Paper newspapers are dying fast, everyone knows that, (except for the exceptions). We want to read our news online. And we can, sort of. I picked up on this in my information warfare - perception management blog. It is important because it impacts what the man on the street knows - preferably and it also true.
However, this is my investment notebook. How is it possible the Wall Street Journal, (profitable), Washington Post, Guardian are struggling? What about the advertising model?
Yet they want more money from us, the consumers. And, I for one am willing to pay for what I use. However, there are two problems:
- Does the publisher cover what I need to know?
- Does the publisher have a bias I need to avoid?
I understand the first problem. If revenue is not coming in, they can't hire reporting staff. The obvious answer is crowdsourcing. When planes crash, police shoot people, buildings burn, or people are saved by jumping into a crowd, odds are it is filmed on a cell phone. Crowdsourcing is already happening and will not stop or be stopped, we are there. However, the potential for trolls, fake news, published assumptions is great.
The second is a bit trickier, bias. Two of the better and more prolific publications right now are the Washington Post and the New York Times. They are competing with each other and that is probably a good thing. But they seem to have a liberal bias. This must read from Pew makes it clear, consumers seek out their bias, "the study finds that those with the most consistent ideological views on the left and right have information streams that are distinct from those of individuals with more mixed political views – and very distinct from each other."
I am a confirmed centrist, I try to read intentionally balanced sources like AllSides. I vote for qualified candidates not along party lines, which means I have to educate myself with tools like Google Alerts by name, (in advance of the election). I need to be careful what I feed my brain, conservative or liberal.
But, the rich question is where is the money in news media? Mediaguide reports, "The self-evident downside of the digital revolution for media houses is that people are less willing to pay for journalism, as it can be found online for free."
This assumes people even want "news", PBS reports, "As three former News Corp. executives recently told The New York Times, News Corp. today has become "a sports and entertainment company with a newspaper problem."
Assuming there is a set of customers that want news, if you are making money, by advertising, subscriptions or even being paid to influence elections, you have to make your packaged content desirable. And if you skip the well proven Euro tabloid model, (sex may not actually sell), then you quickly get back to bias, including the bias for "bad news".
As an investor do I invest directly in a corporation that owns news outlets to weight my exposure over monster index driven ETFs? This dated article tries to show the players.
- GE, which we own gets us Comcast, (NBC)
- Newscorp, Fox, WSJ, NY Post
- Disney, ABC, ESPN
- Viacom, MTV, BET, CMT
- Time Warner, CNN, Time
- CBS, Smithsonian
DIS has a paltry dividend, minor exposure to news, is off a bit for the quarter. We clearly have it in our ETFs, I am not moved. NWS is too bouncy for me. GE, we already hold, the retirement debt has my full attention. Viacom, I will pass on, but the opportunity for targeted news with BET and CMT is duly noted. Time Warner, TWX, is also too bouncy for me, you need one of those flash crash Wall Street auto-traders for this. CBS, well is CBS. With apologies to True Lies, none of the choices are blowing my skirt up. If I wanted low margins coupled with high competition, I would invest in a grocery store chain.
Yet something in my reptilian brain does not accept this. People want news, they just do not want to pay for it. Sex doesn't sell, they say, (and I doubt that is true). Do you remember waiting for the Sunday Newspaper as a kid? We would skim the front page and local news, ditch the ads, and head for comics. Some kids read the sports or arts pages, I read the financial section. It wasn't the news, per se, it was the experience, (yup, the same experience line they use to prove big box malls aren't going out of business). Today, the only time I read print newspapers is when the hotel gives them out for free and I take them for the airline flight, the "experience" is trying to fold the paper pages in the tight airline seats. Newspapers were meant to be read on a big flat table.
So, how do I read news today? Google News! I don't care about their secret sauce patent, it is fast, gives me what I need, (the basics) and seems fairly balanced, my own bias choices affect what I see so I LOVE their balance. I spend enough time reading Google News, it makes sense to use the personalize feature, you should check it out if you haven't. There are no distracting ads, and a fair amount of localization, so I do get some of the "Sunday paper experience".
But how do they monetize Google News? I am not sure, but it is one more reason not to bet against GOOG, GOOGL. While there does not seem to be that much money to be made from being a news producer per se, I think they will give the big six a run.