Wednesday, September 12, 2012

So if journalists SAY they're so valuable...

I really enjoyed Robert Picard's essay on why journalists deserve low pay, and it got me thinking about the difficult spot journalists have gotten into rhetorically in defining their value to society. One of Picard's main points was that journalists seem to believe they have an inherent value to society that's worth ensuring they continue to survive in their current professional form. (Picard, obviously, argues that that's not the case, that journalists' value is based primarily on their usefulness to society, which is diminishing.)

So, the argument goes from journalists, the public has to act to ensure that professional journalism survives in something resembling its current form (preferably by paying for news), because it's so intrinsically value to society. Picard is skeptical of that value, but there is a group of scholars who believes very strongly in journalism as a public good, as journalists do - those, like Robert McChesney, who are arguing that the government should step in to preserve journalism for the sake of the public.

Journalists, of course, are totally anathema to that idea, but that's the logical endpoint of their argument about their own intrinsic value: If journalism provides a vital intrinsic value to society but can't be sustained by the market as currently constituted, then it needs to be sustained as a public good by nonmarket forces - i.e. the government (or charity, if that will scale, I suppose).

So journalists seem to resist both perspectives on their own value and the implications of those ideas - they seem to be saying, "We're absolutely fundamentally important to a functioning democracy, but we don't want you to set up any of the safeguards that you typically enact for those types of valuable services. Trust us to make it work within the market, but if it doesn't, it's all your fault and you should feel bad for letting us die." That's an uncharitable way of putting it, but it certainly does seem to be intellectually inconsistent way to approach one's own profession.

Tuesday, September 11, 2012

Fact or Truth are still valuable

It is so easy to get good electronic products now. Taking a picture, writing some words, then posting these works on a public information platform, such as blog or facebook, seems to become so-called "news".

However, is that really the case?

Engaged in media and public relations work in a telecommunications company for several years, I hold press conferences or dispatch news releases to all of the media. And the results are always different when we check the next day. There is a senior reporter who always gets the big scoop of the industry. Her news reports are mostly credible and prompt, and her writings are very organized and simplified. Companies in the telecommunications field and other media read her reports every day. The professional journalists are indispensable and valuable only if there is information that needs to be spread or to be verified.

Even with the emergence of internet or community website, any messages can be transmitted at anytime, by anyone, anywhere, but the "reliable and systematic information" still has high value. 

In the Information-explosion Era, finding the “fact” or “truth” becomes more and more difficult. If a reporter from a media company can provide reliable and instant news, this person should get a reasonable reward.

"So what?"

The moral of the story is -- journalists need to make their products useful to audiences "if they want to make money." After all, usefulness is highly correlated with value, and value is what makes [most] people pay.

In other words, while journalism may be important because it "contributes to the functioning of democracy and encourages civic engagement, etc.," the million dollar question is:  are these reasons enough to make people pay? Picard doesn't think so, and a closer look at average Americans' [un]willingness to pay for the news would suggest as much.

In my view, the more important, or practical question that journalists need to answer is the "so what?" from audiences: "so what if journalism facilitates democracy? What is in it for me? Why should "I" pay?"

Looking back in history, the U.S. has rarely been a nation with high political participation rate - many citizens don't cast votes during elections, and even among those who do vote many are neither politically informed nor civically engaged. In other words, while most people would agree that democracy is good and important (an argument journalists and journalism scholars alike often make in justifying the importance and value of journalism), many actually don't do much, if at all, to uphold this normative belief, let alone be willing to pay for it... 

There comes a time when idealism [must] collide with reality for survival -- in journalism such collision is not new or surprising, but when will journalists stop hiding behind the motto "the public should read and pay for our paper because it's good for democracy" and start looking for answers to "so what?" Soon, we hope.

Innovation Dead in Journalism?

It's true. When you think about really cool things that are happening in the journalism world, your brain is not rushed with hundreds of ideas that make you say "wow, now that is something." Instead, to me personally, the word journalism is getting to be on par with 'bland.' I received my bachelor's degree in journalism, and had that same thought way back then.

The NYT article 'Innovation in Journalism Goes Begging for Support', shows a website called Homicide Watch DC, which tracked every murder in Washington. Meant to fill in the missing murder content which local papers like the Washington Post miss. It got all kinds of press, going from 500 page views per month to 300,000 views. Although its viewership increased, the site gained no kind of financial backers, and had to reach out to Kickstarter for donations.

So why the lack of innovation in journalsim? In this digital age, it seems imperative for journalist especially to be open to constantly evolving and changing. A group of foundations wrote an open letter to journalism schools. Kind of interested in how you feel about this letter since most of you are in the journalism program. View letter here.

Innovation in Journalism Goes Begging for Support

The answer is content? If so, what content?

