The Future of News

Thursday, November 10, 2011

Jan Schaffer and Tom Rosenstiel discuss the future of the international news media, including the proliferation of media outlets, their changing business models, and the effects the new media landscape has on an informed public.

MEGAN MCARDLE: Good morning, folks. So I'm going to actually -- welcome -- first, welcome to today's CFR event. And second of all, I'm going to actually ask you to turn you cellphones all the way off; don't just put them on vibrate. I may look like I am cheating, but I have virtuously put it on airplane mode; it's only because, like many people my age, I no longer own a watch, so that I can watch time.

So as a reminder, this meeting is on the record. And before we begin today's program, the council is pleased to announce an upcoming meeting Thursday, November 17th on education and U.S. competitiveness. For more on -- information on that, you can just look; there's an insert in the back of today's program.

So today we are here to discuss the future of news. And we have two distinguished panelists. We have Tom Rosenstiel, the director of the Project for Excellence in Journalism at Pew, and Jan Schaffer, who's the executive director of J-Lab at American University.

So I have discussions with this a lot. I'm married to another journalist. So as you can imagine, we spend a lot of time talking about the future of journalism, which is kind of, in some ways, like talking about the future of botulism or the bubonic plague.

And I was talking to one of my colleagues a few weeks ago, and he said -- I said -- I give -- periodically give talks to young journalists, and he said, oh, I can't take those anymore. And I said: Why? And he said: Because I can't in good faith get up and say, go be a journalist. It's like urging someone to book first class in the Titanic.

And so, you know, a lot of us are really worried. What does this -- you know, this is obviously bad for journalism, but it's also arguably bad for the rest of us, right? Who's out there searching out news?

And so I'm actually just going to throw that question open to you both and start with you, Jan. How bad is it, and how much does it matter? Nice, broad question to --

JAN SCHAFFER: I am not a pessimist; I'm an optimist, and I don't think it's bad at all. And I don't think the future of journalism is about a pity party for journalists. I think very much the future of journalism is probably going to be smaller and smaller news outlets having bigger and bigger impact, so that the kind of journalism I grew up in, from the Washington Post or the Philadelphia Inquirer, we're going to see less of that, but we are going to see a lot of very good news and information coming from different kinds of news startups happening.

I think we'll have new national startups happening. It would not surprise me that we would see something new coming from the likes of Bloomberg or a BBC or a Reuters. I think we're going to have a lot of hyper-local startups happening. There are probably more than 3,000 in the country right now that have started up. And frankly, they are providing news and information for communities that we're not getting at from their regional news organizations. They're going on to a very granular level.

I think probably where the most pronounced problem is that -- in the mid-layer, where you have regional news organizations who are probably challenged because they have not only no business model but no portfolio. So I'll leave it -- turn it over to Tom from there.

TOM ROSENSTIEL: Well, first thing I would say is that this is the most dangerous question, the one that -- the answer that I'll regret the most and most certainly the -- you know, the one that's most likely to be wrong: What's going to happen next? What's it going to look like? But I would say that I agree and disagree with Jan.

I'm am optimist, too. I'm an optimist because the data make it pretty clear that people, contrary to many predictions, still gravitate to news. They still gravitate to news from sources that gather and report the news according to fairly traditional and conventional and professionalized methods and values. And the data are pretty clear that people still want to find out what's new today, not drilling down to just the sub-subjects they're interested in, and nor do they gravitate broadly to just sources that they agree with. There's a lot of people who will argue to the contrary. The data is very clear that that's a misimpression. We're not retreating to red truth and blue truth sources primarily, and we're not retreating to blogs and alternative approaches.

Where I will disagree with -- and I would also say that what I tell young people is that it may not be a great time to be 55 -- just to pick one age that somebody on the panel might be -- in journalism, but that it's a spectacular time to be 20 and thinking about journalism.

SCHAFFER: Well, it's not very nice of you to tell people my age. (Laughter.)

ROSENSTIEL: (Laughs.) The -- and the reason is that when I was in graduate school at Columbia, we were simply trying to learn how our elders did it. We were in a kind of Ciceronian mode of emulating, copying everything they did, and trying to be like them. The idea that we could invent the next journalism, or that we would have more tools or better tools, or that the journalism that we could create would be superior because of new technology, never entered our minds -- or that we could own it, never entered our minds.

When I got to the L.A. Times, I was 27, and I said to Paul Steiger, who hired me, "The best thing about today is I will never have to look for a job again for the rest of my life." (Laughter.) I thought that -- you know, that's the way it worked.

But let me just say where I differ from Jan. The big are getting bigger. Contrary to the myth of democratization of media, the economics of the digital environment, at least right now, is towards enormous concentration and market share in the hands of a handful of producers; also, toward information elites having access to information that they pay for, for professional purposes, through elite niche newsletters; a paucity of information aimed at general audiences, particularly about state and regional affairs -- a significant shrinkage there; and an uncertain but interesting hyper-local ecosystem of people who want to fill in gaps that have been long-standing, but there is no clear economic model that establishes whether they can have viability.

SCHAFFER: And I would like to add I don't actually think we disagree. I mean, I think when Tom says the big are getting bigger, that's very true. I think of journalism as sort of in different layers: There are those who take the 5,000-foot view, the 500-foot view, the 50-foot view. And at the 5,000-foot view, the big news organizations that are covering serious master narratives -- serious issues about what's happening in the country, what's happening in an enterprise vein, what's happening in an investigative vein -- are really very robust and healthy. The B2B models of news are very robust and healthy. If you look at BGOV, Bloomberg's new initiative -- I mean, there are lots of good journalism happening now behind very high pay walls that's very robust. But Tom is right, that's going to elites.

