Blame fraudulent circulation numbers and editorial salaries that are still inflated by stock options to nonexistent profits on the dot-com era for the demise of the news industry, but whatever you do, don’t get deluded into thinking newspapers are going out of print because of free Web sites. As it turns out, news has always been free.
The likes of Jimmy Breslin, Pete Hamill and Mike Royko were subjects of bidding wars because they actually moved the needle, but the rest of us should be paid in line with the business value we deliver.
When newspapers and magazines first launched Web sites, the Internet was supposed to create a new revenue stream for the publications, sort of like e-commerce becoming a new channel for retailers. Papers should have been able to add Internet ads to print ads and subscription and newsstand revenue, all while modernizing their business models. So what happened?
Is it Craigslist? Is it the oxymoronic (accent on moron) idea that information wants to be free? That’s the prevailing idea, but it’s entirely false; as Jeff Sonderman at NewsFuturist.com has ably demonstrated, information has always been free, and newspapers have been especially free.
For about 180 years, the retail price of a newspaper has never reflected the total cost of assembling and producing it… The price of a product in a competitive market falls to the marginal cost of creating and delivering one more unit. For printed newspapers, the marginal cost was a little more paper and ink, maybe an extra block on the delivery route. Subscription fees never accounted for the fixed costs of producing the content: the building, staff, printing press, etc. That share of costs has long been paid by advertising and diluted by economies of scale. The same economic forces apply online. And because the marginal cost of bits is nearly zero, the appropriate price becomes too small to bother tracking. Free is the result.
But something has surely changed, otherwise the print media industry wouldn’t be in as much trouble. And that something is reporter salaries, which have become disproportionately high since the advent of the Internet.
The phenomenon isn’t limited to online news. I remember hearing retail executives moan that hiring merchandisers for their e-commerce operations was costing them much more than merchandisers for their brick-and-mortar businesses.
Why? Because salaries had to be adjusted for the stock options that artificially inflated the potential compensation packages offered by the dot-com start-ups. How could Walgreen’s compete against Drugstore.com without compensating for the stock options that could make someone an instant millionaire? They couldn’t. The dot-com bubble burst threw some people out of work for a short period of time, but did nothing to bring salaries back into line.
So all of a sudden, in 2001, I went from making $45,000 for the print publication to $60,000 per year for the online version while working for the same publisher, Conde Nast. Not that I complained. At my last full-time position, I made $90,000 per year working as an editor at Ziff Davis Enterprise – and had reporters working for me who earned well above that. It’s public knowledge that Walter Mossberg of the Wall Street Journal earns over $1 million per year.
Why? What value do we bring that justifies those kind of salaries?
Walt would argue that he’s the biggest name in tech reviews, and he’s right. He changed the way people look at technology. But is he worth $1 million per year in additional circulation numbers to the Wall Street Journal? I’m not picking on Walt, mind you. And I’m not blaming anyone for taking the money that’s lying there for the taking. I did it myself.
But here’s the thing. Why should reporters and editors be making more money simply because we’re working on the Interwebs? Online ads don’t bring in more than print ads – on the contrary, it’s simply easier to track their impact in terms of views and clicks.
In the days before online publishing, newspapers got in bidding wars for star reporters, like Breslin or Hamill here in New York, or Royko in Chicago, because those reporters influenced whether people bought one paper over the other, and circulation figures were used to attract advertisers and justify ad prices. It made sense to pay those guys whatever it took because their influence was far greater than the pages of copy they filled.
But very few reporters have that effect, even online.
The reason that most beat reporters hung out in bars and got tips on stories from beat cops and bookies is because they made about the same as beat cops and bookies. It wasn’t romantic, it was hard, tiring work, and it paid poorly. And their bosses were more like Perry White than Lou Grant.
There’s another issue I touched on above as well, and that is fraudulent circulation numbers. Newspapers have had to refund advertisers ad dollars in the millions to compensate for having cheated their customers with inflated circulation numbers. In addition to the direct cost, there’s been an indirect cost in terms of trust and loyalty. Advertisers like having an independent means of verifying the impact of their ads.
It isn’t free content that’s sinking newspapers; it’s the dishonesty of the publishers and the inflated salaries of the content producers that are to blame. What we need to save our business is simply less greed on all parts.
[Image source: Photo by striatic via Flickr]
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womanuptown says:
Walt Mossberg makes $1 million?! Score one for us nerds. It's ridiculous to say that journalists' salaries are bringing down newspapers, though. The WSJ reporters grinding out the earnings reports and an occasional page 1 piece are probably making a tenth of that.
What's really screwing newspapers (particularly the big ones) is their need to keep raising earnings to please shareholders and the financial industry. The newspaper industry as a whole seems to have been blinded to the implications of technology. Some of those MBAs they hire should have realized that on-line classifieds would make theirs obsolete. Ditto stock quotes. Journalists are not supposed to worry about that, but, if you'll notice, there are lots more people in various forms of corporate management in all these organizations than, say, 15 years ago.