When I had worked for a local broadcasting company as a news reporter from 1995 to 2009, not only my colleagues in charge of management but also reporters were often asked to have entrepreneurial spirit by a CEO. At that time, most of the reporters including me harbored ill feeling against the demand, thinking that journalists should only concentrate on ‘the holy work,’ not on business-oriented work. This might show that journalists were reluctant to be involved in setting the course of their companies.  

I think that Picard’s argument is sarcastic, but hit the mark. The time has come for journalists to “find ways to alter journalism’s practice and skills to create new economic value.” To do so, what kind of labor do journalists sell in the market for revenue? Do they have to go out to the street to distribute and sell the news? Should journalists be nervous about new technologies? I totally agree on Picard’s opinion, “it is not just a matter of embracing uses of new technologies.” Technology is just a tool that provides journalists with a better way to do their journalistic practices. The answer is content!
If so, however, what is the information that customers (readers, listeners, and viewers) cannot receive elsewhere? How can it be attained to produce unique news content? What is the value of journalists’ labor above the level such as accessing sources, determining significance and effective presentation? What are the unique skills, abilities, and knowledge of journalists that deserve high pay?

It must be one of the effective tactics for attracting customers to provide differentiated product (information and news) through coverage of specialized news areas. However, coverage of specialized areas seem to have been already overflowed, and hence outdated. To my mind, thus, more valuable is in-depth and substantial exploration of certain issues and implications of events and trends, which provides new perspectives on news with something novel and hence can be uniqueness. I’d like to ponder a proverb, “there is much less water to drink when flooding.”
Below are two Time stories about the gloomy future of journalism and how to save it.
The Future of Journalism: Good for You, Scary for Us   
What Price Journalism? What Would You Pay?


Read this the other day, and I tend to enjoy Shirky's thinking about the future of news. Not because he's optimistic, certainly, but because he's sensible rather than emotional about it. In this CJR piece, he visualizes the news media business model as a triangle of producers (the news businesses themselves), audiences and advertisers. Each wants a connection to the other two, and all three legs of the triangle need to stand up in order for the model to work at all. And now that at least two of the legs are weakened, if not failing altogether, he suggests that there are only three paths forward: disappear entirely because the model is broken; shrink significantly to survive on the limited revenues; or restructure using a different business model. I think we all hope for the restructuring option.

But it doesn't appear that many people have good ideas about what a new business model for news should look like. I'm hoping something to discuss in class will help me to think of some suggestions.

Monday, September 10, 2012


I liked Page 8. On Page 8, the authors point out that "Public broadcasting is desirable, so therefore we should fund it," is not good argument for funding public broadcasting. In fact, it's not even a valid argument for funding public broadcasting, at least from an economic standpoint.

If every decision is made based on costs, we have to consider all the costs of funding public broadcasting, including opportunity costs. That is, what is not funded by funding public broadcasting. The argument shouldn't be that public broadcasting is good, but that it is more cost effective than any substitute recipient of funding. In other words, we'd have to show what good is produced by it, or what value it creates, then weigh that against the cost of funding it and the opportunity costs of other public endeavors that would not get funding.

This is why arguments about the future of news go nowhere. They always have some element like this: "News is good, so we should have it!" In fact, we are not making a valid argument until we can say something like, "News produces a measurable impact on participation in public life, which has been shown to be an important determinant of the success of a Western democracy." Then we could probably all agree that a stable government is worth having and we can have some sense of the value that news provides. Then we have to asses the costs associated with it, including government information subsidies like PR offices, waste produced by countless newspapers, postal subsidies, and whatever else. Only then could we begin to have a productive discussion of whether news is actually valuable.

Or at least that's what economics says.

Newspapers' shift from elasticity to inelasticity

I'm still trying to completely comprehend the concept of elasticity, but as soon as I read the chapter in Hoskins et al., I immediately thought of this article from last week by French media analyst Frederic Filloux arguing that newspapers should raise the prices of their print products.

Filloux refers to the concept of elasticity and says that the elasticity is gone from newspaper prices. When I first read this article last week, I kind of skipped over that part because I didn't understand it, but after having read this chapter, his argument makes a lot more sense: He's saying that print newspapers are no longer a good with elasticity of demand because while price increases used to make circulation drop, they now seem to be making it increase - so he says newspapers should raise their print prices. Pretty simple, right?

What his post still seems to be missing is the explanation of why the elasticity is gone from print newspapers, so I tried to use the concepts from this chapter and fill in the blanks. Here's what I came up with: Print newspapers have lost their price elasticity because for those consumers who still demand them, they have no close substitute anymore. Why would that be, when news is so plentiful and free online? Because those who demand print newspapers no longer demand them because of their news, but because they are in print - and there is no close substitute for the "printy-ness" of newspapers. Those who demanded newspapers for their news fell away years ago, once they found that they could get a close substitute for their news online, for free (or much cheaper). Those who are left as newspaper subscribers, then, are not subscribing for news, but because they like the convenience, routine, or familiarity that print gives them.