The 50-foot view, where you have all these hyper-local initiatives going on, is very robust as well. Everybody talks about one business model for them. I'm not sure -- I'm not sure that there's anything wrong with serial entrepreneurship, and I'm not sure that any one of these initiatives has to last forever. I think it's fine if it lasts for five or six years and then something else emerges to take its place.

But where Tom points out on the state level -- what I will call the 500-foot view level -- is where we have the most serious problem. And this is equivalent to statewide coverage, state governments that are not getting coverage. The ray of hope that exists there is we're starting to see more and more watchdog news outlets opening up in state capitals. So you have things like Oklahomawatch, Iowawatch, Wisconsinwatch, Florida Bulldog, Vermont Digger, Californiawatch is one of the bigger ones, Texas Tribune, happening around the country. And I think there's a likelihood that we would see one of these in almost every state by the end of the decade, sharing news and information with other news entities in that state.

MCARDLE: Well, let me ask this. I came out of the blog revolution. Before I was at The Atlantic, and before that The Economist, I was a blogger. And we -- at the time, I think there was a sort of triumphalism very early on about how we were going to replace journalism, and that didn't really happen. But what I do think we ended up doing pretty well was becoming complementary to big journalism, right?

I mean, the Dan Rather case I think is a really good case of something that was wrong, and that might have stayed wrong for a long time because you had -- suddenly had 10,000 typographic effort -- experts kind of poring through this stuff on the Web and running all of this. And if it had happened at all, it would have taken months or years, and it would have been sort of a non-story by the time I think it ended up breaking out. And now as a journalist I sort of operate with a little blogger sitting on my shoulder -- (laughter) -- knowing that if I make an error, it's going to be all over the Internets. But --

ROSENSTIEL: (Chuckles.) I'd just -- I would just say that people in my generation sat with an evil city editor -- (laughter) -- (inaudible) -- on their shoulder. So it's just a different person, but they're still on your shoulder.

SCHAFFER: Oh, well, there's more of them, though. There's actually like 10 million. I've known troll blogs now, so --

ROSENSTIEL: Well, there were a whole lot of city editors. That wasn't good. (Laughter.)

SCHAFFER: Yeah, well -- but when you look at the coverage at the state level, I mean, something like The New York Times has sort of, to me, as someone who grew up there, shockingly bad state-level coverage. I mean, it's like they really don't care, right? What they care about is national news and some local and style. But they don't care about the state government because it's really boring and filled with fairly grubby politicians who talk about construction contracts all day. And --

ROSENSTIEL: I'm not sure Jill (sp) and others would agree to that statement. But --

SCHAFFER: (Chuckles.) But that might not be their portfolio. Maybe that's not what they want.

MCARDLE: But this is the question is that the people who are -- this symbiosis is really good at a national level because there's a lot of people who are interested in it, and you can -- you can sort of add and sort of embellish the debate and keep the cycle moving. If no one -- if old journalism isn't doing that middle coverage very much, does the -- does that symbiotic relationship work? How is the -- you know, how is it changing without -- with so much less presence in that 500-foot level where the Internet is no longer a check, but actually being asked to step in and fill in news?

SCHAFFER: Well, I think old journalists are doing it. They're just doing it new vehicles. They're doing it on new websites, and the websites don't need delivery trucks and newspaper rolls and printing presses and that sort of thing, so it's much more efficient. There's an ability to be far more transparent in this -- in this mode. There's ability to crowdsource your journalism to jump-start the reporting a lot faster. And with digital data now there's -- it's -- far more capacity to create tools and apps so that you can create data libraries where people can find their own stories.

So I mean, there is that level of activity happening at this 500-foot level. And by and large, it is happening from professional journalists who have been displaced or downsized in one manner or another from traditional news organizations. They're just doing it in an entrepreneurial way.

MCARDLE: What are your thoughts?

ROSENSTIEL: Once again I see it a little bit differently. You know, the numbers in statehouses that are accredited are down.

SCHAFFER: Right, that's true.

ROSENSTIEL: So then the question becomes are these folks doing it but not going through the formal accreditation process or not, you know. Jan mentioned Texas Tribune, which is in Austin, is now the biggest -- it's an online-only news operation, and one of the most aggressive and innovative, run by really dynamic folks. If anybody is going to make it in that nonprofit online-only space, I'd put a bet on Texas Tribune and a couple others. They've got the biggest statehouse bureau of anybody because the others -- the traditional outlets have shrunk.

But there isn't a Texas Tribune yet in a lot of states. Texas is a unique place. It's also really big. Even California doesn't have anything quite like that.

SCHAFFER: They have California Watch. That's pretty robust.

ROSENSTIEL: California Watch is a -- is an investigative unit in San Francisco. It's not doing --

SCHAFFER: Right, in -- (inaudible) -- but they have a Sacramento base.

ROSENSTIEL: Yeah. I think the -- you know, one of the things to know -- and this is just -- you know, there are certain sort of elements of gravity -- gravitational pull to this. The new technology is, at this point in its evolution, still largely distributive and discursive, which is to say it is good at taking things that other people have done and distributing them very widely very quickly and contextualizing and talking about them. But if you're not paid to do it all day long, it is hard to go out and uncover new things and make it reportorial.

