Katherine Viner, editor in chief of The Guardian, wrote an essay about the impact of technology on the media. That’s the summary; the long description is “how social media and the web destroyed traditional news (newspapers, TV news, etc.)”.

It’s a very good essay and if you care about journalism,  the news, the truth, and so on, it’s worth reading. Here is a summary and my comments.

But there’s more to this. First, let me write about my experience in reading and writing:

  • I grew up in a home where we always subscribed to a newspaper. In high school and throughout college, I subscribed to the New York Time. In graduate school, more newspapers and I subscribed up to the early 2000s. But somewhere in the mid-2000s, I stopped subscribing and even stopped reading paper-printed newspapers. I had switched to the web for news.
  • I still subscribe to stuff on paper: The New York Review of Books, The New Yorker, The London Review of Books, and Le Monde Diplomatique. I read one or two paper-based books weekly; I read another two ebooks via Amazon Kindle every week. (Yes, I read a lot.)
  • I also write. Some of you know that I’ve written twelve books. I wrote my first book in the late 80s, when book printing was done with heavy plastic sheets in printers as large as a train locomotive. For many years, I worked in technical writing both as a writer and a manager; we produced well over a hundred printed books in several hundred thousand copies. In the last few years, I’ve switched to Amazon publishing and have written three books for distribution via Amazon, both in print and as ebooks. I’ve also released a number of ebooks as PDFs at my website.

So Katherine Viner’s essay is important for me. She discusses the impact of the web on traditional media and I’ve lived and worked in this.

Katherine argues  newspapers are challenged by the web. The web allows far too much junk media (Gawker, etc.) and worse yet, most of the media on the web is based on clicks. Quite simply: the more clicks, the more ad revenue. So… that leads to click bait, which is junk content to get clicks.

That works… for a while. But clickbait kills itself. Because the number of clickbait sites and articles grows while the number of readers stays the same. Clickbait factories hire tens of thousands of writers (and some already use AI tools to generate clickbait). Since clickbait factories can make money, more people open up new clickbait factories. But remember, the number of readers doesn’t increase, so each clickbait factory’s share of readers will drop. See? When their share is smaller, each factory earns less, which makes them desperate to earn more (to pay salaries, rent, pizza, etc.), so they write yet crazier junk… until the big ones collapse and the little guys give up.

This isn’t theory. It’s reality. Because I lived through this. This was what happened in the 1995-2000 Dotcom Boom. At first, there were a lot of startups. Yahoo! hired Los Angeles media people, who immediately pivoted Yahoo! from a search site into a media company, which meant it made money via advertising. Others started media sites to make money with ads. That was fine in 1997. A company could make $25-45 CPM (revenue per thousand impressions). (They used impressions, not clicks, because the LA and NYC media people came from TV, where they measure the number of viewers). By 1999, there were thousands of sites. CPMs began to fall from $25 to $20 to $10… and by late 1999, CPMs were down to ten cents. Bad news for the media sites that started with $25 CPMs; they had big offices in big cities, big salaries, lots of staff, etc. Media sites could start with six people and within a year, explode to 500 staff. $25 CPMs could pay for that, but not $0.10 CPMs. So the dive accelerated until they all cratered in 2000. End of the dotcom boom. (That’s why we called it the Dotcom Boom. In the end, it went “boom!”.)

Okay, there were other factors that led to the crash, such as massive stock fraud, investor fraud, and so on. The crash in CPMs was one of the main issues.

This is happening all over again in social media. There are perhaps 5,000 social media sites in Silicon Valley (and easily more around the world) and practically every one of these is based on making money on number of impressions. Twitter, Snapchat, Periscope, Masquerade, etc. have sky-high valuations which are calculated with the VC formula Number of Users multiplied by the Value per User (VPU) = Valuation. So plug in your numbers: 100 million users X $10 VPU (which is an invented value) = … whoa! ONE BILLION DOLLARS! Unicorn club! Whoohoo! Order that cherry red Ferrari!

And you, my dear reader, can see this is totally fake. That site isn’t worth a billion dollars. What’s its real value? It’s losing $10 million per month. So what’s it really worth? Zero. Because there’s no such thing as negative ten million dollars. If a VC insists that is value, go ahead and see how many coffees you can buy at Starbucks with negative ten million dollars.

