The funding journalism conundrum

6 September 2010

Written by: Lawrie Zion

The need for an effectively functioning fourth estate in a democratic society is beyond question, but one of the most troubling questions regarding the future of journalism remains unresolved: How can quality coverage of important issues be properly funded?

It was this conundrum that was the focus of ‘Kleptomaniacs and Walled Gardens’ at the New News 2010 Conference on Friday morning.

The title of the session was inspired by News Corporation chairman Rupert Murdoch’s labelling of search engines as ‘kleptomaniacs’ last October, so it was disappointing that Annie Baxter of Google Australia was unable to attend.

On the panel at the State Library of Victoria’s Wheeler Centre, however, were ninemsn head Andrew Hunter and financial journalist and founder of Business Spectator Alan Kohler, discussing their online publications with Dr Julianne Schultz, founding editor of Griffith REVIEW.

Hunter doesn’t see ninemsn shifting far from its current ‘traditional’ ad-supported business model. Revenue also comes in from syndicating its content, selling it to third parties such as Qantas and iinet. Yet much of this content is itself syndicated through other Publishing & Broadcasting Limited (PBL) operations, notably ACP magazines and Channel Nine, and from the Australian Associated Press.

‘Out of our content mix, about 10-15% is created by our writers and producers,’ Hunter said. ‘And of that 10-15%, maybe 10% is actually new content.’ This point could be illustrated by ‘I bled hard over Swift debacle: Kanye’ by Nekesa Mumbi Moody of the Associated Press and ‘Kanye “bled hard” over Taylor Swift VMA incident’ by ninemsn staff.

Therein lies the problem. Just a tiny fraction of the material published by a successful and well-backed multimedia giant such as ninemsn is actually fresh.

It is an issue of which Kohler is well aware. For much of the year leading up to the 2007 launch of Business Spectator, it was planned as a paid site.

‘My view was that news is a commodity – widely available – but people would pay for good commentary,’ he said.

But three months before the launch, it was decided that it would be free. The issue was how to put up effective walls around the garden. ‘If you charge for it, how do you make it exclusive?’ Kohler had wondered.

How did we get to this point? It seems simplistic to just say ‘They gave away the news’ when the internet first began. Then, as now, those who buy newspapers may be paying for the content within but they certainly aren’t funding it.

‘The cover price was held down by advertising,’ said Kohler. ‘The advertising price has collapsed.’

The two men whose sites rely on advertising identified the reasons why.

‘Advertising now is accountable,’ said Kohler. ‘The advertisers can see how many people looked at an ad and how many actually clicked through … Journalism was paid for by the wastage in advertising but now there’s no wastage.’

‘The amount of ad space has grown exponentially. Anyone can now buy a cheap ad,’ said Hunter. He also added that internet ads are ‘not particularly attractive… it’s all boxed and restricted’ in terms of space.

And while they don’t expect this trend to reverse, there are ways to ensure a profitable online operation, despite lower revenue.

Hunter identified an opportunity to get a better price from advertisers by pointing out that the desired audience can in fact be targeted according to the material. It is indeed something that ninemsn, Business Spectator and the Eureka Report, another of Kohler’s online publications, have demonstrated. The Kanye West articles contained a Chanel ad, while a Michelin ad could be seen on another ninemsn page containing an AFL story. Needless to say, Kohler’s two front pages contained ads for the products aimed at business executives.

The news, too, has to become more streamlined. And a major area of savings for organisations may not surprise but it is certainly alarming: Journalists’ wages.

Kohler, who said with a laugh that Business Spectator’s four commentators are ‘extremely well-paid’, suggested the going rate for writers is wrongly based upon ‘journalism’s golden age’.

‘Now it is not a profession you need to qualify for, anyone can be a journalist.’

While this point must be conceded, it should be added that not anyone can be a good journalist, but it would be silly to dismiss what has become known as citizen journalism.

‘There has been an explosion of people who are saying things and what they say is not that different from what journalists do,’ he added. It’s a point that may seem somewhat blunt to those who do it for a living, but when prompted that journalists must take the responsibility for distinguishing themselves, in a nod to the resource-starved environment he said: ‘Yes, but it’s not that easy.’

It was Hunter who added that it is specialised knowledge that could allow an emerging journalist to do this. Kohler later contended that journalism students ‘are getting a degree they don’t really need but it helps; it means they are passionate about journalism and they can write.’ At this, the students in the audience either started planning auxiliary studies or breathed a sigh of relief that they had already done so.

Attention then turned to other potential revenue streams, most notably The Times in the UK and the introduction of its paywall in July.

Pointing to statistics that suggested that The Times lost 90% of its traffic due to the move, Kohler suggested that the experiment was doomed to failure. He blamed Murdoch’s lack of understanding of the internet – ‘I dare say he hasn’t read a blog in his life’ – and the increased online competition, most notably from public-service organisations. ‘Why shouldn’t the ABC & BBC have websites?’ he asked rhetorically.

The discussion moved from the walled gardens to the kleptomaniacs and the trend to find news on a subject via a search engine. Although users don’t enter a site to build a relationship with the brand, a good article beyond the bare facts remains essential as social media grows to a size that Hunter says ‘is almost an alternative version of the web itself.’

‘If you are having content recommended by a friend on Facebook then that’s more valuable than a search engine,’ he said.

‘The stuff that gets shared is the stuff of substance,’ Kohler added. ‘The higher quality of the article is what matters rather than the flashy.’

As a result, plugins which allow pages to be shared on social media have become a staple on news sites

‘These plugins are making Facebook a competitor to Google.’

At the end of an informative hour, the feeling with which one left was that there indeed is a future for quality journalism. However, it seems that we are still no closer to discovering exactly what that future will entail.

The battle between the kleptomaniacs and those building the walls continues.

Evan Harding is a Master of Global Communications student at La Trobe University and sport editor of upstart.

Other New News 2010 reviews on upstart: ‘Journos and pollies: lessons learned from Election 2010‘ and ‘Big Ideas: Changing the world