So our media culture is growing but not growing in a simple way. The commentary dimension of this media culture is getting larger. The reportorial dimension of our media culture, wherever, at all levels, is actually getting smaller. And that's changing what happens. New information comes in -- comes in iteratively, and we talk about it a lot before the next bits of information come in. And we never really end up with a -- you know, the -- an account. It's like -- what exactly happened in Penn State? What did Paterno know and not know? It's actually hard to kind of find that story if you're reading it on --

MCARDLE: Let me ask about that, because, you know, I live in a small neighborhood in -- just across North Capitol into Northeast, and the kind of reporting on my very local issues is actually much better that it's ever been -- people are using the Internet -- on issues like, you know, liquor license applications and so forth. People are better informed than ever.

I mean, I have a friend who started out at a -- and we talked about this a little bit the other day -- he started out at a small California paper, and he just spent weeks going through old receipts from council members and so forth and uncovered a fairly major corruption scandal in a small town in California. That kind of thing is very hard to substitute for with crowd sourcing, because no one wants to go sit and spend an hour sorting through those receipts.

How are we going to substitute for that kind of reporting if the pay model on many of those sides is going away?

SCHAFFER: Well, I actually don't think that many regional news organizations are doing that much enterprise journalism. They haven't been for a while. They'll do, you know, if you're lucky, a half-dozen enterprise stories a year, but usually not that many. They've been decimated.

And I think that we're -- you see the juice of these stories is actually coming from other places in their communities. Maybe it's a start-up watchdog site for the state. Maybe it's an individual freelancer.

I'm about to come out with a report for something we call the Enterprise Reporting Awards that the William Penn Foundation funded in Philadelphia. This is what I call a "cheap date" kind of initiative, in which we issued $5,000 grants for a one-off reporting project.

The only hook was, you had to collaborate with one other media entity in your community for a broader distribution so that everything would not be so siloed. We ended up funding -- we had initial funding for 10 projects. It was a competitive process. The ideas that came in were so good, we funded 14.

This $70,000 generated 300 -- in 10 months -- 300 enterprise stories on major issues. I mean, we had tax-delinquent properties in Philadelphia, that are 20 percent of the properties in the city, that weren't paying taxes. We have the top 10 drug corners in Philadelphia. We had school district coverage that brought down the school superintendent in Philadelphia.

I mean -- and these weren't all what I would call low-hanging-fruit stories. These are stories that reporters in the community knew needed to be done, but so many in the metropolitan newsrooms are just running like chickens with their heads cut off trying to patch the holes here and there that they're not focusing on them.

So the impact of a $5,000 award leveraged many other $5,000 awards and ended up getting stories done that needed to be done.

So it's another way of thinking. Is that going to solve the problem across the board? No. But, I mean, I think that there are -- there are stories being done and there are ways to incentivize these stories to be done.

ROSENSTIEL: Let me -- I agree with Jan that the press as it was constituted and structured and the way the advertising model worked didn't do a lot of real hyper-local work that was -- I mean, much of what is covered in the neighborhoods where people live goes uncovered. It's too small for The Washington Post to cover my town. So some of this new reconstituting of the ecosystem is correcting for that, and it's creating journalism from the bottom up and where people live as opposed to where ad sales arrangements sort of are constituted. And a lot of it, because it's not making money, has very much of a public-service spirit to it, which is nice.

I don't think -- two other points I want to make. I don't think that this is all about investigative reporting. That's what people love to talk about, as if it's, you know, that's what makes --

MS. : (Inaudible.)

ROSENSTIEL: Right -- that's what makes democracy work and all that. The reality is, traditional media at its most profitable never did an enormous amount of investigative reporting. I care about something that I call witness-bearing reporting, which is simply having a reporter show up at the zoning commission every other week, and the people who are on the zoning commission know that that cretin with the bad khakis and the stain on his jacket who is -- really irritates them, he works for the stupid newspaper. And they behave better because they know he's there.

There is a -- there is a salutary effect to reporters just showing up that is very hard to measure. But when they don't, more bad things will happen. And that's not investigative reporting, but it probably has, cumulatively, more of a positive effect than all the investigative reporting.

And the one other point I would like to make is about scale. If you just take newspapers -- there are 1,400 newspapers in the United States, most of them quite small -- they have lost, by our estimates, $1.6 billion in reporting resources, just in the news room, in the last 10 years. There isn't $1.6 billion of philanthropy or, you know, alternative money or nonprofit money to compensate. So while there's money coming into the system, it's not coming close -- not even close -- to what's being lost in the commercial system. And this is just money in the news room we're talking about.

Now, was some of that money misspent on stories that nobody needed to read? Probably. But for all the innovation that's exciting, if you look at this in aggregate, it's a smaller reportorial culture.

SCHAFFER: We don't know how much of that 1.6 billion (dollars) has been replaced. I mean, certainly, J-Lab has started to quantify some of the foundation dollars, and we came up with 300 million (dollars) over a five-year period. And that hasn't been updated yet.


SCHAFFER: And I think we're probably close to 500 million (dollars) now.

ROSENSTIEL: That's true, but it's 1.6 billion (dollars) a year that's being lost on the commercial side.

SCHAFFER: But you -- nobody has ever quantified what the ad sales are of any of the other news entrepreneurial initiatives that have come up. Nobody has quantified that number.

ROSENSTIEL: I will bet you $500 million it's not $500 million a year. (Laughter.)

SCHAFFER: Are you going to talk about Huffington Post? Are you going to talk about Talking Points Memo? Are you going to talk about -- I mean, what are you going to -- what are you going to count, and what are you not going to count?

ROSENSTIEL: You can count them all.

SCHAFFER: We could not have that --

ROSENSTIEL: Jan, you can count them all. You can count -- you can throw all those in there.


