Is David Carr a troll?

Seriously.

I’m not trying to be funny. There is no way that his columns are real. No way.

I’m convinced they only serve as link bait. He writes some of the most asinine, unresearched, unfathomable crap ever. There is no way the NY Times hired him to do anything other than troll and bait people.

Right?

If Carr is for real than he is a bona fide cubic moron. What’s a cubic moron? It’s a moron times a moron times a moron. In other words, someone who would write this: Let’s Invent an iTunes for News.

Actually, maybe Carr is the smartest person on the planet. He gets paid well to write some extremely poorly thought out — and rarely researched — crap that he doesn’t really understand.

Could you imagine getting paid well to do something really poorly? Something that you obviously put very little thought and time into? Carr’s a lottery winner as a far as I’m concerned.

Here are a couple holes I was able to punch on Carr’s latest gem with very little effort on my part:

  • iTunes is not a main money maker for Apple — Apple has said repeatedly that iTunes doesn’t make huge profits. It’s purpose is to get people into the iPod/iTunes ecosystem. That ecosystem has now been extended to the iPhone and Apple TV. Repeat after me: Apple is a hardware company, not a software company. All the software they make is geared towards getting people to buy hardware. Guess why iLife isn’t on Windows? Because Apple doesn’t sell Windows hardware. Simple as that. Certainly the store has a much greater potential to make more money now that it is selling applications and video, which often cost much more than a $0.99 song. But it is difficult to make much of a profit on individual music tracks when Apple has to pay between $0.10 and $.25 per song to credit card companies in transaction fees. Regardless as to whether or not Apple can make a lot of money from iTunes, it’s not relevant to this debate. iTunes was started in order to get people to buy hardware. What hardware do newspapers sell again? Ultimately, if Apple is able to make lots of money from iTunes, it’s probably related to something other than the ala-carte song model.
  • When have newspapers ever charged for news? — Newspapers charge for the product that is the newspaper and not the news itself. The physical production of a newspaper is expensive. Printing and distribution can often be more than half a newspapers operating cost. For those of who “pay” for the newspaper (and I do), we often get the newspaper at a subsidized rate. Most newspapers are happy to sell subscriptions below printing and distribution costs in order to boost their circulation numbers. Why? Because newspapers are an ad-supported business. An online-only news company can run much, much leaner than a newspaper could ever hope to. It’s imply comparing apples to oranges.
  • Um, the LA Times? — Has Carr forgotten about how the LA Times online revenues are now enough to cover its entire editorial operations? Whoops. We don’t need an iTunes for news to keep news alive. We might need, however, to jettison costly print operations at some point.
  • People pay for services — Home newspaper delivery is a service. Generic news (and most news is by definition) is not a service. Simply charging people to read individual stories on newspaper Web sites is not a service. Newspapers can charge for legitimate, bona fide Web services. But what legitimate services have they ever thought of? If newspapers do start successfully charging for services on their Web sites, I doubt they’ll be news related.
  • http://www.collegemediainnovation.org/blog Bryan Murley

    Would someone who writes link-baiting columns be considered a “troll”? Isn’t that sort of the whole idea of punditry? Why else does Ann Coulter have a job?

    Could you imagine getting paid well to do something really poorly? Something that you obviously put very little thought and time into?

    We could only dream. :-)

  • http://www.suzanneyada.com Suzanne

    But the examples Carr gives of Cook’s Magazine and Consumer Reports are both ad-free publications. I actually think he may be on to something. It’s what we are talking about behind the scenes of The Public Press, since we’re also trying for the ad-free subscription-based model.

    Carr describes the database of recipes as something he would subscribe to get. That’s a service.

    Consumer Report’s online database and archives, that’s a service.

    The only thing I can think of that newspapers could offer online that would be worth my money are thorough, robust databases, like live police blotters searchable by area, schools databases and tools that make it easier for the public to search through public records.

    Building that kind of content (and platforms!) will take more manpower to produce, yes, but it always takes money to make money.

    I think David Carr is not so far off his rocker.

  • http://www.suzanneyada.com Suzanne

    I should add a couple of thoughts:

    1) I don’t think the pay-per-article model would technically work, and I’m not advocating that. But I really do think the “free is the new business model” is completely unsustainable, and that’s what Carr’s main point is.

    2) Re: The L.A. Times: I would really like to see the actual numbers, because Jarvis’ post leaves much unanswered. Of course the LA Times is going to brag to Jarvis how well they’ve done. Will they ever release numbers to back up their claims?