That’s the reality of the social web. There’s lots of cat pixs etc., but when the money runs out, it shuts down.

Okay, what about the Traditional News Media? How do the social sites affect the The Guardian, NYT, WSJ, ABC, NBC, CBS, CNN, etc.? I kinda feel sorry for them because they’re in a furious race against social sites that have a massive advantage: The NYT must have a skyscraper in Manhattan, must hire professional journalists, must print a paper-based newspaper… all of which costs tens of millions of dollars every month. Meanwhile, it costs practically nothing to create a social media site. Masquerade, which was sold for $100m, was built by three guys in two weekends. Total production cost was a few pizzas.

Summary so far:

  • Social media has close to zero production and distribution costs; traditional media must spend tens of millions every month to stay open.
  • Social media is based on clicks, but the number of social sites increases while the number of users stays the same.

Okay, some may point out that in the second point, the number of users will increase when Africa and India come online. Oh, yes, indeed it will. And there will be a flurry of activity around that. But that just kicks the ball down the street. The more social sites, the less audience share. Social media is a bubble, just like the dotcom bubble, and social bubble will pop, just like in 2000. It’s only a matter of time.

And yes, there are more factors than what I wrote in the two points, but let’s focus.

So here is my final point,  which Katherine Viner missed in her excellent essay: Traditional journalism was large media companies (radio, TV, print). Those companies produced enough money to hire very good journalists who had the steady salaries and editorial support to do investigative journalism. That was the good part. However… any large company is embedded within its social fabric: it gets ad money because advertisers generally agree with the news site. If the newspaper criticizes the general economic model, it gets no ad revenues.

Proof? Go start a revolutionary Islam0-Marxist newspaper. You’ll sell two subscriptions: one to your suffering mom and the other to the local FBI. And you’ll sell zero advertising. (Okay, partly because if an advertiser thinks of placing an ad, he’ll get visits from the FBI, Homeland Security, IRS, etc. until he gives up.)

Here’s my third point:

  • Traditional media companies agree with their advertisers because they depend on their advertisers for ad revenue.

Again, this isn’t theory. In the mid-2000s, the New York Times spent six months investigating how A Very Large Silicon Valley Company (VLSVC) was using lobbyists to secretly change state law in the US states, one by one, so they wouldn’t pay sales tax. The VLSVC found out about the upcoming series, threatened to shut off advertising, so the NYT came to its senses and shut down the investigation (the NYT will deny this, but the journalist told me the inside story). Journalists can tell you plenty of similar stories, but nobody will put this in print. A newspaper can indeed publish investigations that annoy advertisers but the editors and publishers will consider how many advertisers they can afford to lose versus the awards they’ll earn. (Social sites are also dependant on ad revenue, but in a different way.)

Which opens up a solution: Get rid of advertisers. If a news company isn’t controlled by advertisers, it can do whatever it wants. It can publish real investigative journalism and it will have a loyal audience.

To do this, the news company must cut costs. Sell the landmark building. Move out of the city. Cut all possible costs. Publish on the web (because it’s free). It can still print on paper if its subscribers pay for it. The New Yorker has 200,000 subscribers;  The New York Review of Books has 100,000 subscribers; Le Monde Diplo has 100,000 subscribers; The London Review of Books has 50,000 subscribers. Yes, these are tiny numbers, but along with donations, grants, and its own endowment.  they don’t rely on advertisers and they can publish whatever they want. This is also why these are among the best journals and magazines in the world.

It also means news sites can get rid of clickbait article. The large newspapers often publish junk to attract and entertain readers.

That’s my understanding of the media, both traditional and on the web. I really like Katherine Viner’s essay: she explains clearly why clickbait sites are killing traditional media. But she doesn’t go into the finances of media (both traditional and social), and that’s where I think the real problem lays. Their work is colored by their dependence on revenues.

What about the Truth?

News media want to describe what is really going on. The Truth. With a capital T. In the 60s and 70s, it was widely considered that the NYT investigated and then published a correct and balanced account of events. (I know, some of you disagree, but at the time, the NYT was seen as the newspaper of record.)

Clickbait sites don’t care about the Truth. They just want clicks, right now, to make money. Katherine writes that these sites knowingly publish lies because they see news as entertainment. But what about the Guardian, the NYT, etc.? Do they publish the Truth? Can they publish the Truth?