ROSENSTIEL: You can throw in the whole $30 million that Huffington Post makes a year -- all $30 million.

SCHAFFER: But even if you're in 1.6 --

ROSENSTIEL: Which, by the way, is one-tenth of the classified advertisement that the L.A. Times had in 2000.

SCHAFFER: All right, but, you know, the L.A. Times readers weren't reading it, all right? So you have a -- I think, a real dilemma right now with news organizations, where the standard news organizations that I grew up in can't figure out what their portfolio should be, all right? And they still want it to be everything to everybody, and they don't have the staff to support that. But they're not brave enough to say: You know what, right now what we're doing is -- if you're a metro -- say you're a sizeable metro daily. What do you cover?

You're not doing national and international any more; you're running AP. You're not doing hyper-local any more, because you don't have the feet on the street. You're covering sports. Well, how many other places can you get sports? And you're covering city hall -- for a readership that lives in your suburbs. OK? Your portfolio is really out of alignment in terms of where your readership base would be.

But no one has yet had the courage to do what some of these statewide news startups are doing, and say: We are only going to cover these six things, and we are going to own these six things, whatever it is. Maybe it's politics, maybe it's education, maybe it's the environment, maybe it's economic revitalization, maybe it's my creative technology community. We are going to link to the rest, but we're not going to do movie reviews, because other people are doing those in our community. We're not going to do food reviews, because other people are doing them in our community. And we're not going to do sports -- or maybe we'll create a sports blog network to give you the sports coverage that we need. But these six things are going to be so valuable that you might be willing to pay for it.

MCARDLE: Well, let me ask you about this. I mean, there's the sort of decline of "take your medicine" journalism in some ways, right? We used to think that the most prestigious thing to do was be a national correspondent, or to be a foreign correspondent, right? That -- so you spent your whole life at a newspaper working you way up to that or the op-ed page. And then, when we started disaggregating the revenue, it turned out no one wanted to read that; they all wanted to read about Britney Spears and the sports scores. And, you know, so that in fact what -- the prestige line in journalism was the opposite of what was actually popular on the Internet in a lot of ways.

But here's the problem with that, is that people actually do need to know those things. Does it matter that we're -- that we've de aggregated this so much that you can go through your entire life without ever reading even three lines on an international story and that all of the foreign bureaus have been disbanded and that, you know, the local bureaus, the people who used to be in New York, are no longer there, or D.C., that, you know, almost no one now has a correspondent in D.C. from the regional papers? Does that matter? Or is it, you know --

SCHAFFER: Well, Tom had an interesting study recently -- that I found interesting because of -- for local news in particular -- how much word of mouth accounts for how people find out about news in their communities. And I do think that news, contrary to being a sort of take your medicine exercise, is actually a connective tissue exercise. It connects people in communities. It gives them something to talk about. It binds the communities in various ways; in binds the nation in various ways if someone kind of creates a kind of coverage that sort of focuses on what the master narrative of the country is, should be and what's the departure from that. So I guess it's a different kind of mindset in terms of what's the mission that you're trying to fill with your journalism. And is it -- is it a commodity and are you selling it, or is it a mission that does something else? And I'm not sure right now that a lot of the traditional news organizations aren't really more focused on making it a commodity.

MCARDLE: Mr. Rosenstiel, I'd actually like to particularly ask about international, because we're here at the Council on Foreign Relations: Is the quality of international coverage going down in the United States as all of these foreign bureaus have been pulled back or cancelled? You know, do we know less about the world than we used to?

ROSENSTIEL: I think you need to be precise in the way you try and think about this. Let's go back a little further. If you go back to the 1980s, the networks had about 15 bureaus each, CNN was coming on and built up to about 30 foreign bureaus. You had back then four papers -- The LA Times, The Journal, The New York Times and The Washington Post -- that all had full complements of foreign staffs, which was then about 30 bureaus, maybe 25 to 30 bureaus. And then you had regional papers like Philadelphia and Baltimore that had a handful; through the chain they might actually get up to about 16 or 17 bureaus each by company.

And they covered essentially who had guns pointed at us and who did we have guns pointed at. With the fall of the -- Eastern Europe, our definition of what foreign news should be was sent into turmoil. We didn't really know -- what do we cover if not everybody's pointing guns at us? It's a -- it was -- it's a much more complicated narrative. Should we be writing about the health care system in Sweden and whether it's a model for our health care system? Is that foreign reporting, or is that health reporting? So one of the things that happened was that we started producing foreign reporting. And it was expensive as economic problems began to first raise their head, particularly in television, which is where they occurred first, and there was a pullback.

Now that -- now that ecosystem is very small. You have -- CNN has 30 bureaus. The New York Times has a full complement of bureaus; The Washington Post has a full complement of bureaus; Reuters, the BBC, Wall Street Journal. The LA Times has many fewer, and the regional papers like the Philly Inquirer and the Baltimore Sun, they're gone; they're out of that business.

What's available to the audience is very different. Two of the 12 most -- two of the twenty most popular websites in the United States from U.S. traffic are The Guardian and the BBC. If I want to read about Africa, I can do that in African languages or in English in ways that I couldn't before. The likelihood that a story is going to be on the network news that 25 million Americans would see on a Tuesday night that was reported from that country from a reporter who lives in that country is very small, probably almost nonexistent. But if I want to find out about these things, I have access to it.

