Tuesday, June 16, 2009
Will online news become the standard for news gathering and distribution? We'll talk with the growth in online news sources and how changes in the media landscape will impact tradition media.
DOUG MYRLAND (Guest Host): I'm Doug Myrland. These Days in San Diego, and we're going to continue our media-themed discussion during this next segment. And we'll ask the big question: Will online news become the new standard for news gathering and distribution? We'll talk about the growth in online news sources and how changes in the media landscape may impact traditional media. And we have two guests in the studio including Andrew Donohue, Editor of VoiceofSanDiego.org. Welcome, Andy.
ANDREW DONOHUE (Editor, Voice of San Diego): Thanks for having me.
MYRLAND: And Chris Jennewein, president of SDNN, San Diego News Network. Welcome, Chris.
CHRIS JENNEWEIN (President, San Diego News Network): It's a pleasure to be here.
MYRLAND: And it's a pleasure for me to have both of you in the studio. You're both people I've admired for your dedication and your adventures. And I want to start with you, Chris, because you worked in online media before it was hip, and in the traditional way. You know, you worked for papers that started websites and you ended up in San Diego with SignonSanDiego.com. But before that, you were also in that same business, right?
JENNEWEIN: That's right. I've been in online media since 1988 and that was back in the days of modems and mono-color screens, just white letters on a fuzzy black background. It's changed a lot since then.
MYRLAND: And – But a lot of things that were envisioned by people then really have come true, including the migration of a lot of advertising to online media.
JENNEWEIN: The media landscape has changed dramatically. Back in the eighties and nineties, I think a lot of us at traditional newspapers thought we were creating a path for newspapers to find a future in electronic media. What happened was, it snowballed and the new online media is taking over old media. We've really seen that in the last five years.
MYRLAND: I want to stay on this with you for a minute, Chris, because when I get to Andy I'm going to be talking about a nonprofit model and I want to stick with the economics of the commercial media marketplace for just another couple of minutes. And when we think about the 1980s, we think about newspapers in most markets being the big 500 pound advertising gorilla. Television stations, radio stations, they may have had their share of the market but, typically, the major daily newspaper just really pulled a lot of ad dollars out of the market and one of the ways they did that was in classified ads. Now I think one of the first things you experienced in online media was the migration of some of that over to the new media.
JENNEWEIN: That's absolutely right. And I think most newspapers saw in the nineties that classified was threatened. I worked at Knight-Ridder and Tony Ridder, who was then the chairman, put a massive investment into building classified sites. Cars.com and careerbuilder.com are outgrowths of that time, still owned by Gannett and now McClatchy that bought Knight-Ridder. But what I think nobody realized was that it was a complete sea change. The future is now online. Advertising is moving very rapidly online, not just from newspapers but from television and radio, as well, and it's a different model. Advertising is less expensive now and, in many ways, easier to do. Look at Google where you can sign on and buy keywords in a few minutes at any time of day. And that's affected the models for not just media but for the advertising agencies as well. I think overall it's a good thing. I think it's much easier now to promote your business using advertising. It's less expensive and the audience is much, much larger. I think…
MYRLAND: But for traditional newspapers it's been almost a perfect storm of several different kinds of advertising moving away and economic stress causing some of the other major advertisers, retailers, to cut back. It's not an easy time to own a newspaper, right?
JENNEWEIN: You're – it is a perfect storm. And I think only the best captains, if you will, will pilot through this storm. I think what you'll find in the end is newspapers continuing. They'll be smaller. They'll be primarily online. In many ways, it's going back to newspapers' roots. If you go back to, say, the forties or fifties, there were still a lot of competing newspapers. I think New York City had as many as six. I think we're going back to that kind of time where there's not one dominant newspaper, where there are many different outlets on the media in the media landscape.
MYRLAND: That's Chris Jennewein. He's the president of sdnn.com, and we also have Andrew Donohue, editor of the VoiceofSanDiego.org. And, Andrew, we're talking about economic models and you, at VoiceofSanDiego.org have said you're going to not embrace that commercial model but instead embrace a nonprofit model, and it seems to be working for you. You're still here and thriving after four and a half years, which is something I think a lot of people would have been surprised to hear me say four and a half years ago.