  • http://kiyoshimartinez.com/ Kiyoshi Martinez

    That point about the LATimes online being able to pay for all the costs of the paper might not be correct. When you think about it, unless they’re getting some REALLY high ad rates, with traffic levels at what’s being reported, I don’t think they’re covering expenses.

    Unless someone’s got the financial breakdown of what costs are and what revenues are coming in from online ads (and you can’t fully count the ads that are upsells from print display ads, either), maybe I’ll believe it.

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  • http://sellingprint.blogspot.com Michael Josefowicz

    Kioyshi,

    I’m with you. Meanwhile it turns out that some number of the the online ads were bundled with the Print ads. So which was the “nice to have” and which were the real value in the eyes of the advertiser?

  • http://www.collegemediainnovation.org/blog Bryan Murley

    Suzanne points out that the “news is free” business model is unsustainable. But the news is free has *always* been the business model. Subscriptions and rack sales cover distribution – not the newsroom. The ad-supported model has always presupposed the news as a wrapper around ads.

    While we don’t like to admit it, newspapers aren’t in the business of delivering news to the public. they’re in the business of delivering eyeballs to advertisers.

  • http://sellingprint.blogspot.com Michael Josefowicz

    How’s that working out these days?

  • http://www.patthorntonfiles.com pat

    @Bryan @ Suzanne,

    There was a time when advertising didn’t support newspapers, but that was long before today’s modern, objective model. The problem that newspapers face (and indeed many companies) is creating enough value for advertisers on the Web. In addition, many advertisers have been slow to embrace Web-based advertising.

    Advertising supports many new media startups like TechCrunch. So, it can clearly be done. But those are startups without institutional memory and bloated staffs. Certainly, the Web is nowhere near able to support the bloated payroll of yesterday’s large metro newspapers.

    No, the Web requires companies to run lean, to hire well and to shed unneeded talent. Newspapers don’t do any of those.

  • http://www.patthorntonfiles.com pat

    @Kiyoshi @Michael,

    A clear breakdown would be great. Obviously, online revenue can’t support what the LA Times is doing right now. Even if online revenue could support the editorial staff, that still leaves a lot of other, important people not being paid.

    Still, it is moving the needle in the right direction. Look at how much traffic growth the LA Times witnessed to their Web site. That’s impressive.

    As long as newspapers print a daily publication, the Web will probably never make enough revenue to support current newsroom operations (that is combined with ever declining print revenues). A move to a weekly print product may be a smart move for many newspapers to make ASAP.

  • http://sellingprint.blogspot.com Michael Josefowicz

    @Pat,
    With all due respect, I have to disagree. We do agree that to be supported by the web, the overhead will have to continue to be cut to the bone. Where we disagree on whether the right business move is away from Print. My contention is that the real money is in Print, with web revenue as a nice addition. The marginal cost of web advertising is essentially zero. So anything they earn goes straight to the bottom line.

    The better business approach, IMHO, is to use the unused capacity of editorial and writing journalists (probably not investigative journalists since investigation is now so much easier on the web) to create Print products that people will willingly buy.

    I agree that a weekly publication is possible. But I think they would be much better off producing Print special issues based on the news cycle, not the calendar.

    The longer argument about why I think this is true is at my blog at:
    http://sellingprint.blogspot.com/2009/01/people-are-talking-at-newslessorg.html

  • Chris

    Michael is right, but cutting to the bone would not be cutting far enough. MediaNews Group followed that very model … now every paper in the chain has deteriorated so far that they have delusions of mediocrity.

    I think — and as a journalist, I fear — that news-gathering will survive iff a market model is imposed.

    Journalists would be paid strictly be paid based upon how much news is consumed. Online, it would be paid for by clicks. In print, the formula would be to compensate journalists based upon giving them a fraction of paid circulation.

    What this would mean is that in order to play in this field, journalists should expect to place a period where the comma is now in their salaries. For doing the same amount of work as now.

    Doubt that this could ever happen? Think about this: All but a fraction of 1% of bloggers get paid zero to create content. They would be more than glad to accept $50 a year. So would a PR person who is giving work away free just for newspapers to have their press releases written.

    After all, $50 a year is greater than zero. For a journalist, $50 a year means starving to death. They’ll just find another job and earn that $50 on the side.

    More importantly, newspapers would still grant a far bigger credibility upside to a blogger or flack than it would for a journalist, who has to have credibility just to be screened by human resources.