And I think -- I think what we're really looking at is not a world of who's wired and who's not, who's technically connected and who's not, but it's actually a world in which your news literacy skills define what happened, what you know and where you go, so that you have the have -- you have the sort of the globally literate, who both have the means and the skills to find these things, but the -- what we call in social science media research world "incidental news acquisition," where you find out things that are important that you didn't know you were looking for or that you would care about, that is dropping -- not disappearing, but dropping quite a bit, and about the world, dropping very much. So we can have a war. We can have two wars. We can conduct two wars, and Americans both don't know about them and don't care about them.

MCARDLE: Any closing thoughts before we open up for Q&A?

SCHAFFER: You know, we did a -- four focus groups a couple of years ago for a project I run. It's for women entrepreneurs. And we asked women news consumers where they got their news. What was fascinating to all of us there is that not one of them mentioned one of the standard broadcast news outlets, but the BBC came up over and over and over again. And now, mind you, these were focus groups of everything from home health care aides to teachers, OK? And it was stunning to us that people were this aware.

But I think media literacy is going to become an emerging issue because media is so available and the ability to create media is so easy that we are starting to see news things -- or that -- or things that masquerade as news, but they really aren't news. They're opposition research. They're political partisanship. I think it takes a very high consumer savviness to really understand that what this is isn't news at all, it's some kind of campaigning.

MCARDLE: So we're now going to invite the audience to participate. I'm -- before -- please wait for the microphone and then stand up and state your name and your affiliation when you get it. So start with you in the second row.

QUESTIONER: Thanks. Hi, I'm Jim Mann at Johns Hopkins SAIS and a recovered newspaper reporter.

ROSENSTIEL: You've actually fully recovered?

QUESTIONER: Not entirely. (Chuckles.) Just to follow up on foreign news, on the one hand, there are reporting assets that you didn't have before, which is cellphones and social media. We used to -- in China, we used to think that -- and this is, you know, in the '80s -- we used to think that if something happened in Beijing, there was probably a 90 percent chance we'd know about it. And it would go down to about 60 percent in Shanghai, and then the rest of the country went down to 10 (percent) or 20 percent. You know, things could happen, we had -- major, and we would not know -- cellphones, social media.

On the other hand -- and I want to focus on the networks, for example, because you fairly credit the newspapers with maintaining their coverage. But I can -- could illustrate this with -- last week I watched on BBC or the news hour the events of the day, which was either -- it was either a day that Papandreou was announcing a referendum or backing down. (Laughter.) And I wondered how -- what was on the network news. And I took a look, and I tried two networks, and the lead story was Michael Jackson's doctor is about to go on trial.

And here's a story -- and I think this pinpoints the -- what doesn't get covered, because if there were pictures, it would get covered. But this is a story, the economy, that can affect whether there are layoffs, people's 401(k)s. And it's news. It's not -- we always think there's not enough analysis, but this is news.

And the circularity is that if people don't know the personalities involved, it seems less accessible. But it wouldn't take much to turn someone like Papandreou into a personality that everybody -- is George going to do this; is George not. It seems remote, but not necessarily. And it's hard to imagine the networks of the Cronkite era not covering something like this. So let's -- I'd like to focus on network news and whether -- you know, is there a good side you can see? Because I can't.

ROSENSTIEL: Well, I talk to those guys. We chronicle those changes every year in the annual report. And what they would say is: You know, actually those tools you're talking about, we got them too. We don't need to be in all those places to get that video. We have eyes and ears. We can -- you know, you can see -- we can get video from Athens, local video, that would be better and from more places than we could ever have shot in the old days with our film that we shipped to New York, da-da-da-da-da-da. And so we don't -- yeah, we don't have a bureau there anymore, but we've got a bureau in London and it's got all these satellite dishes on it, everything's pouring in there, we're monitoring the world, and we had to do that because one foreign bureau is very expensive.

They will contend that they each have about 15 foreign bureaus. What they really have are 15 offices with a producer who can monitor events, not the same thing as a correspondent in the old model, but they will argue that that model is modern and works and gives them more footprint than they had five, six years ago when they were down to about six bureaus and they were trying some version of an older approach, many people in a bureau but in fewer places.

I would add one other thing, and that is that 80 years of media research in the 20th century basically learned one thing, which is that the media don't tell people what to think but they do tell them what to think about, so if it's not covered in these widespread places, Americans won't care. You do need to make Papandreou a character, or (Sarkozy ?), although he had a good character moment the other day when he was overheard saying something human about Netanyahu.

But -- and this is also a cultural problem in the U.S. that the press historically always reflects, which is we would like to just sort of close -- you know, from George Washington on, we'd like to kind of forget about the rest of the world, stick to our knitting and not -- and not be a superpower, and not know about them. And the press has a tension between thinking, well, we need to educate our fellow citizens and we need to tell them what they want to hear, because that's how we aggregate revenue.

SCHAFFER: You know, I also think that the complexity of the world is such right now that it's very difficult to explain -- to do the kinds of explanatory journalism that make it really clear why Greece or why Italy caused the stock market to tumble, you know, today or overnight, or why so fast. And even where those explanatory stories occur, they're usually occurring in the more elite publications that, frankly, the rest of the country is not reading. So they're not accessing --

QUESTIONER: (Off mic) -- circularity in that, though; people are interested because --(off mic)?

SCHAFFER: Right. Well, I mean, it's the election of the -- certainly the TV stations to cover -- all cover the same thing. It's a lot of very duplicative "me too" news. And there's arguably no value-add there. If there were a network that could carve out a value-added portfolio, it would be fascinating -- much like a BBC, perhaps, model -- would be fascinating to see what kind of noise they would break through.

