The Future of the News Business

Nov. 3, 2009

Transcript:

Ted Simons: Good evening, and welcome to "Horizon." I'm Ted Simons. The "The East Valley Tribune" has announced it's going out of business at the end of the year. It's another victim of an economic recession that's been especially brutal to journalism. The industry has been trying to reinvent itself in the wake of a technological revolution that's changed the way news is delivered, consumed, and paid for. Joining me to talk about the future of journalism -- Patti Epler, senior political editor for "The Arizona Guardian," an online news site she helped start after being laid off from the "The East Valley Tribune" earlier this year. Ed Munson, vice president and general manager of KPHO TV-5, the CBS affiliate in Phoenix. KPHO is owned by the Meredith Corporation out of Des Moines, Iowa. Also joining us -- Steve Doig, a journalism professor at ASU's Cronkite School of Journalism and Mass Communication. Thank you all for joining us on a special program of "Horizon." Patti, I want to start with you. "The East Valley Tribune" well, closing at the end of the year. Not really a surprise, still a shock, though, isn't it?

Patti Epler: Yes, very much so. I think we thought that the bankruptcy reorganization would put them on a firmer financial footing and it was a shock and it was sad to hear that the paper is going to now close.

Ted Simons: When you were with the paper and you were there as of earlier this year, these things, the threat of something like this happening, hanging heavy in the air?

Patti Epler: Oh, definitely. Everybody's been worried about it for a couple of years, with the layoffs in January and further cutbacks and salary freezes and furloughs and, you know, the bankruptcy, I think it's been looming.

Ted Simons: The paper wins a Pulitzer prize and months later shuts its doors. Surprised by that?

Steve Doig: No, I've seen it happen. "Rocky Mountain News" in Denver, a great paper. The other Seattle paper -- I forget which one. Not the times. But the post intelligencer, another award-winning paper.
Ted Simons: The impact of a major paper like this shutting down.

Steve Doig: Aside from the impact on the people involved in putting out the paper. The -- the lack of reporters' eyes on the function of government. To me, one of the most important things we do is to be the so-called watchdog. Start barking when we see incompetence or crooks or things like that. And the fewer reporters out there covering the less -- less chance of that happening.

Ted Simons: Did technology kill the TRIB? Was it the economy? A little bit of both? What happened in this instance, from where you sit. Obviously, the broadcasting perspective is a little bit different but not that far apart.

Ed Munson: Probably all of above. They were dealing with what the economic realities are here in the valley. We've been particularly hard hit in the advertising side here in the valley. The growth of the valley, growing because it was growing, really came to a very abrupt stop with the housing situation. And when that happened, the advertisers quickly pulled back. When that happens, obviously a new economic model has to happen rather rapidly and some papers can make that transition quickly particularly if they have the corporate structure that allows them that flexibility. And others are living on the edge, particularly if they're highly leveraged and that's what happened in this case.

Ted Simons: If the economy had not taken the dive that it did, do you think something like that would have still happened or is that train just rolling and it's hard to stop?

Ed Munson: The ultimate demise of the paper probably should have happened. But they were in the early stages to an economic model that would have worked on the internet and other forms of distribution. But they got hit with the train wreck of the economy before they could make the transition quick enough.

Ted Simons: What about the changes the Tribune did make? They wound up going free, concentrating on four cities in the valley. Wound up being -- what? -- three days a week? Something along these lines.

Patti Epler: It was a gamble. I think the reality of the Tribune was they were geographically spread so thin with not enough staff to try and cover from Scottsdale through Queen Creek, Northern Pinal county, Chandler, Mesa, Tempe, with the size of staff they had was just, you know, too much, I think, and, of course, they closed the Scottsdale edition and cut out Tempe when they went to the three day a week, four day a week thing. But, boy, it was difficult to do the meaningful informed type journalism that I think Steve was mentioning earlier that is important.

Steve Doig: I would agree, and add that there are newspapers doing well financially. They tend to be small town papers. They can be free delivery. Most people don't realize what subscribers pay only covers a small fraction of the cost of the paper showing up on the doorstep. Even small town papers are probably going to be better off than the mid sized metros like this.

Patti Epler: The other thing that Steve noted in the beginning, the papers that have closed have been in markets where there's two papers and I think it was hard for the Tribune to stand up against the Republic.

Ted Simons: There was a concentration for being hyper-local for the Tribune, and I know some other newspapers are emphasizing that as the way to go. Does that transcend over into broadcasting as well? Is the idea of being so focused toward a target to try and keep that audience, or is it all things to all people, how does the broadcasting spectrum look at this?

