Thread by @asymmetricinfo

All right, folks, I have exactly one half hour to Tweetstorm my latest column, and explain just how bad the economics of the media industry are. Subtitle: why you can't have all the awesome free journalism you want and have come to expect. Let's go! washingtonpost.com/blogs/post-par…

Question 1) I read too many sites to pay for subscription to all of them!

Answer: That is a pity, because they cannot afford to give you journalism unless you subscribe, and will go out of business, at which point you won't be able to read them.

Question 2) Okay, I get that. So how about a Spotify/Netflix style service, where we bundle all the subscriptions in one place. Why can't that work?

Answer 2) It can work! Just not at the price you are imagining, which is, I am betting, somewhere around the $20 mark.

To report one column (next week's print column), I have already spent four hours on the phone, more hours doing research, and a really fun-filled weekend with taxpayer files. That's not that unusual.

Someone has to pay for that time, because my bank will not accept mortgage payment in the form of retweets.

And I write opinion! Reported stuff is even more time consuming. For one 2500 word column a month at the Atlantic, I spent 25-50% of my month reporting.

Also I have editors and IT folks and stuff backing me up. All of this costs $$$.

And the thing is, writers like to pay their mortgage *every* month. Editors like to eat *every* day. They don't want to get paid by the click. And you don't really want them to get paid by the click

I know this because you are *constantly* complaining to me about clickbait, and the sites that live on it. That's what news looks like in a Spotify scenario. All of it.

But that's not even the biggest problem.

(See how I hooked you to read the next tweet there? Clickbait. :)

Spotify just isn't working for artists. I mean, it's better than the alternative, which is having your stuff pirated, and getting nothing. But it's not a whole lot better than that.

spinditty.com/industry/why-s…

The difference is that people have always made music as a hobby, for attention and applause, long before there was a music industry. People will do it for love, and for the hope of winning the tournament.

No one's going to cover the USDA for love. (Except some lobbying firm, maybe, but then you're not really going to trust the journalism).

Also, it's really hard to get people to come see you read your reporting at a live event, or buy your t-shirt. We can't use it as a loss leader for ancillary revenue streams.

The craziest thing is, it's not even clear that the Spotify model is working *for Spotify*. It's the most successful model of its kind in the world, and the company's financials are brutal: ft.com/content/974206…

So yeah, I get why you want this. I'd love it to! But the math doesn't work.

And this leads me to a broader point: most people have a seriously, seriously warped view of what stuff is supposed to cost. So when they propose business models, they sound like teenagers talking about how Dad should buy them a car.

I say this with love. I'm guilty too.

RIght now, *huge* portions of your tech consumption are being financed by burning VC money. Uber. Spotify. Many of those new media sites you guys have been telling me "prove" that it is totally possible to do good journalism on a free model.

There have been three big waves of media startups in the last twenty years. The third wave is currently in the "Figure out a business model or close up shop" phase of the cycle.

Making predictions is folly, but here's a prediction: there won't be a fourth wave.

The economics just never got better. We're currently exhausting the last wave of stupid cheap money that is going to flow into this business.

There *are* business models that currently work. But there's no guarantee they work for long--witness the current wave of site shutdowns after a Facebook algorithm switch gutted yet more revenue streams. And they're not big enough to support a lot of broad-spectrum journalism.

The Facebook/Google dominance of ad revenue just keeps getting worse for us, and shows no signs of stopping. And why would it? They've got a captive audience with remarkable micro-targeting capabilities no one else can match.

When the stupid money burns out, it will look less obvious that free works. Just my opinion. But I've had no reason to change it in recent months. The remnants of the first and second waves of media startups are now getting bought for fractions of their peak valuations.

If they are surviving at all. And this is broadly true in lots of categories: eventually Uber is going to have to charge you what it actually cots to deliver a ride, or go out of business. Eventually Spotify will have to make a stable profit, or die.

I am not saying this with triumph! I love Spotify! I love Uber! But math is math, and stupid money runs out.

Over the last 25 years, enormous sums have been spent in the hopes that your investment is the next Amazon/Facebook/Google. But there is a reason there are only three of these names. People are starting to realize that.

And that brings me to the hidden subsidy to much web journalism that no one talks about much: the human capital subsidy.

By way of illustration: a hidden problem with Uber's business model is that, AFAICT, Uber drivers mostly don't do what professional taxi and truck drivers do, and factor in vehicle depreciation as a business expense.

This makes them think that they are making more than they are, an illusion that will be brutally punctured when their vehicle craps out and they have to buy another.

Something similar can be seen in the new media model.

Old journalism HR model: work for an alt-weekly or local paper and work your way up, or maybe stay at the local, not making a great salary, but you're living somewhere cheap & the job is pretty fun.

New media model: Get right into writing opinion/analysis journalism with no boring intervening steps covering the school board at a new media site. Or if lucky, go to work for one of the big legacy outlets, which are few in number.

I was one of the very first creatures of the new media model. I blogged for years, started working for The Economist on the web, and worked my way up to an amazing job courtesy of The Atlantic, Newsweek, Bloomberg, and the Post.

The hours I logged in my early years as a professional blogger were insane. I regularly worked 16 hours a day, 7 days a week. It's not literally true that I never stopped working, but it sure felt like it.

A lot of young journalists today do that to feed the click beast.

The problem is, you can't keep it up. Journalism doesn't pay well enough to outsource your life once you have a family. Also you get old and tired and you just don't have the stamina.

So now we've got new media creating all these jobs that require heroic stamina and no family, and don't pay very well, and also, are almost all located in the four most expensive cities in the country.

And then also a lot of people one rung below this, who do the same, on a freelancer's budget, for even less than the staffers make.

It's not crazy to do, if it's a buy into a tournament where you end up with a stable traditional media job.

Except those publications keep dying. So you're buying a ticket in a tournament with no payoff.

This is not quite clear to a lot of people in the tournament yet. But the more old publications fold/downsize, the clearer it gets.

Which is why, I think, you see so many young left-wing journalists react with utter fury when right-leaning people get jobs at mainstream outlets, and why there is a wave of unionization. Everyone knows this isn't sustainable.

And it won't be sustained. Who wants to buy a ticket to a lottery where the prize is making $42,000 a year for the rest of your life while living in New York City?

Eventually, that subsidy will go away. So will VC subsidy. And we'll see how many new media firms are left standing

Question 3) Isn't this special pleading for your personal interests? You don't have a right to get paid to make journalism the way you always have!

Answer: Dead right, I don't. To be clear, I am not arguing that you have a *moral obligation* to subscribe in order to fund news

I think it would be bad for society in any number of ways if traditional reporting became economic, but I don't think that means it can't happen, or that I or my industry will somehow have been wronged if it does.

My point is just this: the way you love to read news--and the way I love to read news--over the last twenty years has been sustained by a number of subsidies that will not continue indefinitely. If you want to keep reading that stuff, you'll have to pay for it.

If you don't pay for it, you won't get to keep reading it. That would make me sad, obviously, but if it would make you sad, you should invest some money in subscriptions to the publications you most enjoy. Including, I hope, the Washington Post.

Anyway, thanks for sticking with me, and here's the column this Tweetstorm refers to, if you haven't read it already:

washingtonpost.com/blogs/post-par…

Now I'm late to a dinner, so ...

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