Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

What Happens if the Old Media Dies Before the New Media Learns to Walk?

Posted by Tom Foremski - September 9, 2008

For nearly four years I've been warning about huge changes in the media world and why the old media can't make it into the new media world.

There is an American expression that I love to use: "You can't get there from here." It seemingly doesn't make sense but it makes perfect sense in this context.

You can't get there from here. When I left the Financial Times four years ago to become the first journalist to leave a top newspaper job to become a "journalist blogger" I could see the economic model of the old world, and the new economics of new media.

I could see that pageviews and clicks could barely support me--a chap with a laptop and a cell phone. How could the economics of the new world support the legacy cost structure of the old, with its office buildings, printing presses, pension plans, etc?

I could also see that the transition of the media's business model would be tremendously disruptive. And that this disruption would accelerate over the the next few years, as indeed has happened.

I asked then, and I ask now: What happens if the old media dies before the new media learns to walk?

What will happen to journalism and to the hundreds of years of best practices created since newspapers were born from Guthenberg's moveable type machine, if old media can't transition to the online Movable Type of the new media world?

And it won't be able to transition. Because the economics of new media -- pageviews and clicks -- can't support it.

New media is defined by a machine-based economic model. It is cheaper to plug in a bank of servers and run software to publish content than it is to hire editors, manage journalists, and carry all the other employee related expenses of healthcare, pensions, offices, etc.

Google is machine-based media. It uses servers and software to harvest and publish content and then sell advertising around it.

Google and other machine-based media companies such as Yahoo, AOL, etc can cover their costs by selling ads cheaply. And that's what sets the price of online advertising--machine-based media companies.

Media companies that require people to generate their content can't compete. Their costs are far higher than machine-based media companies--yet they have to sell their online advertising at the same rates.

That's why "You can't get there from here."

What happens if the old media dies before the new media learns to walk?

It won't be pretty. It'll be ugly and we'll have to relearn our best practices. And there will be considerable damage done to society.

But it is not just media companies that are at the center of this disruptive tempest. Many new startup companies are in the cross hairs too.

(Continues here...)

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