balance between paper and on-line media. http://photoncourier.blogspot.com/2004_07_01_photoncourier_archive.html#109016945074280376

"What people will NOT pay for any more is opinion." But the "news" reporting from the MSM seems to be more opinion than fact, too.

But without CNN, ABC, WaPo, NYT, WSJ, and so forth, how would bloggers even know what the weather was going to be like, much less what was going on in the world?

In all honesty, Megan, you're perfectly correct. The problem is that the traditional media are not sticking to their lasts—they've been incrementally abandoning reportage for opinion because it's cheaper. If the trends of the last twenty years continue, the advantage will go to bloggers since there will be onsite blogger coverage everywhere and informed opinion from bloggers at a level traditional media can't hope to replicate on every conceivable subject.

Insofar as the traditional media do good professional journalism they'll continue to be a valuable and essential resource. Insofar as the traditional media are just bloggers with large production budgets, who needs them?

Ludwig Von Mises and Milton Friedman are deeply ashamed of you. Has somebody lost their faith in the free market? Something will be worked out. In one way or another, consumer demand will be satisfied.

In one hand you have the MSM ... in the other ... bloggers. See which hand fills up first.

I’ve worked in MSM distribution (for example,getting Jane’s current employers around Russia) and cover prices just about pay for the dead tree distribution network and newsprint itself. It’s the advertising that pays for the news gathering. So if online advertising doesn’t match up with the revenues of dead tree versions, I think Jane’s right, those operations are going to shrink.
What I suspect will happen though is that, just like the WSJ, we’ll have to pay subscriptions to access the news gathering organisations that survive.
The people I really think are going to get screwed are the syndication services. Currently Dear Abby is published in 1200 or so newspapers. If it all goes onto the web, why would there be any more than one site?

I disagree. There is nothing magical about the traditional media that makes it uniquely capable of collecting and diseminating news. The fact is that they are the best at that job at the moment because they have the advantage in resources and experience, but they are not the only ones capable of that job. Nor is the way they do that job the only way it can be done.

Your asking how bloggers would consume news without the traditional media is valid but misses quite a few key things. It's a bit like asking how people will get their computing done without a mainframe. Or how people will keep in touch with each other across large distances without the mail. Or how people will travel without horses. There are alternative ways of doing these things, sometimes evolutionarily or revolutionarily different ways (like the microprocessor, like the telephone, like the automobile, etc.), and sometimes better and more efficient ways.

News collection and distribution is a fundamentally straightforward job. Large news organizations operating on different principles than the old guard can and have been created in the past, there is nothing stopping the creation of yet more new and different news organizations in the future. CNN itself is only a few decades old, and it was started on practically a shoestring budget. For every industry giant of today there was a time when it was small and insubstantial. Yet from those humble origins companies like HP, Microsoft, G00gle, Ford, GE, Disney, and AT&T have grown.

In short, I think you understimate the capacity for change of society and industry. Such capacity exists, even for the news media, and is quite substantial. What looks today like small time experimentation or hobby, e.g. blogging, wikis, inverse searching/tagging (flickr), etc, may tomorrow sprout up industries no less substantial than CNN or Reuters or The New York Times.

Robin..the pc/mainframe analogy is actually an interesting one. I believe it's fair to say that many mainframe computing types reacted to the rise of the pc with a kind of dismissiveness similar to that we're now seeing from the MSM regarding blogs (although nowhere near at the same level of hysterical nastiness)

It did turn out that the pc people had something to learn from the mainframe people (importance of regular backups, restart & recover procedures, etc) and mainstreams did indeed survive, but lost their dominance.

Every time I start thinking about "news," I get a headache... Foreign correspondents, professional newsgatherers whose expenses are paid by news organizations, would seem to have a great advantage over your average blogger who might or might not have access to someone with access to something interesting in Beirut, for instance. But the blogosphere is spiderwebbing all over the place and it's conceivable that a blogger with a good rep, such as our hostess, could put out feelers along the webbing and FIND the correspondent with the access in the place that she needs. The question then is: does that person have the ability to REPORT?

I've heard journalism types on both sides of the question: reporting is dead easy, reporting is incredibly hard. Clearly some reporters go farther out of their way than others to try to present a story without their own biases too prominently displayed. Can the same apply, ever, to unpaid and untrained individuals who might or might not have an axe to grind? Ouch, my head...

On the other hand, it seems to me that when Milblogs and Iraq the Model and its opposite numbers and Blog Mela are available, even if some of the bloggers are enTIREly biased and make no bones about it, at least blog-journalists have an opportunity to take in multiple points of view from people who may even be attending the same rally/demonstration/speech.