In July 2016, a person shot and killed five police officers in Dallas, Texas. While the shooting was still happening, we looked at CNN and various web news sites. 20 minutes into the shooting, none of the online newspapers were yet covering it. They couldn’t write so quickly.  CNN was at the scene because it had been covering the Black Lives Matter demonstration, but CNN kept showing the same two or three videos over and over and their journalists kept repeating four or five lines over and over.

After a few minutes, I opened Twitter on my phone. Over 700,000 postings in a few minutes. There were live videos every few minutes. Someone posted a live video of the shooter killing a police officer. Postings from people in the crowd, journalists, postings from Dallas police, etc. Even the shooter was posting to Facebook.

A few days later, another shooting of three police officers in Baton Rouge (Louisiana, US). And a few days later, an attempted coup in Turkey. The military shut down TV, but no problem: the prime minister used his cell phone to call CNN in Ankara and did a live video chat on TV. On the streets, people used Twitter, Facetime, and Periscope to broadcast live.

You saw the event, unfiltered and immediately, from every possible angle. No news organization can possibly compete with this. No news organization will throw its doors open to everyone, including the shooter, and the prime minister. That would admit complete loss of control.

This is the advantage of social over traditional media. Everyone can broadcast. The traditional media, which shows the official point of view of society’s infrastructure (government, military, corporate), is not only outrun; it becomes obvious that it’s just another group, and worse yet, its version is wrong. Authority loses authority. Who are you going to believe? CNN? The Dallas police department? The mayor? Donald Trump? The prime minister? Or the dozens of videos from people at the scene?

But that’s also the disadvantage of social. It can show unfiltered videos but it doesn’t offer meaningful summary or a balanced analysis. And as soon as the action is over, it jumps to the next riot, shooting, or disaster. Why was there a coup in Turkey? It takes a great deal of reading and knowledge of the country to understand the issue. It can take six months or more for senior journalists, professors, or topic experts to research and write to explain an event. Analysis can’t be done in tweets, seven-second videos, and two-hour attention span.

Nevertheless, the seven-second news cycle has undermined the traditional news media. The last twenty years has been a series of news debacles: the reporting on the buildup for the Iraq War turned out to be cheerleading for White House lies. The news media didn’t see the massive Wall Street fraud that led to the 2008 crash. News experts were confident Trump could never win the nomination. They didn’t expect Brexit. And so on. They’ve missed every major story. Before, we would have never known because there was no alternative. Now, we share information despite their efforts. Social news prevents the traditional media’s control over news.

How social is being used by people is interesting. In my book on Twitter, I wrote about the users of Twitter. Many people in Silicon Valley don’t realize that Latinos and Blacks are very active on Twitter. They use Twitter more effectively than people in Silicon Valley. In Periscope (the video app), I’d guess that Blacks make up nearly half of the videos (whatever the percentage, it’s a very large share).

There are several reasons for this. Blacks, Latinos, and Chinese use smart phones more than US whites (yes, look it up). They have deep family ties and often live at long distances from each other. So they constantly use video chat and text messaging to share, talk, and see family and close friends.

They also use these tools in a different way. If you search on the web “how to use social media”, “how to use Facebook”, “how to use Twitter”, etc., you’ll get hundreds of blog postings by corporate marketing people who explain how to use these tools to make money. But Blacks, Latinos, and Chinese aren’t doing marketing. They understand and use the social tools much better than corporate marketing people. Black Twitter (yes, it’s a thing) is entirely different from “white twitter” (that’s not a thing). Because they’re using it for themselves, instead of under the obligation to show the proper face of a corporation, they do whatever they want, which allows remarkable creativity.

So where’s The Truth? We begin to realize that what was The Truth in the 60s and 70s turned out to be a carefully edited and tightly managed version of the news from one group’s point of view. Social destroyed that.

But social didn’t create something new and better in its place. What we have now is 700,000 postings within minutes and nobody can read or understand all of that, so Truth has evaporated. You pick your own truth, or, more likely, you watch today’s events while forgetting yesterday. Yes, it’s a mess, and no, it’s not going to get better or people will figure it out. There’s no future anymore.