I'll subscribe to newspapers in print or online as long as they report the news with a depth and reliability I can't find elsewhere. Of course, I like editorials that make me think as well. Why should I resent paying for quality? We pay for Time or Newsweek or Bloomberg or even People. The day Wall Street convinced America's media that their brands were worth more than the quality of their content was a sad day for the electorate.
jina says:
Not sure that a few anecdotes allows you to indict everyone in the profession as overpaid--especially at small-town and regional newspapers, where no one makes anywhere near the kind of money you're describing, but the jobs are chafing off just the same. This argument needs some real figures: how many journalists get paid above "what their worth"--in your estimation--and how much of the bottom line of their papers does that eat up? Etc. etc.
Then again, as a guy who's signed on to an organization that pays writers based on the ad revenues their pages generate, you're clearly living your belief. Though in the old days, you might've disclosed that your column is also an implicit justification of your employer's business model...
knickerbocker says:
The comma splice in your title is painful. Try a semicolon next time.
Christie Smythe says:
Dude, just to be clear here: for every Mossberg there are probaby at least a few hundred grunts covering city council meetings day in and day out who make, at best, $30,000 or $40,000 per year. For that sum, they often toil long hours and under difficult conditions. It's also an open secret that most reporters, if they care about their work, will often log many hours of unpaid overtime. Oh yes...also they do that under the constant fear of layoffs. Did you happen to catch the story about the suburban reporter in Missouri who actually got SHOT while covering a city council meeting, called his newspaper about it, and then later got laid off? I'm sure he didn't make $90,000 a year. http://blogs.riverfronttimes.com/dailyrft/2009/04/suburban_journals_fires_reporter_who_took_bullet_during_kirkwood_massacre.php
Ric Marion says:
This is why tech guys have such trouble running their own companies. They are not economists and think they can get away posting ridiculous columns like this.
Salaries are based on the value brought to the enterprise. If the business isn't making money - or making less - then salaries go down. They have nothing to do with the content cost - they have everything to do with the profitability of the company.
Using Hickens logic, everyone should work for nothing.
I guess that's one way to become viable, but it sure doesn't pay the mortgage.
Mark Loundy says:
The elite writers that you name are the tiny exception to the rule. The vast majority of journalists toil at small town newspapers for near-starvation wages.
Mark Loundy
San Jose, Calif.
Eyeball Wit says:
Earth to Hickins. Earth to Hickins. Come in Hickins.
The federal poverty guideline for a family of four is $23,000. A Massachusetts program providing low-income public health care is targeting families up to 300 percent of the poverty guideline. That's $69,000, which is more than your overpaid internet reporter is getting paid.
There are plenty of cops and teachers, and yes, bookies who are earning six-figure salaries. I won't even talk about the mid-level analysts at Citibank who make more than the President.
I'm not sure what's more appalling--the total wrongheadedness of your premise, or the shoddy "reporting" that you used to support it. Maybe you should turn your attention to something important like finding Obama's Birth Certificate.
I have a friend who was an EIC for a big, high profile magazine. His wife sold ads for a smaller mag and she always made a lot more than him, despite the fact that she spent much of her time taking clients to expense account lunches.
I'd invite you over to my yacht to discuss this over a Rob Roy, but the butler called in sick again today, so I've got to pick up the Aston Martin from the shop myself this afternoon.
mattheww says:
Years after the music industry supposedly imploded, my experience with actual music is exponentially richer and more satisfying than ever. I am regularly left speechless by the question "what music do you like," because so much good stuff is out there from so many sources, and various Internet tools make discovering music likely to appeal to me automatic where it once was all but impossible.
The same thing is happening with news. The industry keeps telling us its in its death throes, yet the public is better-informed than ever.
Sorry, dudes. But don't worry about us -- WE will be fine.
S.H. LaMont says:
This is a joke, right? I spent 42 years in the news business as an editor and writer, worked at seven different daily newspapers, including two of the largest in the country, and only rarely did I ever feel the reporters, writers and photographers -- content producers -- were compensated fairly.
There is a world beyond New York City. You should check it out.
Paul Dailing says:
http://www.bls.gov/oco/ocos088.htm#earnings
I googled "reporter salaries site:.gov" and within four minutes had that link. That's the research you should have done. It's a Bureau of Labor Statistics report. It has the most recent real numbers. Median income: $33,470. One in 10 reporters earned less than $19,180. I feel those statistics disprove your contention. I submit that you might have had an atypical experience.
If you're going to claim to be a reporter, report. It's not that hard. To repeat, it took less than four minutes to find those numbers.
patrice says:
Are you out of your mind? I never complained about my salary as a New York Times reporter, which was in the 90's when I left two years ago. (There's been a pay cut since.) But .... overinflated? The job can take up to 20 hours a day, and there's no bathroom break. I had two advanced degrees and 20 years of daily journalism experience. Most of my fellow, um, content providers were fully capable or earning three times their salary in some other line of work. And we all had to live in New York on our 90-whatever thousand dollars. Even people with kids! AS for earning more for working on the Interwebs, I have no idea what you're talking about. Filing for the web site, in addition to the print addition, is a staggering volume of work that pays exactly zero dollars extra. Now, I hope you hear from a lot of those overpaid $40,000-a-year reporters at local and regional papers, the ones you believe to be destroying the industry. You might ask how they're enjoying their stock options.
