Dear Economist; REALLY dear

A truly shocking notion: If your numbers are shrinking from one of your two revenue sources, raise prices for the other revenue source.

Not so shocking perhaps, but we’re talking about the magazine industry. A lot of magazines have been charging subscribers far less per issue than a Starbucks anything, and lowering that price in the hope of getting more subscribers and thus, in theory, higher advertising revenues.

Fast forward: Depression → Ads go poof. So what to do?

They’re suddenly paying attention to … us. As this piece says,

The Economist is leading the charge on expensive subscriptions, and its success is one reason publishers are rethinking their approaches. It is a news magazine with an extraordinarily high cover price – raised to $6.99 late last year – and subscription price, about $100 a year on average. Even though The Economist is relatively expensive, its circulation has increased sharply in the last four years. Subscriptions are up 60 percent since 2004, and newsstand sales have risen 50 percent, according to the audit bureau.

Will it work for others?

Let me tell you how I buy wines.

In normal circumstances, economists talk about something called the price elasticity of demand, because when something gets more expensive, people tend to buy less of of it. But there is a quirky exception. The demand for certain things has an inverse price elasticity. As the price goes up, you buy more of it.

This explains why I, occasionally capable of rationality, have nonetheless found myself reaching for the more expensive of two otherwise indistinguishable bottles of Napa Cabernet Sauvignon. It must be …. better. How do I know? I don’t. The price led (fooled?) me into thinking it.

But: For this to work, the product must be something that is not fungible and that I value intrinsically. Having bad wine at my age is worse than no wine. Ditto my reading time: Reading crap is worse than not reading at all. By contrast, I would not reach for the more expensive of two otherwise indistinguishable rolls of toilet paper.

We may soon find out how the reading public views its news magazines.

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Rebecca, The Economist + The Sartorialist

The Sartorialist, not The Economist

+ Sartorialist, - Economist

I keep thinking about a young lady named Rebecca.

Rebecca was being interviewed in a short video at the beginning of a presentation at an event last week at Stanford University. The folks at the Knight Fellowship had teamed up with the Stanford Design School to explore cutting-edge future scenarios of journalism, and were staging a competition among three teams. Each team was to come up with one potential “next big thing” in media, to make a prototype, and then to present it to a panel of three judges. I was one of those judges.

So Rebecca appeared in that video at the start of the third presentation. She was, I think, an MBA student at Stanford, obviously super-bright and media-savvy, busy, ambitious, and all the rest of it. They asked her what her home page was. It was The Economist. So far so good.

She said a few more of the things that my colleagues and I tend to hear when people first discover that we work for The Economist. You know: global, intelligent, cosmopolitan, and things along those lines. Then Rebecca visibly got bored with her own bullshit.

So how much of The Economist do you actually read? her interviewer asked her.

Hardly anything, it turns out. And now Rebecca held forth: To be honest, she really only has The Economist as her home page because, well, that’s what one does in her circles. But she feels no connection to it at all. To her, the tone is that of some robot-like genteel alien preaching to her about what she should know for the next cocktail party. (As a good sport, I made sure that I was laughing and applauding loudest in the hall, for the record. Which was hard, because the hall suddenly seemed full of Rebeccas.)

Alright, continued the interviewer in the video, in that case, where does Rebecca go (if not, apparently, to her own home page)? She named a few sites. But the one she seems to “depend on” most, currently, is The Sartorialist.

And isn’t there a perfect symmetry to that? Officially The Economist, but really The Sartorialist. A site run by one man who

  • loves his subject–fashion in the world’s cosmopolitan cities
  • takes artful and intimate pictures
  • cares not a hoot about whether anybody agrees with his taste, and
  • is rewarded by a growing and steady following (largely from the same demographic as The Economist‘s) for precisely that authenticity.

On The Sartorialist site, Rebecca feels at home and intimate. On our site, she feels like a guest in some snobby show room, feeling (metaphorically) that she has to hold her pee until she finds a place where she is more comfortable asking for the bathroom.

So that’s what I’m thinking about. Here we are at The Economist–having powwows about the future, basking in our no-bylines eccentricities–while the Rebeccas out there politely keep us as their homepage, then bugger off to some other place that “gets” it. We would be foolish, and soulless, not to pay attention to Rebecca.

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Newspapers and the “unthinkable”

Required reading for all who care about newspapers, journalism and the current revolution (for that is what it is.) By Clay Shirky, whom you have met here before.

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Do not go gentle: The “dying” newspaper


The death metaphor for newspapers: It is everywhere. For example, here, here, here, here, here, here, and here. Even The Economist and The Hannibal Blog have used it.

I suspect this is because journalists (and bloggers are journal-ists too) love crisp, primal metaphors, which usually leads to sex or death, if not taxes.

That said, the metaphor is, of course, utter and silly nonsense. In this post I want to suggest why.

Indulge me with a “brief history of the media”, which comes with an R-rating for subjectivity, exaggeration and incompleteness. My point is only to lead up to a new and better metaphor for what is happening to the news industry.

1) Trojan War (ca. 1200 BCE) to ca 750 BCE

The mainstream media of post-Mycenaean and pre-Archaic Greece live* through their heydey of oral story-telling about the great war. Audiences are captive, attendance is good.

An upstart working in a new medium, Homer, disrupts the industry with great success by writing the stories down. After initial concern about the death of oral story-telling, new and smaller audiences form in every Greek polis whenever Homer’s Iliad is read out loud in the Forum, cheering at the precise point in his  long list of Achaean ships when the local hero is named. A consensus emerges that oral story-telling has changed context but is alive and well, benefiting from the written word.