  • http://sellingprint.blogspot.com Michael Josefowicz

    Chris,
    I have to agree and disagree.
    The agree part is “I think — and as a journalist, I fear — that news-gathering will survive iff a market model is imposed.” But the interesting question is which market model?

    Now here’s the disagree parts. “…upon how much news is consumed.” News is not consumed. Mostly it’s not even read. It’s the background noise. Sorry, but there it is. Sure every once in a while a big thing happens. A presidential election (only 65% voted last time). Or a plane crash. Or a meltdown. or ….Then there is focus for that news cylce. Then background noise again.

    But day to day – the way newspapers are published. It’s mostly background. Just the way advertising is background.

    The reality is that readers – not wrod decoders – are a niche market. 130,000 hardcovers sold gets you number one on the NYT best seller list.

    So… the real good news/bad news is that news is only now becoming a real value. Mostly because of the web, more and more people are becoming readers. Still a niche market, but growing rapidly.

    So…use the web for finding the niche market of readers. Then sell them printed stuff that is really interesting to read. As the market of readers grow, journalism will thrive.

  • Chris

    Michael Josefowicz wrote:

    Now here’s the disagree parts. “…upon how much news is consumed.” News is not consumed. Mostly it’s not even read.

    I wasn’t clear. When I said “market model” and consumed, I mean turning the compensation model upside down and inside out.

    By market model, I mean a journalist would only be compensated by a measured amount of content that would be based upon a metric. Presently, much of journalism is either produced by a paid staff or freelancers.

    Both, however, though, compensate the journalist based upon the input (work) put into a product. Staffers would get a wage, freelancers would get paid by a negotiated rate of production (length or by word).

    The problem, in the eyes of a publisher or finance person, is that these costs stay fixed while revenue is highly variable … in the wrong direction.

    A worker must be paid for the labor regardless of how many people actually read the story. That’s bad news if it turns out to be one that is of a high quality but draws little interest by readers.

    What is to be done?

    Economics, at its heart, leaves two and only two options: Grow income or reduce expenses. That’s it. It’s not models. It’s not marketing. Grow or reduce. That’s the high concept.

    Journalism’s people problem, in the eyes of the folks pulling the financial levers, isn’t waning relevancy or troubling demographics. Ultimately, it’s up to the financial people to determine if they should fish or cut bait. If news is a loser, what can the corporation do with its remaining capitalization and getting out with something?

    The problem with trying to match a revenue shortfall with a corresponding cut in expenses almost always sets off a downward spiral. When cuts are made, the managers are in the jaws of a shark. There’s no positive outcome to them. The cuts can either be too deep, where the layoffs correspond with multiplier effects of diminished quality and consumer resentment (most readers can empathize with workers and won’t support a media organization that turfs its own people). Or, the cuts aren’t deep enough and only call more attention to the operation and there is more pressure by managers to make futher cuts. If an organization must lay off something like 25 percent of its workforce, and it could be determined that the organization can still function, it perversely signals that the operation was overstaffed to begin with.

    Maybe the problem is with the kind of cut. Managers should follow the example of the carpenter, not the whittler. The latter shreds away until the desired outcome. The former makes careful calculations and makes one cut.

    The one big cut, though, would be the market model. The compensation to journalists would be based on consumption in the sense that their work would only be remunerated based upon how many unique Web visitors click on the story or in print based upon length of content divided by the paid circulation revenue for that day’s issue.

    That’s what I mean by consumption.

    It’s a fairly good indication that a Web click means a read. Not everything gets read in a newspaper, but no one works for free and will need to be some form of remuneration. By pegging story payment to paid circulation, this ensures that paid circulation will be the compensation bursar. This means a newspaper will never lose money on a story. If circulation drops, so does the journalist’s compensation. Automatically.

    I’ve done a rough back-of-the-calculation estimate of how much a journalist can afford to make under such a scheme. It came out to roughly 1/1000 of their present gross pay. And this is assuming that they spend 8 hours a day and 5 days a week creating copy. If a journalist costs $50,000 to a newspaper, they can expect to be ink-stained wretches at $50 a year.

    Does this mean with such lousy compensation that no one would put up with that kind of work? Only journalists would think so.

    The economic sun would now shine on aggregators. Bloggers are mostly producing volumes of content for nothing. Any compensation is more than none at all. Press release writers get free publicity when their wares are rewritten. Heck, now they could get a little back for their work.

    Also, remember that there’s a population of the world that’s larger than every working journalist in the U.S. that must make life-or-death choices by living on $50 a year.