According to the Hoskins chapter, when there are no close substitutes, price elasticity of demand drops. And according to Filloux, that's happened with print newspapers. It's a counter-intuitive argument, but one that makes a lot of sense once you understand the economic principles behind it.

Sunday, September 9, 2012

Time to reconsider the value of products that journalists produce

One of obstacles for principle of economics applying to the news media industry will be a unique characteristic of products that journalists produce. That is a public good. In economic principle, as an individual consumes the product, the availability of the product should be reduced. 
However, news contents are not affected by the consumption of others. The price of news contents is inelastic to the demand. At the same time, so many substitutes exist, negatively affecting price elasticity. If news media industry only relies on the competitive market principle, the diversity of voices, which is a backbone for the democratic society, will disappear.Therefore, in the news media sector, the government couldn’t help to intervene with the news industry through regulations. Maybe, the reason that the study of media economics is not dominant in journalism and communication studies contributes to this unique characteristic of new media. 
However, journalists as well as media managers cannot entirely blame the characteristic of a public good as a culprit of the collapse of news media and expect some subsidies from the government. The reason why they cannot blame the characteristic of news media is that journalists neglect the importance of how their news articles benefit the public in a practical sense. They may have been sitting in a cozy spot for a long time with an arrogant way of thought that ‘We (journalists) lead, and you (the public) follow’.

She's got questions...

I must preface my post by confessing that the last and only time I took economics was in 12th grade, and so my apology in advance if my questions make me sound like simpleton (though maybe I am!).

1. The textbook defines economics, as "the science that studies how the economy allocates scarce resources, with alternative uses, between unlimited competing wants" (p.3). To me the key components in this definition seem to include (1) scarcity in supply and (2) insatiable demand. However, if we are trying to understand the economics of the news industry in today's media environment, it seems reasonable to assume that the current dynamic includes (1) too much supply [in terms of news information] and (2) too little demand [for news in the face of entertainment in this high choice environment (Prior, 2007). I wonder, then, if this helps explain, in addition to other factors such as their mistrust in Christensen's disruptive technology thesis, etc., the news industry's inability to figure out a viable economic model for their operations?  In other words, can economics apply to the state of the news industry today given it entails phenomena that seemingly contradict the basic assumptions of economics?

2. Does the law of demand only apply to things with ceiling effects of some sort (e.g., that the supply would eventually run out)? I understand that supply and demand are closely linked with strong negative correlation, and the definition of economics seems to suggest as much (e.g., scarce supply), but then what happens if there is unlimited supply of something -- what would the slope of the curve look like if we extend the X-axis on the hypothetical graph of supply and demand that we are drawing, since it is unlikely that at limitless supply demand will cease to exist?

3. In terms of substitution effect (p.18) -- I wonder if substitutes only apply to "comparable goods?" And if so, what would be the definition of "comparable?" For example, if I wanted to buy a car and I am thinking about getting a Honda, Toyota or Hyundai would be "substitutes" in a classical sense because they are different brands of comparable nature (e.g., same price range, etc.), but I may even consider getting a sports bike (e.g., Aprilia RS125) and it would in theory still count as a "substitute" because it serves similar purpose (e.g., transportation) despite vast differences in terms of price, safety concerns, etc. 

Nonetheless, what happens when we move from more concrete things such as cars and motorcycles to things that are more discursive in nature, such as media content? Particularly -- does entertainment count as "substitutes" for news? (This goes back to Markus Prior's point that in high choice environment "people forgo news in favor of entertainment") And if so, doesn't this in a way suggest that "time" is actually the IV rather than content ? (e.g., entertainment counts as substitute for news because it is simply a "choice of genre" given time availability, and thus the issue here is more so time displacement than anything else). I buy the argument that digital media are "inferior good" compared to their traditional counterparts, but what about "media content" if we leave the medium alone for a while and focus on different genres instead? How "good" is content?

They really didn’t know the price inelasticity of the demand for TV advertising?

According to HMF, the concept of price elasticity of demand – especially, “the demand for television advertising is price inelastic” - can be relevant to public policy. I totally agree on that. I believe that media policy makers have to keep in mind the basic economic theorem.

At the end of 2010, South Korean conservative government granted four major conservative newspapers the licenses to operate new cable TV channels, which are comprehensive programming channels almost like terrestrial networks. The government’s decision was made after years of severe nationwide debate, division and cross-industry bickering. Although it was very questionable whether the market could milk additional TV advertising spots from advertisers, the government claimed that the new channels would generate enough advertising revenue. However, even though the new channels have greatly lowered their price for advertising spots, they are “drowning in red ink.” The government really did not know that television advertising is price inelastic? Or, just because of the political thinking, they were blind to media economics?