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Is There A Future For The Journalist And News Media?

Will journalism ever become a profession that commands respect? Will our children think of a career as a journalist financially as well as emotionally rewarding? Will news media become a business of consequence?

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There is a certain amount of pussy footing about the role of news media in today’s milieu. It has become the battleground of the untrained. The breed of people known as journalists, whose primary skill set was digging out truth from power, reporting on issues that were above and beyond partisanship and interpreting events and news that shape our world, is a fast disappearing species. The downside of untrained folks representing a profession is very evident in any profession be it medicine or law or any business and society, but for some reason, when it comes to information gathering, interpretation and perspective, everyone thinks they’re now better at it than the erstwhile journo. This rot has deeper repercussions in the social and political structure of our world and many of the effects of this are in play already. A continuation of this trend will perhaps create anarchy, if it already hasn’t. 

Journalists have been replaced by loud voices who opine on any event or news item, powered by the algorithms of search and social media giants, besides the ability to broadcast without censure.

I thought it would be a good idea to explore the issues that plague journalism as it stands today and envision a possible future using my rather detached yet relatively informed vantage. I am not a journalist, though I have managed quite a few news media outlets in print, television and digital over the past 25 years. Some of these homegrown, the others in collaboration with foreign media companies, mostly American.I have co-founded a digital entertainment venture about 5 years back and therefore I am not an interested party strictly speaking. I also happen to write on issues close to my heart rather infrequently, but that does not make me a journalist. Journalists and journalism have always been companions in my journey over these decades, but never did I anticipate the condition of the professional journalist to reach such a state of antipathy. Even as recently as a decade back, journalists and editors were ‘respected’ albeit somewhat less than in the 20th century. I doubt if any journalist today has seriously considered suggesting journalism as a profession to his or her children. 

How did we end up here? It's an all too familiar story. There are in my view six factors that have contributed to the current state; 1. Economic model for news 2. Hubris of promoters of media organisations 3. Policy myopia 4. Inability of journalists to adapt to technology & lack of formal training 5. Technology 6. Capital

The first factor; the ‘economic model for news’ is best agreed to be discussed as a mix up of cause and effect. Did the economic model for news cause the decline in news media or did the decline in news media cause the economic model to erode? My view is that both factors have an interplay if you include time as an important leveler. Add technology to the mix and you will get a heady cocktail. Allow me to elaborate; back in the 90s when Newspapers commanded a lion's share of the media landscape, both in terms of revenue and audiences, a couple of promoters decided to reinforce their position by offering the newspaper virtually free to the reader and instead depend on advertising alone. This beats the basic laws of economics, that if you’ve got demand, your ability to monetise and increase your profits from your customer (who in this case is the reader who is in turn is the focal point of the journalist and editor when creating the product) should improve, not deteriorate. Exactly the opposite happened in the decade of the 90s and carried on right up to 2010s. Managements and promoters of marquee, market leading newspapers decided that it was better to annihilate the competition than charge the reader the fair value of the product. This created a total dependence on advertising revenues as the sole revenue stream for publishers. The long term effects of this meant that these very same media outlets ended up losing power to advertisers instead of consumers or readers and there emerged a severe asymmetry in the internal organisations of most publishers and even television news outlets.

The actual paying ‘consumer’ of the news product was the advertiser whereas the organisation that was built to service the reader with journalists and editors at the helm increasingly looked like they were not aligned to this reality. This resulted in constant friction in the organizations sometimes healthy and at most times leading to managements having the upper hand in favour of the sales organizations that managed revenues from advertisers. Editors and journalists started playing second fiddle in this inverted structure. Circulation or subscription revenues dwindled to less than 15-20% of the overall pie. This created a negative feedback spiral of ‘choice or voice of the reader’ not being the same as the ‘choice or voice of the advertisers’. A totally unnecessary situation which could have been corrected or balanced by not giving out newspapers or television news channels out for free. This situation got exaggerated by the dominance of google, facebook and other social media giants as erstwhile news media behemoths could not decide whether to block or befriend these tech giants. What happened was another catastrophic signing away of the initial leverage with readers on to search and social media giants for small amounts of money growing at a fast pace.