Ed Munson: That's an interesting question. I would argue with a lot of people that local television broadcasting may very well be the last mass medium standing when it's all over with. We're still able to reach 99% of the population in a given week because of the ubiquity of the signal and the coverage. Whether or not there's going to be five television stations in the valley five years from now doing a full complement of newscasts is another story.

Ted Simons: Let's stick with a that - that's an awful lot of coverage going on in a complicated market. How long can that last?

Ed Munson: As long as the economic model is there. It's similar to what the newspaper went through. If the economy does return and each station carves its own niche in the way this covers the valley, I think that's -- it's very viable. But if all of the stations are covering the same stories it's going to be the station that has the best lead-in programming to their newscast that will flourish.

Ted Simons: The concept of competition, in a television market is still there. In the newspaper market, it's going to take a big hit at the end of the year. How important is that?

Steve Doig: Competition is important to producing the journalism. We work harder when we know somebody else might get it. Happily, TV can be good competition for us. Newspapers are producing things that TV sometimes follows. There's synergy that way.

Ted Simons: Indeed, but as far as the community is concerned, a one-paper town, even though it was one and a half paper town for a while. A one paper town. But what does that mean as far as coverage and competition and beating the competition?

Patti Epler: You're not going to get as thorough coverage as you would have before the papers -- the remaining paper, the Republic has the luxury to cut back and settle in and say we're not going do this or that, because we don't have to worry about it anymore.

Steve Doig: There are hardly any cities in America that have two newspapers. All evening papers have gone and only a handful are left.

Ed Munson: I think Steve could probably go to this point, that when you reduce a paper down to one, the quality of that paper does tend to get lowered simply because of the fact they don't wake up every morning, looking and seeing what the competition is doing. It's a sad day for broadcasters too. It's another voice that's been quieted in the valley. The more voices you have, the more competition, the more we can hold people accountable, those in power.

Ted Simons: Did the main stream media see this coming? I mean, we're all still surprised and a little bit surprised, I guess, but a year, two years, three years ago, anyone see this coming?

Steve Doig: Sure, to years ago when I was at the Miami herald, Knight Ridder was experimenting with Viewtron, something they put $50 million into. It failed because the technology went past them. People have been flailing around trying to do it but there's been way too much time spent on trying to protect a business model that actually isn't going to last much longer.

Ted Simons: Do you think mainstream media saw this coming?

Patti Epler: Oh, sure. In 2001, when I was after the new times, they had their first round of cut there that were significant and since then, the newspaper industry has been cutting back substantially year after year. So --

Ted Simons: How about the broadcast industry?

Ed Munson: I think this was inevitable. We had a pretty good idea it would happen. Again, less choice for the advertiser. Forget about the reader. The advertiser is down to one newspaper to choose from and you would think that -- and as a business person in broadcast would be happy about less competition. I don't think that's the case.

Ted Simons: Are you seeing, as far as advertising is concerned, a change in the nature of advertising? A change in the way consumers look at advertising? There's much talk about the internet and it's you deciding as opposed to the broadcaster and the newspaper deciding. With that in mind, is advertising changing in a way we're not all that even aware of even now?

Ed Munson: I think it is. You have to understand how consumers make decisions. It's like a funnel. They find out about products and services and explore products and services and they discover where to buy products and services. At the top of that funnel, television and newspaper have done a good job but newspaper has always occupied the middle where they investigate and get information and compare prices and so on. That's largely being replaced by the internet. That's where people are going to do their homework before they buy a flat screen TV or that sort of thing. So that middle portion has really hurt the newspapers the most.

Ted Simons: I was going to say, it seems if I want information, if I want to go and buy a camera, I don't necessarily go it a newspaper. I go to a whole bunch of sites where camera geeks are talking about the latest lenses and hard ware. With that in mind, again, the nature of advertise-supported journalism, is it gone?

Patti Epler: Boy, who knows? But I think one thing that the newspapers noticed right away was the car ads. You know, people used to go to the newspapers on Saturdays for -- to shop for cars. Well, you know, but that was the only thing we were really looking at. So a lot of people now go to Cars.com and the whole nature of that giant sector for newspapers changed.

Steve Doig: And the other killer was Craigslist. Which is we used to have a thing called classified ads in newspapers that paid for a huge thing. Completely gone. Craigslist is known as an unfair competitor. It charges nothing. We can't beat that.

