I was frustrated by newspapers’ glacial transition to the web. Now I wish we could turn back the clock.
Itwas the summer of 2005, and I was a new college grad filled with anticipation and glee as I packed for the long trip from my childhood hometown to my brilliant, prosperous, tech-savvy future.
I’d been recruited for an internship at one of the nation’s Top 20 papers, thanks in large part to a line on my resume that touted my web development skills, which had started as a hobby and grown into a series of freelance gigs in high school and college. The newspaper industry was in an uproar because of the emergence of aggressive, low-overhead, web-based competitors, and the old guard of journalism was eager for anyone who could help. My web skill set allowed me to leapfrog my peers to bigger, better job opportunities, and I was eager to join the Internet revolution.
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And so goes the frustrating, backward logic of the journalism paywall. It’s the most popular income idea to arise since the newspaper industry was flooded with low-budget competitors, and it seems like the last best hope for profits as Google and Facebook strangle independent advertising sales.
It’s also a fundamentally flawed business model that goes against the best interests of journalists and their readers, and for the most part, it’s doomed to fail.
Just a year ago, GE was the poster child for corporate transformation, turning jet engines into digital data, running whimsical ads that attracted top tech talent to the century-plus old industrial giant. Today, the company’s stock has plummeted, its top executives have all been canned, and the new CEO is promising the kind of austerity only a corporate raider could love. So what happened? To be honest, it’s not clear. At some point, the full GE story will be written, but that day is not today. Today GE announced its plan to respond to Wall Street criticism, including cutting its dividend for the second time since WWII. Money quote: “GE is the worst-performing Dow component this year, down 35 percent through Friday’s close. GE stock has effectively been dead money since September 2001, when recently retired Chief Executive Jeff Immelt took over, posting a negative total return even after reinvesting its juicy dividends.”
The contradictions are rife in the FCC’s latest regulatory framework, and did Justice seek revenge on CNN?
In a New York Times OpEd (apparently he’s OK with purveyors of “fake news”), FCC Chair Ajit Pai makes a case for loosening rules that bar cross ownership of print and broadcast media assets. And on its face, his arguments make sense. But look closer. Pai is arguing that the Internet provides more diversity of views, and that when a TV station owns a paper, the community gets more investment in news gathering, reporting, and coverage. Maybe, but he’s ignoring the real issue at hand: That “diversity of views” so dear to past regulators is pretty much dead and buried on the Internet, where filter bubbles, marketing algorithms, and sophisticated information warfare ensure most Americans see only what they already believe, and ownership is concentrated beyond anything we’ve seen in the offline media world. And guess what? Earlier this year, the FCC shrugged off responsibility for any regulatory power over the Internet. Money quote: “In 2003, this newspaper noted on its editorial page that “making the argument that the current rules are outdated is easy.” The case is even stronger today. Few regulations are more disconnected from today’s realities than the F.C.C.’s media ownership rules.”
Did President Trump ask the Department of Justice to punish CNN by forcing AT&T to divest the news network so its acquisition of Time Warner would be approved? Sounds nuts, but that’s exactly the kind of thing our current president seems capable of doing. AT&T isn’t taking this one lying down, and is threatening to sue. Now that’s a court case I’d like to see! Money quote: “Randall L. Stephenson, AT&T’s chief executive, said on Wednesday that he had never offered to sell CNN. On Thursday, appearing at The New York Times’s DealBook conference, he said the company was ready to go to court against the Justice Department.” Counterpoint: Tim Wu argues blocking the deal might be a good idea.
Read this. It really nails Zuck, and we’re going to be living with this guy for, well, pretty much the rest of our lives. Money quote: “Throughout the interview, he seems irritated that his actions could be viewed as anything other than expansive benevolence.”
Kellogg’s pulled its ads from Breitbart News, the fringe-right news site. Breitbart is famous for headlines like “Bill Kristol: Republican Spoiler, Renegade Jew” and “The Solution to Online ‘Harassment’ Is Simple: Women Should Log Off” — as well as for being a center of support for team Trump, whose head coach, Stephen Bannon, is Breitbart’s chairman. Now Breitbart is fighting back with a shrill campaign to boycott Kellogg’s (Variety).
If you think this is just a media-biz kerfuffle, think again: It’s more a marker of the end of the era in which brands could stand above the U.S.’s increasingly well-defined political and cultural divides and avoid taking sides. Breitbart claims that Kellogg’s is practicing “un-American” “economic censorship.” Kellogg’s says its decision is not about politics at all but about the company’s values.
(To be fair, in re-reading your post, I notice you didn’t ever come out and say Facebook didn’t deserve part of the blame. Like I said, people tell me you’re a good guy. I suspect you know that Facebook does bear some responsibility after all.)
The real reason Wells Fargo’s CEO had to go. Why did Wells Fargo CEO John Stumpf lose his job while so many other banking bosses never paid a price for their company’s malfeasances during the financial meltdown? In Slate, Helaine Olen argues that the Wells scandal, unlike the mortgage-finance fiasco, involved easily comprehensible bad behavior. Derivatives and credit-default swaps are tough to understand. Opening fake accounts without people’s permission? Easier. Stumpf’s old-school blame-throwing and responsibility-ducking didn’t help him. The Wells story gives us one more reminder that if your desk is where the buck stops, don’t try to duck.
What we can learn from Zenefits vs. Gusto. Zenefits was a hard-driving startup that provided software for human-resources management and that was growing like crazy until it smashed into a wall. The revelation that Zenefits had created a tool for salespeople to cut corners on insurance-licensing requirements toppled the firm’s founder and left the company in crisis. Now it’s seeking a comeback (Farhad Manjoo in The New York Times), promising more transparency and a revamped product. But while Zenefits was doing its move-fast-and-break-things act, a smaller competitor named Gusto that provided similar services took a slower, less flashy route, emphasizing trust over meteoric growth. Now Zenefits is desperately trying to persuade the marketplace to give it a second chance — while Gusto snaps up some of its customers. This story is as close as we may ever get to a controlled lab experiment in the long-term value of business ethics. The findings are exactly what you’d expect: Playing fast and loose just doesn’t pay.