Allan Hoving says:
We can't keep insisting that "information wants to be free" then wonder where the jobs went. iTunes aren't free, Google ads aren't free. Content that's worth more than zero shouldn't be free.
patrice says:
Oh, shit. I meant "edition."
Christie Smythe says:
Ok...I think he's heard enough about the salaries of typical reporters. He did raise good points about Mossberg being overpaid, and certain other "content producers." Journalism is way more fun and soul-satisfying than investment banking (please read Michael Lewis's "Liar's Poker" for reference), which is a big reason why salaries are low. However, the blogger he cites, Jeff (a J-school friend of mine) is wrong about content always being free. In a free market, nothing is free. ("i.e. There is no free lunch?") It's just been subsidized by advertising and other means. The Web is breaking down that subsidy system because it makes the ad market much more competitive. What is truly free might be offered by volunteers, but the quality of that content will vary considerably (just like the quality of work conducted by volunteers always varies). Otherwise, who steps in to fill the gap and "fund" content? That could be corporations with a direct interest in shaping the message. That's already happening, actually.
Ron C says:
Too much BS, (read outright lies) and too little reliable content has killed newsprint and is killing online vendors. It's about the credibility quotient of media content providers, not salaries. The hot topic today is nationalized 'health care' - an abject disaster everywhere it exists. Hence, the credibility of media-fonts supporting THIS administrations version has dropped below zero. That is just one BIG example of why most of us are not willingly to pay to read or see more of such insanity!
Robin 'Roblimo' Miller says:
Wellll... GAWRSH! I guess I is sposed to be ashamed of maself now, bein' one of them 6-fig jernlists afore I got laid off and all that, by gawrsh I sure does blame myself for the moronocity of all them pubisher people and such what ain't figgered out that their Interweb -- and I am damn glad I had a healthy "side" video production business going before I got Bushed. Funny: the email on the journo-group listserv right after the one pointing to this bunch of blather was an offer to write 800-word articles for $25 each.
Journalism is no longer a craft, let alone a profession. It is now officially a hobby.
Esther Schindler says:
By your logic, all fiction writers are all vastly overpaid because hey, look at the money JK Rowling has made.
In short: what a crock. When I started writing professionally in 1992 for Computer Shopper, I was paid $1 per word, and a typical assignment was 1800 words. Today, despite the reputation I have earned, I'm LUCKY to get $1/word as a freelancer, and -- despite the web lacking the "must fit on this scrap of paper" constraint -- the assignments are rarely more than 1200 words.
Sir, I submit that you do not know what you are talking about. If you were writing on assignment for me, I would have rejected your article and said, "Go back and do some research." This doesn't even merit a kill fee.
dan tynan says:
back in the days when I was an executive editor on a magazine with 1.2 million circulation and (allegedly) 6.6 million readers, according to MRI data, our editor in chief made around $150K a year. interestingly, that was also the salary of a midlevel ad sales person with 20 years less experience and a whole lot less gray matter. you want to talk salary disparities, you're aiming the gun at the wrong target.
also, you forget to mention one other thing that's kind of important: the web has caused freelance pay rates to drop through the floor and into the parking garage. many many publishers are moving to a model where the readers provide the bulk of the content, a la community sites like Digg or Slashdot. when they do commission stories from experienced writers, theses stories get syndicated all over the Web -- without any additional compensation to the writers who created the content. in the old days, when you wrote something, you wrote it for one publication; if another pub wanted your work, they paid you to write something else. these days, you write something for everybody for the same low low price.
again, if you want to talk greed, you're looking at the wrong place.
cheers,
dt
permalance says:
http://www.jobvolume.com/salary/Editor.html
"The median offered salary for Editor positions during the observed period is 45,000$. This is 40% lower than the median salary for all observed jobs. Top paid Editor positions are offered with salary 130K and above.
The offered salary for entry level Editor positions seen recently is around 30K. Approximately 29% of all published positions are for entry level. "
http://www.jobvolume.com/salary.jsp?q=Editor&p=&t=h
"
The median of the offered rate for Editor contract or temporarily positions is 22/hr. This is 38% higher than the median rate for all observed jobs.
Top rates for Editor positions are around 40/hr and above. 14% of all published positions required senior level of expertise. Approximately 52% of all published Editor position are for entry level with rate below 20/hr. "
Dave says:
This might make sense if talking about the large metros. Even then the papers have shed about a third of their writing staff, and I doubt they're handing out raises right now. I still think publicly traded papers are unable to produce the same profit margin they once could. If news is more like a commodity today, then boards, publishers and stockholders should accept the idea that the margin needs to be adjusted to fit a new model.