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Newspapers as markets

What do we buy when we pay for a newspaper? Everybody says it is not the paper, and it is difficult to object. But perhaps it is not just the content as well.

After reading dozens of articles about the future of the newspaper industry, one would believe that we are condemned to reading increasingly lower-quality journalism (because writers will be forced to pursue only the most eye-catching stuff and publishers will stick to risk-avoiding choices in content and authors) or to an ever lower number of alternatives – as larger conglomerates will probably be the only possible way out of the crisis for some newspapers.

All the innovative thinking is aimed at improvement in technology (especially regarding physical support – eBooks and similar, but also in distribution) and refinement in revenue model, with different balance in income from advertisement on the one hand and subscription or purchase on the other. But nothing that really looks out of the box.

While I was writing this post, I came across this article on The Economist, celebrating 20 years of the web and looking at how the web has changed the way science and research work. The final suggestion is that a huge opportunity for further advancement – always looking at how communication tools are used by scientists and researchers – would be in creating a mechanism that could make use of reputation as an economic quantifier – a monetary unit for ideas:

no one yet knows how to measure the impact of a blog post or the
sharing of a good idea with another researcher in some collaborative
web-based workspace. Dr Nielsen reckons that if similar measurements
could be established for the impact of open commentary and open
collaboration on the web, such commentary and collaboration would
flourish, and science as a whole would benefit. Essentially, this would
involve establishing a market for great ideas, just as a site such as
eBay does for coveted objects.

This is a very clear suggestion for an attempt at finding a way to design a mechanism to make the reputation economy work (note: some hints about what this means in relation with blogging and for modern democracies), so I tried to make it fit into the ideas I was trying to frame.

I summarized all the exchanges that I was able to identify, with both monetary and intangible assets, in the following diagram:

Newspapers

The good old traditional money-generating exchanges are:

  1. the publisher is paid by advertisers for brokering readers' attention towards ads;
  2. the reader pays in order to access restricted content (restricted means that it is necessary to overcome a barrier, whether it is "getting the paper in your hands" or "logging in to your paid account");
  3. the writer is paid for writing quality content.

This is, with merely quantitative adaptations, what has worked for hundreds of years and somehow survived the first twenty years of the internet age. Will it evolve, or is a thorough and radical change needed?

The opportunity space is twofold, as new revenues could hypothetically come from exchanges that are currently not monetized – but also from new exchanges that still have to be enabled (both monetary and non-monetary). I'd especially point my attention to a restricted number of remarkable directions:

Reputation flows from reader to writer

This channel is the one that makes it possible for authors to rapidly increase their influence and popularity by means of the enormously complicated reputation machine that is put in motion with comments, links, trackbacks, tags and bookmarks on a thousand social platforms. How many authors are widely recognized as influential because of the augmented aura they have been able to build around their ideas?

Advertisement affects the publisher's reputation

A fascinating one comes from advertisement: what happens when readers perceive an ad as a contradiction with the system of values that the newspaper should represent? Every now and then, Famiglia Cristiana – the most popular catholic weekly magazine in Italy – receives (and publishes) letters that complain about advertisement with "scantily clad" models. It is not my intention here to evaluate the rights and wrongs, but the interesting fact here is that the editorial line might be challenged by readers because of advertisement – clash of values or simply because of excessive quantity, but the arrow means "detract". Nonetheless, I can also imagine some cases in which advertisement might contribute to the publisher's reputation.

Attention flows from publisher to writer

This is obvious as long as the writer is a paid journalis. But what happens when the reader opens a blog that is somehow related to the newspaper? This symbiotic relationship can be observed on repubblica.it, where posts from readers' blogs are highlighted on the home page, with a tremendous boost in their visibility (and popularity). This is clearly an attention exchange, working mostly in one direction (from publisher to writer). Yet, in a marginal way, the influential individual might attract a relatively small number of readers to the hosting platform.

Conclusions?

The one million dollar question is how might we transform these value exchanges to money-generating ones (and consequently add revenue generators), or how to replace monetary transactions with intangible ones (and consequently make the publishing business less money-intensive). My guess is that newspapers and media companies could possibly evolve into something that we might call (sticking to the financial metaphore) attention and reputation banks – or perhaps marketplaces for these intangible assets, trading one with another. And both for content – and money.