Saturday, February 14, 2009
Our Sub-Prime Journalism Crisis
The economic meltdown that is shattering the world's economy can be traced back to September 15, 2008. That's when Lehman Brothers was allowed to fail and buried in an avalanche of failed financial schemes that appeared to work for a while. But didn't.
In the end, the flow of collateralized debt obligations, hedge fund bankruptcies and worthless mortgages left behind a blighted landscape of twisted wreckage and shattered lives that will take years to recover.
Journalism, like the financial industry on which it depends, is also going through its own avalanche, of sorts.
Instead of a sub-prime mortgage crisis designed to create wealth by generating financial products to benefit (many, some, a few, no - pick one) consumers, journalism also has been creating a mass of products to benefit (many, some, a few, no - pick one) citizens.
The internet was and still is - a phenomenal technological development that, when used wisely, creates new communities of shared interests that heightens democratic thinking and empowers citizens. What the internet also does is to be a vehicle for disseminating more information resulting in less knowledge. It is more than an avalanche. It is a cyber-tsunami.
News organizations are producing more and more content for fewer and fewer people. A study on newspapers in France recently published by the French government observed that all media content increases at a rate of 30% a year. At the same time, the ability of media organizations to find a way to monetize their products continues to decline.
In Economics 101, this is called "deflation." In other words, too many goods and too little money.
In Journalism 101, this is called "stupid." We have created too many media products for too few people who and can't and won't pay for it anyway because of the recession and because the value of the journalism overall has now been downgraded by the volume available to us on the internet.
But through the thickening gloom, I think I detect a couple of rays of hope: first, HBO is doing well. According to tvpost.com, "HBO co-President Richard Plepler told TelevisionWeek’s Jon Lafayette that he’s confident in the premium cable network’s growth, citing the network’s performance in past recessions and the performance of HBO Entertainment President Sue Naegle." So far he's right.
Second, at Ground Zero of the recession, New York City, public radio's WNYC raised more money than they expected, in their winter according to the Times.
What does this indicate? That HBO and WNYC must be doing something right...something that people both want and need. In the end, the only things that will save media companies are quality programing and excellent journalism.
The recession may purge us of our nasty financial habits. Will it also do an equivalent job on media companies that produce more than the public wants?