Clay Shirky’s blog presents us with the same clarity and impact that his ideas do.  He has thought and rethought basic truths about the evolution of media in an interactive age, has stress tested his concepts in real life and has the patience and intelligence to provide the valuable historical context that helps to clarify the inexorable direction of change.

His most recent post has flamed a fire of discussion across the web.

The crux of his argument is captured at the end of his article.

Society doesn’t need newspapers. What we need is journalism. For a century, the imperatives to strengthen journalism and to strengthen newspapers have been so tightly wound as to be indistinguishable. That’s been a fine accident to have, but when that accident stops, as it is stopping before our eyes, we’re going to need lots of other ways to strengthen journalism instead.

640CF10E-5B12-43DE-A9C7-4B3BCE89022D.jpgWhen we shift our attention from ’save newspapers’ to ’save society’, the imperative changes from ‘preserve the current institutions’ to ‘do whatever works.’ And what works today isn’t the same as what used to work.

Using the analogy of the invention of the printing press in 1500, and the ensuing tumult of innovation and discourse that follows, Shirky points out that in today’s changing media landscape we can easily define what is being lost — the traditional newspaper model — but we can’t easily define what is being found.

During the wrenching transition to print, experiments were only revealed in retrospect to be turning points. Aldus Manutius, the Venetian printer and publisher, invented the smaller octavo volume along with italic type. What seemed like a minor change — take a book and shrink it — was in retrospect a key innovation in the democratization of the printed word. As books became cheaper, more portable, and therefore more desirable, they expanded the market for all publishers, heightening the value of literacy still further.

The essay is exceptional reading.  I recommend it highly.

From Shirky to Veblen

One of Shirky’s points in his essay is that in the pre-digital model, control of the printing press created a significant advantage and a significant cost for a publisher. The imperatives of the machine drove the overall organization and economics of the enterprise. (I’ve touched on this relationship in an earlier post about the economics of specialty media — content is a relatively small part of the overall cost structure, although it is the most important element of building the community that drives business results.)

The premise is closely aligned with Thorstein Veblen’s observations about the power of machine processes in organizing and expanding markets.

The scope and method of modern industry are given by the
machine. This may not seem to hold true for all industries,
perhaps not for the greater part of industry as rated by the bulk
of the output or by the aggregate volume of labor expended. But
it holds true to such an extent and in such a pervasive manner
that a modern industrial community cannot go on except by the
help of the accepted mechanical appliances and processes. The
machine industries — those portions of the industrial system in
which the machine process is paramount — are in a dominant
position; they set the pace for the rest of the industrial
system. In this sense the present is the age of the machine
process. This dominance of the machine process in industry marks
off the present industrial situation from all else of its kind.

Veblen would also have appreciated the tension between the current stewards of the newspaper industry, who recognize the forces at play around them and who are trying to adapt their current economics to highly disruptive shifts, and the engineers who are building new systems for distributing, enhancing and creating content that replicates much of the newspapers core principals….the 14-year old boy on Shirky’s essay.

C1299FDA-708F-477C-8CB0-46548DD95701.jpgI was reminded of Veblen because of an ironic citation in Boing Boing on Sunday. Veblen light-heartedly points out that the imperative of a newspaper is to generate as much value as possible to its advertisers from its circulation, and that the focus of the editorial team is easily swayed. I’d venture that the relative pressures of content integrity and commercialism are better regulated today than at the turn of the century.

The first duty of an editor is to gauge the sentiments of his readers and then tell them what they like to believe. By this means he maintains or increases the circulation. His second duty is to see that nothing is said in the news items or editorials which may discountenance any claims or announcements made by his advertisers, discredit their standing or good faith, or expose any weakness or deception in any business venture that is or may become a valuable advertiser. By this means he increases the advertising value of his circulation. The net result is that both the news columns and the editorial columns are commonly meretricious in a high degree.

Sulzberger: A Clear and Uncertain Sightline

At the same time that Shirky’s essay on the epochal transition in media hit the web, Arthur Sulzberger, publisher of the New York Times, was giving a speech about the present state of newspaper at Stony Brook University. The full text of the speech is here.

Sulzberger speaks specifically and pragmatically about the situation facing newspapers. It is closely aligned with Shirky’s assessment, and a good primer for the business problem that needs to be addressed.

For years, we hoped that financial success would just come from making our products more accessible, informative and entertaining. The idea was simple: work harder, be more creative and thoughtful, and the revenues will return in force. Regrettably, there were larger, more complex forces at work and we are now confronting some hard truths:

* Let us start with the fact that a deep, cyclical downturn has dramatically affected key areas of commerce, including the real estate, employment, automotive and retail industries, the lifeblood of American newspapers and local television.
* The Internet has proved to be a far superior advertising platform for listings. The classified businesses are disappearing from newspapers and are unlikely to migrate in any significant way to news Web sites.
* Selected display categories are also subject to secular shifts as users move from print to digital consumption. Beyond that, marketers are growing skeptical of the ability of display ads on any platform to capture the consumer’s attention in a fragmented media landscape.
* And, Internet businesses have proven incapable of replicating the economics of print. Few people have been willing to pay for online news. Advertising rates for online inventory are relatively low. And news Web sites are poorly organized to take advantage of the contextual advertising model that dominates the Internet.

With this in mind, there are now all kinds of solutions and tactics being offered up to allow online news sites to adapt financially to the changing conditions, but it is a little bit like the banking crisis. We know there is an answer out there somewhere, but we are not sure what it will turn out to be.

So the immediate response of journalism organizations, including ours, to all this economic and technological disruption, is to make substantial expense reductions. These have included closing production facilities, creating new methods of distribution, reducing the size of our newspapers and layoffs.

This creates a paradoxical situation, summed up by Sulzberger as the mystery of increased demand at decreased value.

As I noted earlier, the demand continues, but we are still left in the paradoxical position of having a product that an increasing number of people use, but which has decreasing revenues and profitability. This, coupled with radically different user experiences, argues for new goals and initiatives.

The moment has come when Veblen’s theory of machine-driven economics, which has propelled the newspaper industry for more than five generations, is face-to-face with the economics of the digital age, where audience and production are distributed commodities, and economic value is driven not by reach but by results.

Sulzberger’s anchor point for the future is three-fold: a belief that print will remain a relevant part of the media mix, which will sustain the economic imperative of the traditional newspaper, albeit at lower levels; a conviction that by identifying the scale necessary online to generate effective revenue levels, the underlying economics of the content-generating organization can be sustained; and a generational faith that journalism is a necessary and contributing part of society. The essence of the business challenge is to protect journalism.

The speech is good and fair. It is compelling. And it is a better validation of Shirky’s observations than any other commentary on blogs, in conferences and on message boards could possibly provide.