ROSENSTIEL: I would differ with that in one regard, and that is that the way that the media system worked at the end of the 20th century was that stories would start in one media, you know, area, and they would be more widely distributed through others. Locally, you know, a good deal -- and we've done local studies that show this -- that a good deal of what appears on local television started in the local newspaper.

When network news came in in the 1960s, '63, went from 15 minutes to a half an hour, what happened was things that were in The New York Times, that Americans didn't see because they didn't read The New York Times, suddenly that same sort of very serious sensibility was made more populist. And there are studies that show that the so-called incidental news acquisition, people discovering things they didn't know about, went way up because on television you had to watch through the whole show. You couldn't flip like you could in a newspaper and skip things.

You know, it's not that way anymore. It's not going to be that way anymore. But there was that moment where, in a sense, the -- you know, the elites were lecturing to the populace much more than they -- than they had before, through these three channels that were -- that were every bit as serious -- in fact, aspired to have the sensibility of The New York Times on television.

MCARDLE: Other questions? There in the back.

QUESTIONER: Hi. I'm Marilyn Geewax with NPR. And I just wanted to stand up for audio news for a bit. We've talked a lot about the press and print and newspapers. And I spent a hundred years working for newspapers; I started covering the War of 1812.

ROSENSTIEL: You look really good. (Laughter.)

QUESTIONER: (Laughs.) Thank you. But after 30 years with newspapers, the -- my bureau was closed down here in Washington -- I worked for Cox Newspapers -- and I had to reinvent myself as a radio journalist.

And every day for three years, my jaw has been touching the ground at NPR, to see the reach that audio news has these days because of podcasts and the way young people process news. I mean, they're very accustomed to listening to things through earbuds. And when we do our podcasts at, like, a "Planet Money," I mean, we have 300,000 people download that podcast every week. We have 33 million listeners every week hear some part of an NPR news show. So what we're finding is that audio news fits how people actually live. You don't have time -- or people perceive that they don't have time -- to sit down and read the paper when they get home from work, but they are stuck in traffic -- our captive audience -- and as long as our infrastructure is bad, we've got millions of people trapped, listening to us. And so -- you know, and I think the infrastructure will stay bad a long time, so we've got -- (chuckles) -- we've got lots of people in the morning, lots of people in the evening. And we've got 17 foreign bureaus with real reporters, not producers but, I mean, actual seasoned journalists working all around the world.

And now we've started this new thing. It's called "StateImpact," where they rounded up foundation money, and we're putting two reporters in each state house -- I mean, that's the goal, ultimately, to have it fully staffed, is two reporters for each state house providing free news to people in the ways that they listen. You know, we reached them where they are -- in their cars, while they're cooking, while you're eating your Cheerios.

So I just want to say that, yes, I -- you know, as a former newspaper person who's heartbroken to see so many people from, you know, my era in school forced out of the industry, I also see people like me flourishing in audio news in ways that we never envisioned, and that's a really exciting part of what's happening with journalism. It doesn't replace all the regional newspapers. But like one regional reporter from the Baltimore Sun, Frank Langfitt, is now in Shanghai for us. So there are regional reporters -- David Green is in Moscow -- you know, that turned into foreign correspondents for NPR. So anyway -- (inaudible).

MCARDLE: Can radio save the -- (inaudible)?

ROSENSTIEL: NPR has -- some news outlets have seen their audience grow. The New York Times audience has grown. NPR has seen its audience double in the last 10 or 12 years. You're the beneficiary of two particularly big factors. One is longer commute times; the other is the abandonment of radio news on the commercial side. There are only 30 all-news commercial radio stations left in the United States. So if you're in your car and you don't live in a big city like Denver, or D.C., where the all-news station is actually the number-one rated station in the market, if you want news, NPR is your choice. So you've benefited from becoming a near monopoly or a monopoly in many markets, and you've exploited that by making the product better, and by believing in, you know, the mission that good journalism will draw a loyal crowd over time.

There is a threat down the road, which is that five car manufacturers this year installed Pandora and Internet technology in their cars. And now those are in -- you had to buy a new car in the last few months to have it, but in five years, we're all going to -- you know, a lot of us will have Pandora technology or Internet technology in our -- in our cars.

And suddenly you could say, you know, I just want to listen to George Benson; I hit the George Benson channel. We don't know what's going to happen with that. That's a change that could be significant, or it could be, you know what? I'm so sick of George Benson; I want to hear Sylvia Poggioli.

SCHAFFER: You know, and I think hats off to NPR, because I think you're doing a great job of coverage. But I also think that unique to your coverage is that you zig -- or you zag where others are zigging. I mean, you really offer a different take on a lot of what's happening, or look at it through a different lens. And that makes a difference, too, in terms of a value add.

MCARDLE: Other -- over on this side.

QUESTIONER: Hi. My name is Aarti Shahani, also from NPR, so sorry about that -- not sorry to be there, sorry to -- (laughter) -- take up the space. Hi.

So I want to invert the question a bit about the future of news. I appreciate the points about low-hanging fruit, about witness-bearing reporting -- I love that term -- but I -- when I think about the health of an industry, you could think about it in terms of the output, the product, right, like what are the stories that are being produced. Or you can also think in terms of the leadership.

And I guess I was wondering if you could talk a little bit -- like I am at the entry level. I'm actually doing a fellowship at NPR. And I sometimes wonder: Is this -- what is this thing? Like, where does this fit into the growth of the organization? Like these -- you know, through bizarre positions that are carved out for -- I'm not exactly sure what the organizational goals are at the end of the day. But it does make me think about in the news industry, you know, what are your thoughts about where is real leadership development needed? Where is there a dearth of it? Where is there an oversupply of it in specific organizations?

