Sunday, December 11, 2011

The Commercial App

Posted By on Sun, Dec 11, 2011 at 10:16 AM

The Commercial App?

Oedipus, the Theban king, who believed in himself with such vigor only to fall so far, is an apt metaphor for large media companies that have chased digital dreams in the face of economic ruin. The Commercial Appeal announced layoffs last week, just months after launching its mobile app. The big daily seems to be executing the role of Sophocles’ monarch.

There is no way around the competitive challenges facing the newspaper industry. Information, once at a premium, is now a commodity and smart consumers get it for free. Once, valuable journalism created two revenue sources for publishers: subscriptions and advertising. The availability of free information via the Internet has caused a destructive feedback loop in that revenue model: a fall in the number of subscribers, which then eroded revenues from the advertising side. Online advertising has always been more hat than cattle and never has come close to covering the spread from the losses in the two vital revenue streams. Big problem.

But what does a ruler, or publisher, do? It helps to think like an investor.

Every investor constantly faces two options: invest or don’t invest. The publisher’s choice is to invest in new media or not invest. The latter has an obvious risk: The returns on the print publishing activities are going to continue to erode. Papers with fixed costs (such as giant headquarters and printing facilities) are put in a vise between falling revenues and costs that don’t fall (like leases and loans). Investment capital does not like this scenario. In fact, The New York Times is paying insane rates of interest to Mexican billionaire Carlos Slim, just to say afloat.

As for the former option: the investment in new media is expensive, and the revenues are not materializing to sufficiently cover those costs. But here’s the kicker: The expensive new investments are chimerical. The horde of free-information-seeking media consumers is fickle. People who think they can keep up have a bridge (or an app) to sell you. When did you last check your Myspace page?

Which brings me back to the CA and what is happening to Memphis’ largest pool of reporters: that is, the people who gather information that helps us participate in democracy.

The CA doubled down on the app. They put up a pay wall, requiring payment for their digital content. Scripps and CA management appear to be trying to solve the problem with an app. This is a poor city. I-whatevers are expensive. How can this be wise?

Full disclosure, I subscribe to the CA, wrote one story for them, and (ironically) applied for a job in the online division: There was a better candidate. No hard feelings. I prefer working at the Flyer for a million reasons.

But reading Mike Royko and "Bloom County" over breakfast every morning as a kid led to my career in journalism, as well as my passion for this city. Other kids liked football, I liked Lewis Grizzard and Perre Magness. Weird, I know. After moving back home to Memphis two years ago, I subscribed. Soon the papers started piling up. I convinced myself I was reading enough online, so I let the subscription go. Recently, I bowed to reality, got the Sunday-only subscription and opened my mind and wallet to the app. So I’ve earned the right to have my say in how the thing is run. I give a major damn about The Commercial Appeal and about the people who work there. That said, I am tremendously disappointed by the technology and appalled at its consequences.

The fundamental exercises of reporting and reader experience are placed in submission to gadgetry. It’s like GM stopped making cars and dedicated itself to Hello Kitty. Except way sadder and more detrimental to informed democracy in Memphis. In this app, we have a toy that society will soon abandon. Investors will eventually call this a sunk cost.

Those costs hurt Memphis. We need more Calkins and Beifuss, not digital bells and whistles. If the absentee parent company could give us more content from people with genuine insight into our local situation, people would respond. Maybe that’s not enough to save a big newspaper. But that choice beats a self-destructive campaign against your own essence.

This latest round of job cuts at the CA probably won't be the last, but printing and real estate costs are not as easy to cut as people. The number of journalists keeping an eye on our government, looking out for local threats to our health and economic well-being will continue to decline. You can complain all you want about the media; but do you trust your elected representatives to self-report their behavior? Me neither.

There's no app for that.

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