DONOHUE: Yeah, I think what we've – sort of what we embodied was the idea that the traditional media both sort of pre-bust and now essentially now that newspapers are shrinking very rapidly, was that public service journalism wasn't being done, the sort of investigative, accountability reporting that really a community needs that holds our officials accountable and sort of holds powers accountable, wasn't being done. And when the marketplace isn't providing a certain service then a lot of times philanthropy steps in. So we're using a model that's not all that different than yours here at KPBS, which is a lot of membership donations, large donations, a little bit of online advertising and foundation money as well.
MYRLAND: Now I want to ask you one of these impossible questions that grant funders always ask and I never could come up with an answer in all my years. But how is it that you're going to make your model sustainable? You know, what – And, really, I think we should take just a minute and say it's not that different. The only analogy isn't to KPBS, it's analogous to other nonprofits. If you take a look at a good-sized museum or a symphony orchestra in a city the size of San Diego, there's a mix of funding that comes from either ticket sales or memberships, whatever combination there. There is generally some corporate support, and there's some grant funding from various places, and then you hope to get some philanthropic funding. And, as I understand it, you're roughly a third, a third, and a third in terms of your budget so it's a traditional nonprofit model but it's not really been applied to the kind of service that you're providing in terms of journalism and news.
DONOHUE: That's true. I mean, I think what we've seen – we're going to look back at this as almost a fluke of history that you could somehow do through a commercial enterprise this sort of in-depth and investigative reporting that communities need. And now we're seeing a total revolution and we're seeing a lot of different models tried. I think ours is as sustainable as the certain examples you used, which was the sympathy – the symphony or the museums or things like that.
MYRLAND: I think the thing that Public Broadcasting has going for it that you, at least in the initial years here, haven't had is that Public Broadcasting, of course, had an affiliation with a national brand. So KPBS didn't have to make that case to its members all by itself. We were a purveyor of great radio and television programming from a national source. You, on the other hand, only have your own resources to sell, so to speak.
DONOHUE: That's true, and that's been one of the large challenges that we've had from the start, which was building that credibility as a brand new news source every single day, and you can only do that by doing good stories every single day and building people's trust over time. And I think the analogy continues when you look at what we're providing, what Public Broadcasting provides, is really something that no one else in the commercial market provides if you look at Public – or, for-profit TV and radio stations. Public Broadcasting provides something that nobody else is doing and that's exactly what we're trying to do as well.
MYRLAND: So, Chris, is there something that makes it more difficult to do in-depth journalism in a commercial setting than in a non-commercial setting in this new online world?
JENNEWEIN: I think that for-profit media sites are going to dominate the future just as for-profit newspapers and TV stations dominated the past. The business model is changing, the way of delivery is changing, but I think that being for-profit forces you to figure out what the audience really wants to read, really wants to hear, really wants to see and when you do that, you are most likely to have a big impact. I'm a big believer in what Voice of San Diego is doing but I think there's a – I think you reach a larger audience with a for-profit operation that's attuned to what that audience wants. Let me use an analogy from history: William Shakespeare. He wrote his plays for the street, for the audience. We now think of them as literature but he was focused on getting the largest possible audience into those theatres back then.
MYRLAND: But, of course, in a nonprofit model, you're also depending on the street, if you will, on the people to become members and make contributions so the more dependent you become on that direct membership revenue, I suppose the more responsive you get to the daily needs of people?
DONOHUE: Yeah, I've heard that argument before that somehow you're not responsive to the public as a nonprofit. I mean, we have to drive readership, we have to get people interested and engaged and have to get them to buy into our product as well. And if you look at what a lot of for-profit sites are doing right now is, they're very much driven by hits, right? I mean, everything comes down to the bottom line; the more hits you get, the more money you bring in. And, unfortunately, that doesn't always lead to the highest brand of journalism. Sometimes that leads to more coverage of things, you know, in depth things like "American Idol" and stuff like that. So…
MYRLAND: But I do need to get back to the sustainability question.
MYRLAND: I mean, even if you are extremely high-minded and you're not covering any pop culture at all, you still have to convince a group of funders and philanthropists over and over and over again of your value. Whereas with a commercial model, if you're delivering the hits to the website and your advertisers are feeling like they're getting results, you really don't have to go through those justification steps.