Ed Munson: The classifieds were the highest margin business for the newspaper-- it doesn't cost much to produce and publish them.

Ted Simons: The next question, the next step: Can journalism make that next step without the support of advertisement? What do you do? Go nonprofit? What happens here?

Steve Doig: We're in the experimental stage of that. And there are a variety of interesting experiments. "The Arizona Guardian" is one of those experiments. There's the investigative thing, on a national basis, funded by a wealthy person that's given them $3 million a year do it. And it's going to take a lot more than that to produce the level of journalism we want. But we're going to see --

Ted Simons: Talked about nonprofit, but subscription like the Guardian, is that an option?

Patti Epler: We've seen our subscribers grow since we started it 10 months ago, as we became better known in the political world and actually statewide now. We've picked up quite a few people. Steve actually talked me out of the nonprofit model way back last year because you just have to raise money. You have to look for money and it distracts from the journalism you're trying to do. And a small shop like ours, if we were out trying to find dialing for dollars, so to speak, we wouldn't be writing as many stories as we do. We're happy with the subscription model we have.

Ted Simons: Channel 5, again, supported by advertising dollars. What happens when those advertising dollars shrink or simply aren't there? Is there a plan B? A look ahead?

Ed Munson: Sure, we're exploring. We an internet site as many television stations do that includes and breaks the news before we break it on the 10:00 news. As the newspapers do. But part of that model is the broadcast spectrum and the ability to broadcast to cellphones and other devices and there's a whole host of technologies that people can walk around and watch part of a newscast and there's geo-targeted marketing and so on that can be done through mobile devices.

Ted Simons: Is that something that's sustainable?

Ed Munson: It will, but it's going to grow slowly. The trick is how far quickly your traditional 30-second commercial in prime time drops and how quickly you can grow the new digital revenues and we're modeling that constantly at Channel 5 how we can replace the typical analog revenues.

Ted Simons: Interactive devices and interactive content. I've heard people say that if you want to get more readers to a newspaper's website, allow them to write. They don't want to read. They want to write. They want to be bloggers. Everybody wants their opinion out there. Is that viable?

Steve Doig: It's being done, if -- unfortunately, if you read the comments that show up on lots of stories, I would be embarrassed to be an organization that allowed that kind of thing to be published. The darkest things that go on in people's minds winds up in print. I think a failure is a lack of editing or lack of filtering. But as a way to bring people into the tent, yeah, it's useful.

Ed Munson: We are a little bit concerned with the fact that blogging is some sort of a substitute for journalism and I have a feeling my fellow panelists would agree with that simply because where does the line begin and I think most discriminating consumers will understand the difference between a blogger and a live television newscaster or newspaper. And -- but, there's a certain level of people that probably don't understand the difference and do blur those lines. You can get information from blogging that's important. But relying on that solely is not a viable alternative in my mind.

Patti Epler: I absolutely agree with that. I think one the things that's made our site popular is we're an independent arms-length trained staff of journalists that don't let opinion, political views get in the way of the stories and people appreciate that about our site.

Ted Simons: Do people appreciate -- some people do. Do most people appreciate that? I've asked this from journalism professors and experts in journalism. We all have an idea of what journalism should be and the responsibility therein. Does most of the public want that, or do they want a blog which says exactly what they think and will not challenge them and basically make them feel good and they can just raise their hand and go, "Yeah."

Patti Epler: I think there's a segment of the population that does like to be comforted by being amongst their own kind even when they're on the internet, but I think our site definitely attracts people who are a little bit more sophisticated and know the difference between a political blogger and a news story.

Ted Simons: Do people appreciate the job that journalists do?

Steve Doig: I think they do. You know, you're absolutely right there are some very loud voices on either side of the political spectrum. It's really a ratings ploy and it draws in the people who care about hearing extreme views on either side. But in middle there's a large mass of viewers and readers not only seeking those opinions and going to their newspaper or TV station to get news that isn't colored with that.

Ted Simons: How do you balance on television -- and this is may be a little bit part here. But it's interesting -- especially investigative journalism, I know your news department did the job with the sheriff Joe Arpaio. An eight-minute package. And the kind of investigative work you don't usually see on nightly news. Most viewers are interested in Sheriff Joe Arpaio. But how do you balance that with people who watch the news to watch their favorite faces and sit back. Don't maybe want to the see investigative stuff that doesn't necessarily involve them?

