Walter Isaacson’s Time cover story (“Howto Save Your Newspaper”) finds the magazine’s former editor offering advice for the ailing corporate media. As he (and others in the business) see it, the problem is that newsis now being consumed onlinefor free, which of course makes it difficult to turn a profit (or, more to the point, the kind of profit expected by Wall Street investors).
And internet content is supported almost entirelyby advertising revenue, which Isaacson sees a potentially dangerous path:
Henry Luce, a co-founder of TIME, disdained the notion of giveaway publications that relied solely on ad revenue. He called that formula “morally abhorrent” and also “economically self-defeating.” That was because he believed that good journalism required that a publication’s primary duty be to its readers, not to its advertisers. In an advertising-only revenue model, the incentive is perverse. It is also self-defeating, because eventually you will weaken your bond with your readers if you do not feel directly dependent on them for your revenue.
Isaacson sees some papers experimenting with web-centric models, which is a problem:
These approaches, however, still make a publication completely beholden to its advertisers.
Huh. This is a little strange. Isaacson’s point is thatnewspapers and magazines depend on a three-legged revenue stool–subscribers, newsstand sales and advertisers–andthat relying too heavily on that third leg is a problem. But it’s odd to treat this as a future or emerging problem for corporate media. Advertising revenue is traditionally much more important to a newspaper’s bottom line than subscription revenue.Television and radio arealmost entirely dependent on commercial money.And journalists have reported for years that pressure from advertisers threatens editorial independence (along with corporate ownership). One recent surveywarned of ‘pressure from advertisers trying to shape coverageÃƒÆ’Â¢ÃƒÂ¢”Å¡Â¬Ãƒâ€šÂ and ‘outside control of editorial policy.ÃƒÆ’Â¢ÃƒÂ¢”Å¡Â¬Ãƒâ€šÂ Another found thatjournalists ‘report more cases of advertisers and owners breaching the independence of the newsroom.ÃƒÆ’Â¢ÃƒÂ¢”Å¡Â¬Ãƒâ€šÂThe dangers of relying on corporate advertisers should be well-known by now. And maybe–just maybe–such bottom-line pressures have helped create the problem facing Big Media today.
As for Time–they’ve made their own curious deals with advertisers (this one, I believe, may haveevenhappened on Isaacson’s watch):
Time magazine’s Spring 2000 issue was the culmination of the magazine’s “Heroes for the Planet” series. Launched in 1998, the series “profiled individuals around the globe who are working to protect the natural world” (Time, Spring 2000). But Time made clear from the outset that not all environmental issues would get equal treatment. That’s because the “Heroes for the Planet” series has an exclusive sponsor: Ford Motor Co. Asked about the conflict of interest presumed by having an automobile company sponsor an environmental series, Time’s international editor admitted to the Wall Street Journal (9/21/98) that, no, the series wasn’t likely to profile environmentalists battling the polluting auto industry. After all, Alexander explained, “we don’t run airline ads next to stories about airline crashes.”