DONOHUE: Sure, you – Well, two things on that. First of all, I think you guys and your affiliates and cities and counties all around the country have proven that it is sustainable and that it can be done. And the second thing is, I think any for-profit institution would have to do the same sort of convincing every day, which is convincing people to come to their site and convincing people that they have the best stories as well.
MYRLAND: Chris, I want to talk about the for-profit model a little more and I know that you're not going to give us any business secrets but one thing that struck me in doing research for this program is that they talked about traditionally newspaper profit margins were twenty or thirty percent and now they're down to ten percent. So I got to thinking, well, there's for-profit and then there's for a lot of profit. So are you maybe suggesting that those days of forty and fifty percent margins in the news business are not going to come back any time soon but something a little more modest than that is more doable? Or are your ambitions to get back to the halcyon days of the sixties and seventies?
JENNEWEIN: I think there was a period, particularly in the 1980s, when newspapers were uniquely profitable. There wasn't significant local competition for classified advertising, for what's called in the industry price-in-item advertising, a sale and how much a particular houseware is, for example, at a department store. Those days are gone. I think that for-profit media can make an impressive profit, a profit that will pay back investors. It's probably not twenty – I think the average in the newspaper industry in its heyday was in the high-twenty percent range. I think the average in U.S. history is closer to ten percent, and I think that's a target that we'll certainly strive for. And sites like San Diego News Network, sdnn.com, can do that, I think, very effectively with the new advertising tools and techniques that the internet has created.
MYRLAND: That's Chris Jennewein, president of San Diego News Network, and also our guest is Andrew Donohue, who's the editor of the VoiceofSanDiego.org. And I've talked a lot about the economic models and I think probably a lot of people listening are maybe, on a daily basis, more interested in the content than they are in exactly how it's paid for or how it's sustainable. So I want to talk a little bit about, with both of you, about your content strategies and how you are going to attract those eyeballs to the website or – and convince people that they should sign up for your tweets or whatever the technology is. And I want to start with Andy on that. You've been in this business for four and a half years and you've had a little time to experiment. How do you figure out what people want?
DONOHUE: It's really interesting, I think. You can measure on the internet very, very easily what people are reading and what the most popular pieces of journalism are on your site. And the one thing that we've found that mixes both the popularity and our mission as a nonprofit is that people are really hungry for, like we've talked about before, accountability, reporting, investigative reporting, the sort of stories that expose wrongdoing both by the powerful and by the politicians. And the one thing that we've really learned and really tried to focus on is that there's really no need, like in the past when you have a small staff, to be a wide, general interest publication. So what we're really done is tried to be the best at a very small number of things. So that is focusing on local politics, education, environment, crime, science and technology and the housing and economic markets, and really…
MYRLAND: Which is really a pretty broad portfolio when you stop to think about it.
DONOHUE: It is but it's sort of eschewing the, you know, entertainment or, you know, sports or how – or you know, you know, like the car section of a newspaper and stuff like that.
MYRLAND: And you're doing that with how many reporters?
DONOHUE: We have ten – ten professional journalists on staff. So if you look at those six areas I outlined, those are all sort of key quality of life issues that face a major city.
MYRLAND: So it's really a pretty small group of folks who are producing this. Is that generally where you think you want to be? Or do you have hopes and/or plans to expand that?
DONOHUE: We have hopes and plans to expand but we don't ever see ourselves trying to recreate the newsroom of the past. I think we saw, like Chris alluded to before, sort of a general consolidation of newspapers. If you look back in San Diego just a couple of decades ago, you had three thriving newspapers and all that sort of consolidation led to one large monopoly in a lot of different cities. So what we see is ourselves being a smaller, more agile, more focused newsroom.
MYRLAND: Now, Chris, I would jump to the conclusion, just as a reader, that you have a broader portfolio in your journalistic ambitions. Seems like on your site you have entertainment, you have sports, you have news. It's more like a daily newspaper, although I think that's an imperfect analogy.