SCHAFFER: I'm actually working at American University with the Kogod School of Business to develop a master's degree in media entrepreneurship. This is on a fast track to launch next September. And it is actually designed to help mid-career professionals both develop (interpreneurial ?) and entrepreneurial projects in media -- not always journalism. But there is -- I think that, like the Council on Foreign Relations, there are many information-rich advocacy groups, nongovernmental groups, that are providing stuff that has a lot of journalism DNA. And our aspiration here is to try to do some skills building and actually some true prototyping and wire-framing of projects that they might like to launch. And it will be an alternate Saturday and one weekend -- one week night, 20-month program. So it's really designed for professionals. So, I mean, I'm not sure that -- you know, we may need to grow a new set of leaders, is part of the problem.

ROSENSTIEL: And I think that's moving in the right direction. Look, the crisis facing American journalism, and by proxy -- the only reason we care about journalism is the crisis facing civil discourse in democracies -- is a revenue crisis, not an audience crisis. Old media are holding on, and in many cases even growing their audience. The problem is that the digital platform is not proving to be an effective way of delivering advertising, for three reasons.

One, many advertisers don't need the press to deliver their message. Over 70 percent of the classified advertising in newspapers in the year 2000 is gone -- it's gone, just vanished; it's no longer venue to anybody in journalism -- a lot of it to Craigslist, where it became free; but to and and other places that don't subsidize journalism. That's problem number one.

Problem number two is the way we interact with information digitally is what scholars are beginning to call a "lean forward" experience, where you're looking for the answers to your questions through search and other means. And when you find the content you're looking for, the kinds of ads that are associated with news -- which is display advertising and pop-up advertising -- is not complementary to this "lean forward" experience. It's contradictory. What's the first thing you do when you see the pop-up ad? You don't say: Oh, I love the ads! You close it.

Old media is what scholars call a "lean back" experience. You read the newspaper and you go: Oh, here's a story about Herman Cain. And then there is, at the 87th woman: Oh, here's an ad for a trip to Bermuda; that looks nice, it's really cold out. You know, the research is very clear. People like the ads on television and on -- in newspapers and in print and in magazines. Heck, in the magazines my teenage daughter reads, I don't know what's the editorial and what's the ads. It's a kind of a seamless set of photos. That's not true online.

So The New York Times probably has more than half -- maybe close to two-thirds of its audience is digital. It makes somewhere between 10 (percent) and 15 percent of its revenue there. The Web has turned out to be, for a variety of reasons, not a particularly good way of delivering advertising.

The other problem is scarcity. There's no scarcity of websites, so you can't change -- charge 80,000 bucks, like you can for a full-page ad in the newspaper. The solution -- what the news industry needs is people who can invent a new economic model, which means that they need engineers and businesspeople, not storytellers and guys with low golf handicaps, which is what dominated the industry on the news and then on the business side in my generation.

SCHAFFER: If you get to that economic model, you have to have a value-added product to sell. So --

ROSENSTIEL: Which they -- which, for all of its flaws, the market shows they still have. They're still holding that audience. But the hourglass sand is running out as they cheapen that audience -- as they cheapen that product through cuts.

MCARDLE: I think we have time for -- this is our -- going to be our last question. Just reminding everyone that this has been on the record. And you in the back.

QUESTIONER: Hi, Joe Penning (sp) with Open Revolution. As more and more people get involved in the provision of --

ROSENSTIEL: Oh, did you guys start all this, Open Revolution? It sounds like you're the cause of all of that.

QUESTIONER: We do peaceful revolutions, financial revolutions.


QUESTIONER: As more and more people get involved in the provision of news, is there some role for professional organizations for journalists? This was something introduced at the advent of mass media with Walter Lippmann, among others, that began in the 20th century. It's never happened. You can go to prison for saying something about a stock. You can help start a war, and nobody cares. As more and more people get involved in media, do we need to have some association to increase the level of ethics that they're held to as they participate in that activity?

SCHAFFER: I just came out with an ethics book on some of the new ethics that are emerging in the startup space. And actually -- (chuckles) -- to our viewpoint, some of the ethics are stronger than some of the ethics employed by traditional journalists. If you own your own media organization, you care a lot about whether your readers trust you or not, and you behave accordingly, and there's a little less arrogance. But I don't know. I mean, I just think that there's so much work to be done that to have another organization putting a stamp of approval on a journalist or not is not where I would put my efforts. But --

ROSENSTIEL: Well, one of my books is called "The Elements of Journalism," which is basically what are the core values of journalism. It's -- it wasn't intended as an ethics book, but it's often taught that way.

But we now have conflicting norms of journalism even within one company. You know, MSNBC -- NBC produces NBC news, MSNBC, which is very different, and, which produces the websites for both and doesn't know which set of norms to follow. You know, Fox does one thing on cable and then something else on local. The idea that you could pin down norms and say this is journalism and this is not, which was pretty hard to do when Jan was poking around in civic journalism in the '90s -- well, you'll have even less luck in this -- in this century and this decade.

SCHAFFER: And sometimes it's very situational. I mean, you do what feels like you need to do in the moment. Whether it's the right thing to do in the moment is hard to codify.

ROSENSTIEL: Now, I would say one other thing that is more potentially optimistic. The ethics of journalism, which reached their peak in the last part of the 20th century -- they didn't come from philosophers or Planet Journalism out in the -- outer space. They came from the street, what worked and what didn't. And they became codified by journalists who said, you know, people are going to trust us more if we do this. If we stop taking freebies, if we stop writing speeches for politicians on the sly, if we stop being in people's pockets, we can actually make more money. What's happening right now is that they're not making money -- (chuckles) -- so they're -- they've let their -- you know, there's more of a tendency to sort of let things slide.