This was the second big mistake made by media companies. Together, these pretty much disenfranchised these organizations to become subservient to advertisers and tech giants, with the ultimate reader or consumer becoming a slight irritant who is needed to show numbers to extract advertising revenue from either of the aforementioned parties. In this milieu, the journalist and the editors caved in and protected their jobs and families, as one would rightly do, instead of prevailing on managements and promoters. But that was a tall order and the damage was already done.

The second factor; Hubris of Promoters; This is a rather well documented piece. From the original band of 5 or 6 promoters of media organisations, no one remains in control of what they founded. And unlike the rather happy exits of founders in tech driven or consumer driven businesses, most of these exits have been slump sales. For a business that reached out to almost 85% of a billion+ Indians, these promoters as well as companies have not been able to create value for their shareholders or even themselves (on a relative basis). Some of the families that control the traditional newspaper businesses have held on to control but their valuations are a fraction of their total revenue. This is a unique situation peculiar to India. Nowhere in the world has a business like the media not been able to feature in the top 10 or 20 businesses in their respective countries; be it Germany or the US. Indian promoters, in the boom years of 2005-2008 got carried away by empire building ambitions in unrelated businesses. From home shopping to yellow pages to film production to even real estate, education and infrastructure, the landscape of Indian media is littered with failures of their promoters in unrelated businesses. This hubris coupled with the inability to fund existing businesses as a result of these capital shocks due to failed unrelated ventures brought these organisations down even more hurriedly into the arms of tech giants who offered some visibility of revenue (though peanuts) and audience growth, albeit by handing over the customer ownership reigns. In hindsight this may be the single biggest factor for the decline of Indian news organizations as well as the media sector’s tailspin. Some of the blame is also due for the promoters of media companies that did not list their businesses when the going was good as they feared a loss of control and accountability to multiple shareholders.

The third factor; Government policy and myopia of promoters; Back in the day when a section in the print media celebrated the imposition of a 26% cap on foreign investment in newspapers, little did they realise that this would become the millstone around their own necks. This regulatory hurdle created opportunities for upstarts to create news organisations in television and digital and span areas such as entertainment as workarounds. Many of the media companies that listed on stock exchanges in the 2000-2005 period owe it to the policy strangulation of print for their existence, besides other regulatory hurdles like price control of newsprint and import restrictions etc. 

With each successive technological leap, the existing players demanded parity, in strange way by bringing the new media to face the same hurdles that they faced instead of demanding liberalisation of the sector as a whole. The recent 26% cap on foreign investment in digital news media also reeks of a similar, ‘bring everyone down to the lowest denominator’ approach. The media industry in India put together doesn't have the market capitalisation of a mid tier IT company and that speaks volumes of the myopia of interested parties, be it government or incumbent promoters wanting to protect their turf. During the same time, foreign media and tech giants used safe harbour provisions under the IT act and rid themselves of such restrictions and liabilities. They claimed to own the platform and not the content and hence were absolved of regulatory pressures that publishers and traditional media companies faced. This in itself should have been the single biggest totem pole around which everyone should have been able to push for liberalisation, instead, another self goal has been scored. 

The fourth factor; inability of journalists to adapt to technology and lack of relevant formal training; This is fairly self explanatory. Most journalist friends I had back during the print era of the 90s could not make the transition to television. Most of my colleagues during the boom of television era could not make the transition to digital. A few have but they’re exceptions. This is due to a combination of factors, one of them being there being no real formal re-skilling options that any of our journalism schools offered combined with the slight nonchalance and belief that this problem will hit the next generation and not themselves. This re-skilling isn't only about using tech tools but also understanding the audiences using technology. Somewhere technology and data, instead of empowering the journalist started disenfranchising him or her.

