RIPTIDE: What Really Happened to the News Business

For most of the 20th century, any list of America’s wealthiest families would include quite a few publishers generally considered to be in the “news business”: the Hearsts, the Pulitzers, the Sulzbergers, the Grahams, the Chandlers, the Coxes, the Knights, the Ridders, the Luces, the Bancrofts—a tribute to the fabulous business model that once delivered the country its news. While many of those families remain wealthy today, their historic core businesses are in steep decline (or worse), and their position at the top of the wealth builders has long since been eclipsed by people with other names: Gates, Page and Brin and Schmidt, Zuckerberg, Bezos, Case, and Jobs—builders of digital platforms that, while not specifically targeted at the “news business,” have nonetheless severely disrupted it. Reasonable people can—and do—debate whether the replacement of legacy media by new forms of information gathering and distribution—including citizen journalism and smartphone photojournalism, crowdsourcing, universal access to data and, of course, a world awash in Twitter feeds—makes democracy more or less vulnerable. Usually the argument is reduced to a couple of symbolic questions: Who’s going to pay for the Baghdad bureau? Who’s going to replace the watchdog function at city hall traditionally provided by healthy metro newspapers? On the national level, the owners of the big legacy news businesses have fought fiercely against the disruptors, often with the effect of a frustrated ocean swimmer flailing against a fierce rip current. They have waged legal battles over “fair use”; they have lobbied against anti-competitive behavior; and in many cases they have yielded to the current, creating substantial digital advertising businesses with hundreds of millions in revenue dollars of their own. And at least three big news players—The New York Times, The Wall Street Journal, and The Financial Times—all have built emerging models that rely substantially more on consumers paying for their digital products than merely relying on digital advertising. Other legacy news businesses—CNN, Fox News, CBS’s 60 Minutes to name three—also continue to operate with highly profitable margins. But with each digital click upward in Moore’s Law (processing power) and Metcalfe’s Law (network power) the tide of technological disruption has only risen, washing many of the legacy swimmers further out to sea, or at least diminishing their financial prowess. The summer of 2013 saw two particularly