The problem I keep having is fact-checking. I used to work for a dot.com, which correctly advertised itself as the largest furniture site online at the time (not Furniture.com, btw), but we - all six or eight of us - operated out of two rented offices, and eventually all of us were working for free because venture capital just wasn't happening any more. There was no way for the average consumer to find that out. How can the buyer, or the consumer of news, beware, when it's so easy to create a persona of much more gravitas than is warranted?

Jamie, there are two points I'd like to make in response. First, you are viewing "blogs" through a constrained prism which barely has room for the way things are today and definitely has no room for the way things could be tomorrow. Indeed, it doesn't even fully encompass today's reality. Again, there's nothing special about journalism, or capitalism, or profitable news gathering. Nor is there anything special (or rather unspecial) about the internet that lends a greater degree of difficulty to news gathering in that environment, indeed, quite the opposite. The news is a process, and a business, thousands upon thousands of news organizations have been created throughout the eons, some successful, some not. There's no great barrier, other than general inertia, hampering the creation of, say, a new large scale completely online "blogger based" news gathering company or such like. At this point we know not only that this sort of thing is technically feasible but that it is financially feasible. There really is enough potential revenue available through online publishing to support a business of this sort. Indeed, we've already seen the first few hints of this sort of thing in niche areas and on small scales, imagine what will happen 5, 10, 20 years from now. It's immensely short sighted to look at the blogosphere as it exists now and proclaim that nothing will grow out of it that might replace CNN. I would be quite willing to bet that in 10 maybe even 5 years from now something will have grown out of it on that scale.

Second, similarly, there is nothing overly special about the internet in its ability to mislead people. Oh, I'm sure many people think there is, but there really isn't. There are different ways to do so, certainly, but on the whole I'd call it a wash. People and companies have been misrepresenting themselves for many thousands of years, the internet is just a new channel for that rich vein of effort. Indeed, there are whole industries of deception and misrepresentation of the facts: cosmetics, dentistry, plastic surgery, fashion, advertising, marketing, etc, etc, etc. Yesterday, or even ten, a hundred, a thousand years ago, how could the buyer, or the consumer of news, beware? The answer is that they couldn't, they just accepted (and still accept) the degree to which they couldn't. You do not see (because, of course, like all of us, you have been long inculcated in their lies) that big organizations like GM or Microsoft or Reuters or the US federal government are not at all like what they make themselves out to be. Underneath they are much different, and not nearly so impressive.

There was a time not long ago when even the keenest minds in science believed that there was some unfathomable essence, some "quintessence", which suffused the flesh of living things. They believed that there was a fundamental difference between the materials of living creatures and of inanimate objects, down to the smallest scale. But this was found not to be so. It was found that there is no quintessence, there is no differentiation between the materials used to construct life and the materials used to construct non-life. Indeed, that, so far as was able to be determined by observation and experimentation, life was a mechanism with parts composed of mundane materials (Carbon, Oxygen, Nitrogen, Phosphorous, etc.) That revelation was no small thing, it was a leap of understanding that became the foundation for modern chemistry and biology.

Today we have somewhat of a similar situation in that there are many people, even incredibly smart people, who seem to believe that organizations like the MSM, or the US federal government, or the UN, or what-have-you, hold within their interiors some degree of quintessence. Some unfathomable property which would forever elude those who might attempt to create from scratch new replacements.

There is no magic. The "magic" is there in the design, in the construction, it may be unfathomable to some but it is very real and very amenable to tinkering and replication. If you doubt me, ask James Madison, or Bill Gates, or Jeff Bezos, or Ted Turner...

The internet and TV cut into newsprint but it can adjust.

The media that is getting hurt are those who try to create news stories to suit their agenda. Those who honestly attempt to collect, understand, and report events will survive.

I think the Daily Worker may still be printed. Someday you may hear the same comment about the New York Times. It is up to them.

Robin:

I expressed myself poorly. I didn't mean to imply that I believe the MSM is either Superhero of News or unchallengeable because sacred - the opposite, in fact. I've been tremendously impressed just this year with the reporting abilities of ordinary(?!) bloggers who have either happened or managed to be where news was happening. And I certainly recognize that fact-checking is a problem with the MSM to an increasingly obvious extent.

But until recently (corresponding, not coincidentally I think, with the explosion of the blogosphere), I believe many of us news "consumers" thought that the fact-checking was being done before the news hit the paper or the airwaves. Now, we're faced with information coming at us from the somewhat discredited news media as well as from a plethora of un-credentialled sources, and we have to do our own fact-checking - something we're not particularly equipped to do. It's not an insurmountable problem; in fact, it's what my husband might call a "high-class problem" - the kind people want to have. But it is a problem. We're in a period of transition and I'm not sure how the scales will eventually balance. We'll get better, faster information because of it, but in the meantime we have to figure out what's data and what's garbage.

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