Is Corporate Media The New Funding Model For Serious Journalism?
As the business models for serious journalism continue to erode where will we get the quality media we need as a society to make important decisions about our future?
I've been warning people: "Special interest groups will gladly pay for the media they want you to read, but you won't pay for the media you need to read."
Software engineers have a saying: GIGO, garbage in, garbage out.
If you start with garbage data you will get a garbage result. That's the future we are heading towards, a future where our media is corrupted with information that serves the goals of special interest groups.
Take a look at Australia where multi-billionaire mining magnate Gina Rinehart has been trying to acquire Fairfax Media, publisher of top newspapers, in a bid to counter anti-mining forces. We'll see more of that as newspapers and other traditional media continue to weaken.
Without our gatekeepers, able to spot corporate spin and BS, how will we make the right decisions about things such as the economy, environment, education, energy, ecology, elder healthcare...
And that's just the issues that begin with the letter 'e.'
Could corporate media be the answer to the funding problem for serious journalism?
My fellow panelists at the recent Holmes Report Global PR Summit were John Earnhardt, head of corporate communications at Cisco (Cisco is my original inspiration for 'every company is a media company'), Jesse Noyes from Eloqua, and Simon Sproule, head of global marketing at Nissan Motor Co., with Morgan McLintic from Lewis PR as the moderator.
Morgan had chosen the panelists well because Cisco and Nissan provided two contrasting models of corporate media producing great journalism.
Cisco has a large team of journalists producing articles about the tech industry for its online magazine "the network." John Earnhardt said that the reporters have just two rules to follow: "Don't write about competitors, and don't write anything that could harm Cisco."
At Nissan Motors, the company has built a full scale TV studio and produces a news program with veteran journalists from the BBC and elsewhere.
It produces news stories that sometimes feature its competitors, and it doesn't shy away from controversial subjects such as Chinese protestors smashing up Nissan cars and other Japanese cars, in response to the dispute over the nationality of remote islands in the South China Sea.
It's an extremely bold move for corporate media to engage in highly charged, highly controversial subjects. And because of that, Nissan represents the leading edge in the rise of corporate media.
Its news programs are designed to be indistinguishable in content and quality from that of traditional news organizations.
Mr Sproule admits it is hard work," We are building the plane as we are flying it."
I asked Mr Sproule, why does Nissan want to get into the business of serious news journalism? Why not sponsor an existing news show?
His answer was surprising. "I don't have the confidence that traditional news organizations will be able to survive the transition to the new business models. Why should I invest large amounts of money over the next few years in a failing enterprise?"
Taking Nissan marketing money away from traditional media will surely hasten that decline but I can understand his position.
Despite the steep learning curve, Nissan is pleased with the audience it is attracting and it plans to expand into sports coverage next year.
Ultimately, both Nissan and Cisco will be judged on how many cars or network equipment they sell. And here, there is a very important distinction to be made compared with traditional media.
Earlier this year when I asked John Earnhardt how's the traffic to Cisco's "the network" online magazine? He said it was good, but that he would be happy if it made a difference to just one person.
I was incredulous, one person? Yes, he said, if that person controls a $100 million budget and chooses Cisco then that will more than pay for the costs of its corporate media venture.
(Nissan says it measures its news program success in audiences of millions but it acknowledges it ultimately is judged by how many cars it sells.)
This made me realize that the business model for corporate media has a massive advantage over traditional media where success has to be measured in an audience reach of tens of millions.
Media is a loss leader, you need something else to sell. If all you have is media to sell, then you will have losses.
That's why traditional media has large losses, it has nothing else to sell.
We are moving into a world where corporate media is on the rise because of the decline in traditional media businesses.
Corporate media is dabbling in the production of serious journalism with an important advantage: it just needs to reach enough people that will buy its products, and that will more than cover its operating costs.
- How can traditional media businesses compete? How will they finance their operations from digital business models that require massive audiences to be viable?
- Can corporate media can generate serious journalism? Yes, we've seen it can. Corporations have valuable brands to protect, they will be highly motivated to produce high quality media.
- Could corporate media win a Pulitzer prize? Why not? I can easily imagine a world where corporations compete with each other to produce great investigative journalism.
Clearly, it would be preferable if we our serious journalism originated from an independent third party but that's not looking like an option. Traditional media organizations continue to struggle to transition to the digital economy.
Cisco, Nissan, and a few others, like Intel, could very well be the early prototypes for the future of high quality journalism, and provide an extremely valuable service to society.