JENNEWEIN: It is. We are striving for a mix and we want to be a number of things. We want to be a – we want to credibly cover what is happening in the news in San Diego but we also want to have fun and we want to look at things from an optimistic point of view. So if you go to our site you'll see a mixture of things like Adam Lambert, San Diego's Idol, you'll see the San Diego Soccers coming back. Yesterday, that was our most popular story. You'll also see hard-hitting news. It's – I think people are looking for a mix. They're looking for variety and they want to see frequent updates. We're striving to change over the site every two hours. People in today's modern office environment, sitting in a cubicle in front of a computer, after making that call, after being in that meeting, they want to log on to a local site, see something interesting, something they can talk to their colleagues about, and we want to provide that.
MYRLAND: Now how many reporters do you have working for you? Or how many people are involved maybe in putting the site together?
JENNEWEIN: It's a very small operation. Right now we have an editorial staff of eight. We have a business side staff that is roughly the same size, eight as well. But we draw on a large number of outside contributors. Some of them are names from journalism in San Diego. It's over two dozen. In addition, we draw on the Associated Press and some local wire services like City News Service. What I think is a common thread, both for us and for Voice of San Diego, is that a small, nimble staff can do things very creatively and can cover things in ways that more traditional media outlets can't. So we're going back to an earlier day in journalism, a more entrepreneurial day, when a small staff worked very hard looking for the latest and most creative angle.
MYRLAND: Now you've taken this to another step with the way you reimburse reporters, right? Can you talk a little bit about that economic model? About how people get paid for some of their work?
JENNEWEIN: Well, I don't want to go into the details. We have several different ways that we reimburse people who are outside of our current staff. I think the fundamental point is, is that we do want to reimburse people fairly for the work they do and it is, in many ways, measured by how much traffic that drives, how popular it is. I think that's becoming increasingly common in the internet industry. Another example is the examiner.com network of websites where there's a very strict payment that's based on traffic. That's another example of before profit network of sites.
DONOHUE: Isn't that a model that you guys use, though? Based on paying writers based on hits?
JENNEWEIN: It's one of the various models that we use, and I don't want to get into all the details. I've just joined as president. This is my third week and I'm, of course, looking at every aspect of the business.
MYRLAND: Well, how do you judge success?
JENNEWEIN: We just success on two factors. Number one, traffic. We're looking to have a significant daily presence in the San Diego online market. And then number two, of course, is traditional profit and loss. The – We're not profitable now but we do have a very specific plan for reaching profitability.
MYRLAND: And then, Andrew, are you – without that profitability measure, you'll still have to have a balanced budget so I assume that's one way you measure success but…
DONOHUE: The most important thing that we use to measure success is the impacts of our stories so when I have a quarterly board meeting and I come in there, the board wants to know what did our stories do? And so we come in and say, well, because of our water coverage, the city was forced to change its policy on water conservation, because of this investigation into this city official somebody was fired and a criminal investigation was started. So that, first and foremost, is the most important. Obviously, we have to balance the budget to keep being able to do that sort of work but it's really the impacts of the stories that we focus on.
MYRLAND: We do have a caller. Lori Hearn from the Union-Tribune wanted to make a comment. And, Lori, welcome to the program.
LORI HEARN (Senior Editor, San Diego Union-Tribune): Hi. Thank you for taking my call.
HEARN: I'm the senior editor at the Union-Tribune for Metro and investigative journalism and I just wondered if Andrew could talk a bit more about the logic behind the funding of – behind the founding of Voice of San Diego. He's said quite often that one of the impetuses for starting the Voice was the need for competition and the fact that public service journalism was not being done in San Diego. And having been the Metro Editor in 2005 when the Voice started, I just wanted to kind of set the record straight by saying in that year, which was one of the most tumultuous financial years for the City of San Diego, in addition to doing rather rigorous beat reporting, we did fifteen investigative pieces that year on the city's finances. Also, as I'm sure many of your listeners recall, our Washington bureau did most of its reporting on the Randy "Duke" Cunningham scandal for which we won the Pulitzer in 2006. So rather than posing a question, I think I'm just trying to somehow set the record straight here.
MYRLAND: Okay, well let's see if we can't put that in the form of a question and I'll take a stab at it since I think that's my job. Andy, what is it that you think was lacking in terms of the ability of the news media in San Diego to really do the investigative reports that you want to do on Voice of San Diego? What was it that was being missed?