The fifth factor; Technology; Again a well documented piece. The foundations of the tech movement in media strangely were built on scavenging of traditional media. The first 10 years of Google and Facebook were pretty much dependent on content being surfaced from the work done by traditional media organisations and journalists. This foundation gave the tech giants the necessary space to create a user driven model which led to further disenfranchisement of media houses and journalists. Opinion and user driven fact-telling became as voluminous or more than what came from traditional media houses. Depth started getting replaced by volume and quantity. This is not an accident. This is a conscious design. The latter is virtually free from the pov of the tech platform whereas the former costs money. It's another matter that they didn't end up paying anything decent by way of revenue share to publishers, but that was in my opinion a negotiation failure on the part of traditional media organisations. 

Very interestingly the very regulator who traditional media organisations ran towards, currying favour in scuttling the next media company is now being looked up to to help the traditional media sector extract some dues from tech giants who use their content. My sense is that this may already be slightly late in the day, though Australia and some countries in Europe are pushing for it with some success.

The sixth factor; Capital; Indian media has been lackadaisical about effectively raising the quality and scale coefficient of their products and as a result the access to quality long term capital has always been a question mark. While a traditional media company like Disney is giving a fight to the Amazons and Netflixs of the world or for that matter the NYT, WSJ, FT or Washington Post have managed to build digital interfaces and monetisation through paywalls as well as first grade digital products, no incumbent Indian media company has been able to scale up, particularly from a global and digital ambition pov. This, coupled with the history or poor shareholder returns of Indian promoters due to factors mentioned earlier has created a sub-par capital structure for most media companies. No wonder they’re being acquired for cents to the dollar.

Each of these factors have had interplays with each other and I am not writing down some of the other factors that have also played a role. But if you notice, there are fewer reasons within the control of journalists or editors here except that they gave up without a fight back in the 90s and 2000s and their ability to upskill. They perhaps thought highly of their promoters and management or they may have thought that sales and advertising revenues will provide them with a hedge and hence allied with the overarching milieu of the day, that of seeking advertising revenue first and letting go of even a faint belief that they stand a chance to extract some rupees from the reader or viewer.

So can journalism and journalists save themselves from further ruin? Will journalism ever become a profession that commands respect? Will our children think of a career as a journalist financially as well as emotionally rewarding? Will news media become a business of consequence?

The answer in my opinion will come from a new breed of ‘journalists’. Some hints at such endeavours are already being witnessed where strong products which have been created by journalist founders have got traction enough to be able to command a subscription revenue source.

I also think that some of the tech giants will ally with credible and qualified journalists to improve their rating on parameters such as hate and fake news. This would be an opportunity for journalists to go straight to their readers without the intermediation of the archetypal news organisation (which incidentally spends less than 20% of it's overall monies on the actual process of news gathering and primary reportage). Strangely enough advertisers are in many countries leading the charge when it comes to not spending money on platforms that have brand safety issues.

I also believe that there will be more emphasis on primary reportage as compared to opinion and analysis in a sort of ‘reverse wave’. And one important piece of regulation might change the game in favour of credible news media organisations and journalists. That of bringing tech giants at par with publishers and making them responsible for the content they serve. This in my view will be the single biggest step to get rid of the artificial safe harbour provisions that allow some of the tech cos in search and social media to get away without claiming responsibility for the user generated and other content they end up serving. This will trigger a move towards verified, credible sources be it individuals or organisations, reducing the incidences of fake news, hate mongering and also conveniently polarised facts and opinions. This will also improve the revenue share potential with credible news players be it individual journalists or news organisations that have invested in quality journalism. This may however not reduce the politics of news totally, but it may help improve authenticity.

Initially it may seem antithetical to the democratisation of content that tech cos helped spawn, but in the long run the tech cos themselves will be thankful to be able to live a litigation free life as trusted news sources take over. It will also help their chances of improving advertising revenues as brand safety improves and may also help drive consumer revenues.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

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Ajay Chacko

The author is Co-Founder & CEO, Arré

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