State of Journalism: Creative Destruction Rules the Day

This post is part of a series in which LinkedIn Influencers analyze the state and future of their industry. Read all the posts here.

I began a talk to a group of Ohio bankers a few weeks ago by making the case that their product and mine--money and words--have a key trait in common. Both are easily converted into digital zeros and ones.

The upside of such products is that you can deliver them worldwide at virtually no marginal cost. The downside is that your competitors can, too.

In journalism, the spread of digital technology has turned the industry on its head. It’s done so by undermining the businesses two economic pillars – advertising and subscriptions.

On the ad side, since the relatively robust pre-financial crisis year of 2006, total newspaper ad revenues have dropped 55% to $22 billion, according to the Newspaper Association of America. Think about it: over half the industry’s main revenue source has disappeared in less than a decade.

The only bright spot for ads has been online. There, revenues rose to $3.3 billion in 2012 from $2.7 billion a half-dozen years earlier. The problem is that they still comprised only 15% of industry revenues and don’t come close to making up for print losses.

The other pillar, subscription revenue, has been surprisingly stable by comparison —especially when you consider how much of journalism's product is available for free online. But even here, the relatively good news is that subscription revenue has flat-lined at around $10 billion annually for many years as publishers have compensated for falling print readerships by raising prices.

For newsroom people like me, the industry's economic contraction has been playing out with little mercy since the technology bust of 2000. It’s been particularly painful since the financial crisis, with the ranks of newspaper editors and reporters falling from around 55,000 to 40,000 people.

My 18 years at Forbes through the spring of 2011 mirrored the larger print journalism world's trajectory. Early on, the deal was that young, ink-stained reporters would work for next to nothing, pay their dues and either move up our out.

For those who made it, the benefits were lush. We got to work in an historic building in Greenwich Village which itself emanated solidity and permanence (see photo above). The company offered a hefty 401(k) match and a standard defined-benefit pension. It picked up the entire cost of childbirth. On closing nights, dinner was catered or cooked up by Forbes' chef. We also got the occasional ride aboard the Forbes Highlander, replete with a kilt-clad bagpipe player and fancy cigars. Pretty good perks for a job that enabled you to meet the business world's movers and shakers and ask them embarrassing questions.

As times got tougher, the benefits dried up. Then the financial crisis led to three rounds of layoffs. Those of us fortunate to emerge with jobs were told we now had two of them. In my case that meant becoming personal finance editor for Forbes.com as well as the magazine.

Surviving, I learned, meant adapting to the brave new world of digital publishing. With magazines, the fit and finish must be perfect because there’s no way to recall a million glossy copies. The ethos of my online colleagues, in contrast, was to publish early and often and fix mistakes on the fly.

The cultures clashed. But in fairly short order we magazine folks caught on to new tricks like video, slideshows, SEO (search engine optimization) and web analytics. The web folks learned the craft of writing magazine stories.

The good news in the news business: Amid all the destruction, there’s been lots of creation, too. Over the past couple decades as countless publications have folded, new ones have emerged. They include everyone from youngish giants like Bloomberg and Huffington Post to Politico, BuzzFeed, Business Insider and Quartz.

Further afield, we all get information from places that didn’t exist a few years or decades ago. Facebook. Instagram. YouTube. Wikipedia. WebMD. It’s not traditional journalism, or journalism at all, but consumers often don’t care. They’re after information and savvy enough to consider the source.

As the types of information available have exploded, the lines between them have blurred. Do Jon Stewart’s viewers really consider his news fake? Are bloggers journalists? Should respectable media mix so-called native advertising (the trendy term for online advertorials) with their work?

Journalism has struggled with similar questions forever. Mistakes are being made in the struggle for survival. That's what happens in a business under pressure.

At American Banker, the signs of a media world in transition are everywhere. We still put out a daily newspaper that thousands of readers pay top dollar to receive. But we're intensely focused on a digital strategy. In the end, the trick is to aim for the right mix of old-school journalistic quality and digital-age delivery.

My guess is that print will continue to play a role, albeit a diminished one, like radio’s in the TV era. Or TV’s in the Netflix era. Online, journalism will continue to grow and evolve. As I’ve learned at Forbes and American Banker, for those willing to adapt and adopt, it’s a tough business but still a great place to spend a career.

Neil Weinberg is the editor-in-chief of American Banker. The views expressed are his own.

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Enjoyed this post? Read what other Influencers had to say:

? Pete Cashmore on the State of Digital Journalism: The Media Business Is, And Will Be, Just Fine
? Lauren Zalaznick on the State of Television: It All Comes Back to Content
? Steve Rubel on the State of PR: When the Worlds of PR and Publishing Collide

Photo: Forbes