DONOHUE: Sure. A couple of points, first of all, the – We're going to look back on this time and understand that, you know, there's a lot of people lamenting the current state of the media and it is sad that these newspapers are shrinking but it was never optimal that there was just one, large news organization in town and so they could never do – they could never get to all the stories that need to be done. So Lori's correct in quoting my statements that I did think that competition was very important and that's exactly what it is. I'm – I've never said that the Union-Tribune was not doing any public service reporting. What I said is our founders believed that there was not enough being done and that there was not enough important work being done. So our founding came about in 2004. All the work she listed came about actually after we were founded, in 2005.
JENNEWEIN: Well, as a longtime employee of the Union-Tribune, let me jump in here as well. I think what we're all saying in many ways is the future is going to be about multiple media outlets, each doing something a little bit different and each uncovering significant stories and having an impact in different ways. And our way at sdnn.com may be in more of a general space. We had a story recently that caused the county to apologize to a gay couple. And maybe with the Voice of San Diego it's more in the traditional area of politics, and maybe it's a different focus for the Union-Tribune. But I think it's – We have a modern media environment that's not going to be dominated by one or two media outlets, there'll be many media outlets out there.
MYRLAND: But, Chris, when you worked for the Union-Tribune and you were in charge of, among other things, the Sign on San Diego, you could draw on a pool of literally hundreds of reporters. And there has to be some advantage to having that kind of bulk and that kind of flexibility. Are you suggesting that there will still be hundreds of reporters but they'll be working for ten or twelve different organizations? Or isn't something lost when we don't have those big organizations like the U-T was?
JENNEWEIN: I don't think size equates with quality in any way. Sdnn.com is a startup and in the startup world, it's – the victory usually goes to the small and nimble. The world of technology is full of smart startups, look at Google, look at Yahoo in its day.
MYRLAND: Well, I don't know, Chris. I mean, we've worked pretty hard at KPBS to build up our small newsroom. I mean, small is nimble is nice but it sure was nice when we were able to get some funding to hire an extra reporter or, a couple of years ago, hire an investigative reporter. So I'm not sure…
DONOHUE: But there is a lot of reason as a consumer of news right now to be optimistic. Lori and I just came from an investigative reporters and editors conference in Baltimore over the weekend and everybody there, the kind of people that do the sort of reporting that is important, I think, to the entire nation all agreed that there's a dawn of a new day right now happening in media and we're going to have a much more healthy ecosystem. For a long time, we had sort of one animal controlling the scene in every major city and now we're seeing more and more startups and it's that sort of competition that's going to make – first of all, everybody better. And it's that sort of competition that's going to serve an entire community better, so I do believe we're going to see a lot more smaller, more nimble organizations competing from a little bit of different angles but, in the end, the community's going to be served better.
JENNEWEIN: And I think one real important aspect of that, we're here on the San Diego State University campus which has a very well known journalism/communications school. And I think the opportunities for those students right now are really inspiring. There's so many good opportunities out there. It's not just about working for a newspaper or a TV station or a radio station, it's about a whole new media world with many outlets.
MYRLAND: Well, in the minute or so we have left, I want to ask just kind of a general question. As a consumer of news and information, how do you think people are going to behave over the next couple of years? Are they going to continue to turn to new kinds of technologies or have we kind of peaked for awhile and now there's going to be a settling out?
DONOHUE: I think we're going to continue to evolve into, you know, who knows how many different things. There might be something even cooler than the internet invented tomorrow. But there'll never be – There will always be a need for good reporting on a community, no matter what.
JENNEWEIN: And I agree. It's always going to be about the content, about the reporting. The devices will change, the way things are formatted will change. Who knows, we may get something even tighter than the 140 characters in a tweet. But the basics, the fundamentals, stay the same. And, you know, I think it's a really wonderful time to be in journalism and to be trying out new ideas.
MYRLAND: Well, on that optimistic note, we'll end. That was Chris Jennewein. He's the president of sdnn.com. And we were also joined by Andrew Donohue, Editor of VoiceofSanDiego.org. You're listening to These Days in San Diego.