‘A New Golden Age for Media?’ Annotated

My latest Atlantic column, headlined “A New Golden Age for Media?” online and “Start the Presses!” in the May print edition, is about how newspapers made money back before they became profit-spewing monopolies — the idea being that the future of the news media will probably look more like that than what media people got used to over the past half century.

I relied on a bunch of books in writing the piece, but only had room to mention two. And while it is possible to insert links into Atlantic print articles, the last time I tried it didn’t stick, and I was in rush this time so I didn’t bother. So here are the links and other annotations I would have liked to include.

pmarca twitterFirst, to the left, is a screen shot of the beginning of Mark Andreessen’s Twitter list of the ways digital media companies can make money (read it from bottom to top). He was later nice enough to compile these and a zillion other media-related tweets in one handy blog post.

Andreessen’s tweeting didn’t inspire me to write the piece — that was Atlantic deputy editor Don Peck’s idea — but it certainly helped organize it.

I mention two books in the column, Richard John’s Spreading the News: The American Postal System from Franklin to Morse and James McGrath Morris’s Pulitzer: A Life in Politics, Print, and Power. They’re both pretty great.

Spreading the News is based on John’s doctoral dissertation, so it’s academic. But it’s good academic, offering lots of I-did-not-know-that moments, plus a framework for understanding why U.S. communications networks developed the way they did. John continues the story in Network Nation: Inventing American Telecommunications, which I cited in a previous Atlantic column. By the number of reviews the two books have gotten on Amazon, it appears that they haven’t attracted a general readership. They should. They’re both relevant to current issues such as the troubles of the USPS and the monopolization of broadband, they’re not hard to read, and they change how one sees the world.

John begins Spreading the News with a quote from Alexis de Tocqueville’s 1831-1832 travel journals, subsequently published as Journey to America:

There is an astonishing circulation of letters and newspapers among these savage woods … I do not think that in the most enlightened rural districts of France there is intellectual movement either so rapid or on such a scale as in this wilderness.

John points out that a few years later in Democracy in America, Tocqueville quantifies this observation, showing that postal revenue per person is higher in backwoods Michigan and Florida than in the Departement du Nord, “one of the most enlightened and manufacturing parts of France.” The Frenchman also offers this wonderful assessment of the inhabitants of the rude wood huts of America’s frontier:

Who would not suppose that this poor hut is the asylum of rudeness and ignorance? Yet no sort of comparison can be drawn between the pioneer and the dwelling which shelters him. Everything about him is primitive and unformed, but he is himself the result of the labor and the experience of eighteen centuries. He wears the dress, and he speaks the language of cities; he is acquainted with the past, curious of the future, and ready for argument upon the present; he is, in short, a highly civilized being, who consents, for a time, to inhabit the backwoods, and who penetrates into the wilds of the New World with the Bible, an axe, and a file of newspapers.

But I digress.

Morris’s Pulitzer is an entertaining, engrossing biography. So is David Nasaw’s The Chief: The Life of William Randolph Hearst, the source for most everything Hearst in the column. The stuff about James Gordon Bennett came mainly from Richard Kluger’s The Paper: The Life and Death of the New York Herald Tribune, a book I read back when it came out in 1986, and loved. I even visited Kluger at his house near Princeton and I thought I had written up the interview for The Daily Princetonian, but I can’t find the article in the archives. This recent Prince article about Kluger looks pretty cool, though.

Most of the other information about how newspapers made money in the 19th century came from Gerald Baldasty’s The Commercialization of News in the Nineteenth Century, which is not exactly a fun read, but is full of useful facts. My brief mention of radio’s success as an advertising medium was based on a skimming of Laurence Bergreen’s Look Now, Pay Later: The Rise of Network Broadcasting, which looked pretty interesting although I was mainly just digging for numbers. Such as, 1931 advertising revenues for the main radio networks and a couple of leading magazines:

  • Saturday Evening Post, $35 million
  • NBC, $25.9 million
  • Ladies Home Journal, $12.8 million
  • CBS, $11.6 million

For the rest of the 1930s, revenues just kept rising for the radio networks while they presumably stagnated or even fell at the magazines. NBC and CBS, Berggreen wrote, “were purveying a commodity desperately needed by a Depression-ravaged nation: free entertainment.” ABC, by the way, wasn’t created till 1943, after the FCC ordered NBC to divest a big chunk of its operations and the man behind Lifesavers candies, Edward J. Noble, bought it.

Still, print publications could make tons of money even in the broadcast era. The quote from Warren Buffett about newspapers gushing profits comes from Berkshire Hathaway’s 2006 shareholder letter. Sandwiched between the two sentences I quoted in my column was this:

As one not-too-bright publisher famously said, “I owe my fortune to two great American institutions: monopoly and nepotism.”

Buffett then launches into an extended (it starts on page 11 and takes up all of page 12) and very good explanation of why newspapers used to be a great business but aren’t anymore. It’s too long to quote, so just read the letter. Fun bonus: Margaret Sullivan, now the excellent public editor of The New York Times, rates an admiring mention.

Finally, while my Atlantic piece was in the editing process, Buzzfeed founder Jonah Peretti posted a fascinating memo to staff in which he too compares the current media environment to that of before 1950. At one point he writes:

These days, media companies don’t have natural monopolies or oligopolies where one or two newspapers dominate a local market or a handful of broadcasters are the only options on a limited dial. There is more competition, the market is more fragmented, and gatekeepers have less power. Advertisers have more ways to reach consumers so they aren’t as dependent on publishers and can negotiate lower rates. In fact, some smart people in our industry don’t think it is possible to build a huge new media company anymore, that the golden age is over, and that all the growth now will be limited to pure technology companies.

Which is basically the argument of my column, although I wouldn’t say it’s impossible to build a media empire, just really, really hard. “This pessimistic view is wrong,” Peretti continues,“because it is focused entirely on what has been lost (monopoly pricing power, etc) and ignores what has been gained. This is a common psychological trap: People tend to be overly focused what is lost, while under-appreciating gains.”

The gains Peretti sees have to do with technology, scale, and diversity of talent. I totally get how those three factors all help Buzzfeed now. And I wouldn’t put it past Peretti to become the new Henry Luce. I wouldn’t bank on it either, though — and I really wouldn’t bank on Buzzfeed continuing to thrive long after Peretti and Ben Smith have retired, as Luce’s Time Inc. did. But then I do prefer history to futurism, which I guess makes me a backward-looking guy.

One thought on “‘A New Golden Age for Media?’ Annotated

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s