Ed Munson: It really has do with the fact there are five TV stations in the valley doing local news. If it's a personality-driven newscast they may not want to come to channel five to watch. We have terrific anchors and accomplished journalists at our television station but if they're not the favorite anchor -- our research shows more and more the results of people coming for the content of the newscast delivered by competent people, certainly, but they're coming for the content. And you begin to see, I think, at TV stations across America, the approach that they go after newscast is going to be become more and more different because of the fact that that's the differentiating factor. If everybody is going to cover the same wreck on I-10 and the same shooting in a bad neighborhood, then it becomes a wash. But if you can train your journalists to come to the morning meeting every morning with an idea for a story that isn't just listening it a scanner and what the police are chasing, I think you can find a different thing for a newscast that people will come to and say I want something relevant to my life other than news coming over the local station.

Steve Doig: That's what newspapers need to do as well. Right now, newspapers spend too much time covering the same things that everybody else is covering. By rote. I think newspapers have to give up the belief we're the first to tell people what's happening. People don't turn to the newspaper to be the first to learn something. They turn to TV or the radio or internet. We need to explain why things are happening and put our time into that.

Ted Simons: People turn to the Guardian for political news. They used to turn -- and some still do -- to the Republic and as for a short time, the Tribune. Are we going to see, if I want politics I go there. If I want sports, I go here. If I want weather I go there. If I want local news -- am I going to have on my favorites list, five or six different websites instead of the all-encompassing journalistic enterprise we all grew up with?

Steve Doig: I think so. That could be the business model of the future. A whole bunch the specialists. You know, you have a reporter who decided to make Tempe City Hall his thing and depending on how many subscribers he can get, and micro payments, he could wind up having a decent living and you could have somebody packaging all of that being done. You can hear the sports columnists you want and see the videos that you want and so on all by sort of selecting off the equivalent of a Chinese menu.

Ted Simons: Question. The content, so much of news content right now is free. For better or worse. And actually for worse for newspapers. Let's face it. It's what is helping to kill newspapers. "The New York Times" tries to put some of their columnists for subscription, it just doesn't work. The "Wall Street Journal" says you got to pay--it works. Should newspapers have stuck to their guns and made for subscriptions the whole way through?

Ed Munson: That horse left the barn before the newspapers had a chance to make that decision. When a business model is that we're going to give you a lot of stuff for free, it's hard to say, we're kidding. Now we want to charge for it. It's a matter is your information compelling and relevant and can you sell advertising that surrounds it is the business model that's going to be enduring.

Steve Doig: The music industry and Hollywood are discovering how hard it is to protect your content. People will copy and paste and send it to their friends. You can't hold on to your content behind the pay wall.

Ted Simons: As far as newspapers are concerned and harkening back to the last question, do newspapers try to be too much? Is there too much coverage? The Guardian is focused. Television is by its nature focused. It's only got so much time to tell its stories. Do newspapers lose when they try to cover too much?

Steve Doig: I would argue, we put everything in from hard investigative reporting to soft features to the jumble to -- you know, we're basically trying to have all of these little bits and piece that is somebody might want to buy the thing for. I suspect we have to get to the point where we're going to say, ok. We're going to specialize in investigative or coverage of local government.

Patti Epler: You know, I don't think newspaper try to do too much. I think it's good to have that, you know, broad variety of articles for various people. But I do think they need to do it better than how they've been doing it and not just, you know -- we have -- we call them thumb suckers in our business. You know, stories that have no meaning whatsoever and I would argue that thumb suckers are the short quick hit pieces that everybody else in town has the same story.

Ed Munson: We call them kickers in the TV industry.

Ted Simons: We've got less than a minute here. The concept of creative destruction from amid the rubble something grows. Is that what we're seeing or an absolute paradigm shift and the future is foggy?

Ed Munson: A little bit of both. I think as businesses, they're recognizing the fact that their current business model is not going to work. These are smart people who own multimillion dollar corporations, they'll figure out the new model.

Ted Simons: Going to figure it out?

Patti Epler: I think the foot soldiers are rising up and starting online newspapers all over the country.

Steve Doig: Somebody is going to figure out a way to sell news. Because that's still a commodity people want.

Ted Simons: Thank you for joining us on "Horizon."

In this segment:

Ed Munson, Jr.:VP and General Manager, KPHO TV-5 (CBS) in Phoenix;Patti Epler:Senior Political Editor, Arizona Guardian, an online news service; Steve Doig:Journalism Professor, Arizona State University;