Don't follow the money — get ahead of it

So far, this blog has focused largely on issues around the practice of journalism.

But thinking over the evolution of the craft alone is hardly the only – or even the biggest – question facing journalists these days, be they traditional, Fourth Estate practitioners or entrepreneurial Fifth Estate ones.

There’s that nasty little question of how to pay for it.

Most reporters learn early in their career that famous admonition Deep Throat gave to Washington Post reporter Bob Woodward: Follow the money. But when it comes to finding ways to fund journalism, following the money just won't work any more. We have to get ahead of the money.

The past couple of weeks have brought news on the advertising front, and it paints the picture of where advertising is going as it bounces back from the global recession – and it is largely not into the buckets where it once so effortlessly dropped.

PricewaterhouseCoopers delivered its annual Global Entertainment and Media Outlook, one of the most comprehensive studies of the changing state of media. It brings the not-so-surprising news that online advertising will surpass newspaper advertising as the second biggest ad category in the United States by 2014 (television still ranks first).

If the first quarter numbers from this year are any indication, it looks like newspapers will be passed at a gallop, as online and mobile advertising grows to dominance while traditional print media continues its decline. Alan Mutter reported at his blog that while ad spending was up on the Internet by 7.5 percent during the first quarter, newspaper advertising declined a dismal 9.7 percent year over year – numbers that are even more grim when you consider how bad the figures were during the last two years.

Those of us who were working in traditional newsrooms during that last grim two years have been engaged in a debate about whether what was happening to newspaper advertising was cyclical (part of the natural decline caused by overall bad economic conditions) or secular (a change in the basic assumptions about how advertising works).

News like this pretty much ends that debate. We’re in the midst of a secular change that challenges everything we thought we knew about how to pay for journalism.

The PricewaterhouseCoopers report also raises interesting thoughts about how the very fractured online world will continue to evolve. As outlined in a post at the website Social Times, PwC sees three themes that will evolve from changes in consumer behavior:

The rising power of mobility and devices

The growing dominance of the Internet experience over all content consumption

Increasing engagement and readiness to pay for content — driven by improved consumption experiences and convenience

Just thinking about those three themes alone gives us lots of fodder for considering not just how 4th and 5th Estate journalists should engage with audiences, but also how they might get paid to do it. Instead of looking to the past, to the old buckets for ad revenue, we'd better focus on those three themes -- mobility, Internet dominance in all content areas and improving user experience -- as places where we might get ahead of the money.

So why should we be thinking about that here at Patterson? Because we are committed to the idea that for journalism to succeed in the long term, it has to find a way to pay for itself. Foundations such as Patterson can play an important role in boosting innovation in journalism – around craft and around emerging business models as well. But that is just rocket fuel, to help boost smart ideas into existence.

For journalism to work, it has to prove its value to the community it serves, and proving that value means attracting business revenue – whether through advertising, subscription, or underwriting by an audience committed to the coverage your provide. Likely, it will be a combination of all those things, and more.

As we watch the intersection of philanthropy with journalism during this critical moment, it is clear there is a valuable role to be played in bringing momentum to all kinds of innovation. So often in the six months that I have been working on the New Media Journalism Initiative, I have heard smart and committed journalists of all stripes say that they just didn’t have a clue about a business model for their ideas. It is clear in many of those cases that they are depending on contributions, foundations and the possibility of having old media contribute in some way as their wishful-thinking business plan.

This telethon model of sustaining journalism has exhaustion built right into it from the start. At Patterson, as we think about how we can provide momentum to innovation, the sustainability question is always on our minds. We want to enable not just innovation in the craft, but innovation in smart business models as well.