You see it in local TV. You can buy stories now in local TV or -- in different places around the country, something you couldn't have done a few years ago. This is what I'm told by news directors. That's because of the pressures that they're feeling on the financial side.

SCHAFFER: Yeah, the rise of sponsored content is a brand-new phenomenon that's different from advertising, but it's happening all over in the news (biz ?).

MCARDLE: It looks like I completely lied, by the way, and we have time for one more question -- (laughter) -- so over here in the purple sweater.

QUESTIONER: Thank you. Hi, Jill Dougherty from CNN. You know, I know we don't have a lot of time, but I'll try to keep this brief. But I'm very intrigued by where we're going and the new media. And a lot of my friends -- even though I work in TV, a lot of my friends don't have TVs. They don't watch TV. And yet they seem very informed. And I wanted to return to something --

ROSENSTIEL: How is that possible? (Laughter.)

QUESTIONER: It's absolutely -- it's shocking, but I suppose they're watching -- (inaudible).

(Cross talk.)

(Laughs.) But they're on the web.

And Tom, you were talking about the new media as being discursive and distributive, but not reportorial.

Now, just before this began, I was having a conversation with someone who was talking about being -- having people in the field who are not journalists, who were reporting back to her organization on the ground what was happening even faster than her people could. So I'm just wondering whether that really is correct, that if we're not getting -- we're so early into this that maybe we don't see what's happening.

But it just seems to me that there is a lot of information out there that's getting in very, very quickly into the system. It's -- maybe it's not, you know, a journalist with credentials, but it's somebody who knows something about what's going on the ground. And we use it at CNN. It gets vetted. But it feels to me that, you know, the whole model has shifted, that the information now is coming from the bottom, not from the top, and that we're in a for a very different world. And I just wanted to get your quick thoughts about that from both of you. Thank you.

SCHAFFER: I would call it informational but not reportorial. And it still needs to be authenticated, validated, whatever. But --

ROSENSTIEL: Yeah, and I would agree. I mean think, we're -- you're right. We're new into it. It's, you know, the 1920s in radio still, in a sense.

I think the idea that everybody is a journalist and we don't need professionals -- which you actually heard people say a few years ago -- is not true. So what you're talking about is a sophisticated form of what -- in England they call it mutualism with the audience. We -- that's too many syllables for us in America. We call it crowd sourcing. It has different names. It's where you use people on the ground.

But, you know, I also think even a decade into it, we're discovering that the people we're trying to follow who are making the news are at it 18 hours a day. You can't -- you can't adequately cover them 45 minutes a day during your lunch break and call yourself a journalist. You just won't have the skills and you won't have the information.

So you know, you have -- I mean, the most popular destination for news in the United States online is Yahoo! News. It's an aggregator. It's trying to become a news organization as well, but I would say that the -- the essence of its appeal is that it's using human beings to call the best of the web and let you tailor it. I don't think that, you know, their sort of version of AP stories that they are doing are the source of their -- so it -- while you can find lots of examples where new media is doing reporting, I think fundamentally its character and its strength still is this.

And you know, the bulk of what we're learning -- what we're learning and having contextualized is coming from organizations that have those skills. Yahoo! is moving into that area. AOL, which has tried off and on, is moving into that area with Arianna Huffington. How that will play out over time I think a lot of us aren't sure.

There will be a melding. But it's interesting that that melding has not yet occurred. I mean, people thought, oh, well, Google, they can -- they could buy The New York Times. But they don't want to. They're fundamentally an engineering company, an engineering/advertising company. And we have not seen yet any real melding of a news culture organization and an engineering culture organization that you could call a serious news operation at this point.

Yahoo!, by the way -- number-one destination; I think they do a spectacular job of aggregating. They're building reporters; they're getting some good ones.

QUESTIONER: (Off mic) -- ABC.

ROSENSTIEL: But they don't make any money at it, because their market share isn't huge enough. And that's -- you know, so behind all of this is that fundamental thing. You can do it, and you can do it for a while, and you can exhaust yourself. But if there is real revenue behind it, you don't -- you may not have the resources to sustain this.

And you're not -- everything you're going to do is perfect. If half the stories that run in the newspaper were a waste, then you need a lot of revenue to write all those bad stories along with the good ones.

MCARDLE: Any last thoughts before we close?

SCHAFFER: No, I think it's actually a very exciting time. It's just a very different time than what many of us are used to. And it's changing so fast that we almost never know what the next thing is going to be, whether it's a tool, a technology, a new startup. And I think we are going to see, though -- we are going to see regional (metro ?) dailies probably go out of business, or at least go digital-only, in not too distant future.

ROSENSTIEL: I'll make a slight prediction on top of that. First thing you'll see -- and it'll happen in more old-fashioned areas, like Michigan, first -- they don't print during the week, and they print on Sunday. You'll see the Sunday newspaper as a print entity last for a very long time. It will almost not be a newspaper.

MCARDLE: It'll be a magazine.

SCHAFFER: Magazine, yeah.

ROSENSTIEL: It'll be essentially a kind of news magazine that comes in your house and has got a whole lot of coupons in it. Newspapers make 50 percent, on average -- 50 percent of their revenue on Sunday.

MCARDLE: Well, with that happy thought, I will close, and thank both of our impressive panelists. (Applause.)






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