  • http://sellingprint.blogspot.com Michael J

    Chris,
    well taken, but ….
    I think the heart of our disagreement is
    “Points Economics, at its heart, leaves two and only two options: Grow income or reduce expenses. That’s it. It’s not models. It’s not marketing. Grow or reduce. That’s the high concept]”

    Actually there is a third option. Connect the resources you have with other resources that you don’t to innovate a new product that serves the unmet needs of your present market.

    Here’s what that might mean.

    First face the fact that there are relatively few people who read. The world is full of viewers, not readers. The good news is that the number of readers is increasing every day.

    So …Make new stuff that you can sell to readers.

    Second face the fact that for advertising to continue to work, a whole new class of advertisers have to be brought into the market. Google has over 1,000,000 advertising clients. Every region and locality has thousand of small business that don’t advertise. Meanwhile, the big brands, like WalMart and others are realizing they don’t know need media to advertise. Their market access is greater with their own businesses. Wal-Mart in store TV is being rolled out now. Their reach is greater than any publication. And most media.

    So, make it much, much easier for local business to advertise.

    Third, face the fact that the number and qualityof interesting wonderfully told stories is pretty low most of the time in most newspapers.
    If you can’t tell a good story, don’t tell it badly. And stop chasing the news cycle. If someone else can tell the story better. Point your reader to the best there is. Meanwhile, a good editor should be able to tell their viewers what is the most important for them. So, do that. They will love you for it.

    Fourth, the reach of newspapers had as much to do with Dear Abby and color comics as with what was in the news hole.
    So..link to the great journalist and grow at least two or three great jounralists that other people will link to you.

    Once these basis facts are faced, we’ll be able to figure it out. New business models – as in how to earn money – are emerging. Mostly at the regional level. The important point is that “journalism” is only one among many.many issues to consider to figure out what is next.

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  • Chris

    Michael, you have a very keen idea for how organizations can improve.

    It can further be refined to newspapers knowing what their core value product is, and what they can do that no one else can.

    This is when they should innovate. They need to do something no one else can do, or be the leader in their field.

    Innovation — change for the sake of change — has the risks of huge failure, on an order similar to small business start-ups. Know that statistic of 90% of businesses failing within their first years? The same applies to new ideas and processes. It’s not necessarily a failure to innovate that makes a general failure. Often times, it’s a good idea that was rolled out at the wrong place, wrong time, or the wrong target audience. (Look at Apple today versus the ’90s while Steve Jobs was away. During that time, most of its product launches were miserable failures. However, even for the stuff that failed, many of them were revived by other companies and are successful concepts more than a decade later).

  • http://sellingprint.blogspot.com Michael Josefowicz

    Chris,
    Thanks. Whatever I think I’ve learned is by making most of the mistakes a bunch of times. Also I had the “learning experience” of teaching at Parsons School of Design for about 7 years.

    Anyway, here’s a perfect example of the silly thinking going on at newspapers, in particular the NY Times. Turns out they are releasing a book on Obama’s Campaign. Given that it is edited or whatever by pros, it’s probably a really good book.

    So, as far as I can figure out, they have set a “release date” for February 17th “Presidents Day.” Given what I know about the silly sales channel for books that means books are at the warehouse at Ingram’s or on the truck.

    Here’s the question:
    How many books and how much profit could go into the NYT if they sold the book TODAY ddirectly from their website, with ads placed on the web next to all the “news” coverage they are posting?

    Then consider how many books and how much profit will go from the NYT when they sell the book through normal channels on Feb. 17. “President’s Day.”

    They deserve to get bought lock, stock and barrel by some half smart VC or Hedge Fund, then broken up for parts. Meanwhile, there will undoubtedly be more ink wasted on the “Decline of Print, or Journalism or The Internet is gonna eat your momma!

  • http://www.collegemediainnovation.org/blog Bryan Murley

    “Know that statistic of 90% of businesses failing within their first years?”

    source? I’ve heard that about restaurants, but not *all* businesses. Don’t quote a stat unless you have a source. And BTW, innovation does not equal change for the sake of change.

  • http://sellingprint.blogspot.com Michael Josefowicz

    From

    from:
    http://www.businessknowhow.com/startup/business-failure.htm

    The Seven Pitfalls of Business Failure
    and How to Avoid Them

    by Patricia Schaefer

    The latest statistics from the Small Business Administration (SBA) show that “two-thirds of new employer establishments survive at lease two years, and 44 percent survive at least four years.” This is a far cry from the previous long-held belief that 50 percent of businesses fail in the first year and 95 percent fail within five years.

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