2) High Renaissance: Gutenberg to Aldus Manutius

The mainstream media of monastic Europe, monks, are living through their heyday, transcribing Aristotle by hand (= manuscript) until lunch and getting sloshed in the brewery downstairs thereafter. Readership is elite, limited and assured. Barriers to entry are high.

An upstart working in a new medium, Gutenberg, disrupts the industry with a new patent. An investment bubble leads to other start-ups such as Aldus Manutius who starts printing not Bibles but paperbacks for the masses. The European clergy warns of the death of the media, with dire consequences for civilization. Within a century, gazettes and books are everywhere, literacy is up, vernacular languages flourish, and a consensus emerges even among monks that their calligraphy, though it has a new context, is as sought-after as ever, as well as entirely sufficient to subsidize the goings-on downstairs.

3) Mid-nineteenth century

The radio industry is in its heyday. Recent predictions that radio would cause the death of newspapers and live orchestra performances have turned out to be wrong, with all media flourishing happily. During “prime-time” (a neologism), entire families gather around a large box in the living room to listen to FDR’s fireside chats.

But a new medium challenges the industry. Called “television“, it abhors the mainstream-media tycoons, to whom it is “half Greek, half Latin: no good can come of it.” The death of radio is announced and widely mourned.

Within a decade, it turns out that radio is more popular than ever, though in a new context. It has moved out of the living room and prime time and into the car during commute times. A new heyday is proclaimed.


Any history of the media suggests that

  • no medium ever dies when a new medium arrives because
  • the old media instead change context–social, spatial, temporal–and live on happily ever after

What metaphor might capture this idea?

  • From geology: sedimentation
  • From Eastern philosophy: reincarnation

Who knows. But death it ain’t!

So the challenge is much less primal and more subtle than our headlines make it seem: to figure out what the new contexts for our old media will be, in order to prepare them for a new heyday.

*Pedant alert: Media is a plural word, medium is the singular.

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Time: you might have sooo much of it

Clay Shirky

Both in my “day job” at The Economist and in my new role as aspiring author, I spend a lot of time thinking about people’s … time. Do people who might read my book when it comes out even have the time to do so? Would they volunteer to spend it reading?

Somebody who makes good sense on the topic is Clay Shirky. He is an NYU professor and consultant and a new-media thinker.

Why do I find his perspective refreshing? First, because he takes a loooong historical perspective to understand our current situation, which is exactly what I do in my book, even though it happens to be about a different topic. So Shirky starts with the “information overload” problem posed by the Library of Alexandria, exacerbated by Gutenberg’s printing press and (wait for the surprise) soon to be solved in our own time.

More to the point: In the talk at the bottom of this post, which I attended, he exposes, with an ironic anecdote, the flaw in the widespread hypothesis that we have too little time to deal with our alleged information overload. He is talking to an American TV producer, who asks him what cool things on the internet he has seen lately. He begins to talk about the fascinating evolution of the Wikipedia page on the planet Pluto. She says nothing, then pops the question:  “Where do people find the time?”

And Clay loses it:  “I just snapped. And I said, No one who works in TV gets to ask that question.” That’s because that time that people find comes in large part out of the “cognitive surplus” you [ie, the TV industry] have been masking for the past forty years!

A short calculation to illustrate his point:

1) All of the articles in all languages of Wikipedia, by Clay’s estimate, took 100 million hours of human thought to compose.

2) Americans watch 200 billion hours of TV a year. They spend 100 million hours a weekend just watching the ads on TV!

So there is actually a huge surplus of thought and creativity, and we are only just discovering how to use it.

A Renaissance of reading?

His thinking extends fluidly to the context that I care more about, book-reading. Shirky is mildly bemused by the widespread fear about the alleged “end” of literary reading.

First, the medium to blame, if any, is not the internet but TV, forty years ago. See above. “What the Internet has actually done,” he says in this interview,

is not decimate literary reading; that was really a done deal by 1970. What it has done, instead, is brought back reading and writing as a normal activity for a huge group of people. Many, many more people are reading and writing now as part of their daily experience. But, because the reading and writing has come back without bringing Tolstoy along with it, the enormity of the historical loss to the literary landscape caused by television is now becoming manifested to everybody.

And so, in twists and turns, you get a lot of the current hysteria about the internet, which emanates not from twenty-somethings on Facebook, who are a lot savvier than their parents ever were, but from those parents who now hold down jobs in, say, the TV industry. They are the new Luddites, like that woman who interviewed Clay. Luddism, he says, “is specifically a demand that the people who benefited from the old system be consulted before any technology is allowed to disrupt it.”

Long story short: Turn off–better: throw away–your TV set; then read my book as soon as it’s published. 😉

Answering questions about The Economist

Margaret Lee, a journalism student at the University of Maryland, has to write an essay for her class on “the future of newsweeklies,” and emailed me some interview questions. I thought that I might as well share her questions and my answers here.

1. How long have you been working for The Economist? What do you like about working for this magazine?

I’ve been working for The Economist for eleven years. What I love most is the people. The Editorial team of about 70-ish writers is like a large, chaotic family, as I was reminded again this week when we gathered here. I like the open-minded and inquiring culture, the pervasive irony, the informality and quirkiness….

2. The Economist has increased circulation and added advertisers when the opposite has been happening to Time and Newsweek. To what do you attribute to The Economist’s success in the era of 24-hr news on the web? Do all newsweeklies need to go niche to be successful?

We are a very unusual, perhaps strange, magazine and culture. And we are unapologetic and un-selfconscious about this eccentricity. Our best-known idiosyncrasy is that we have no bylines, but there are many others. We often and in many ways defy trends. For instance, we “spend little time worrying about what readers might want,” as Clive Crook, our former deputy editor once put it. Instead, we write what we think should be written. With that attitude, I think, comes a certain authenticity that readers recognize and appreciate.

Are we “niche”? I don’t know. Not as niche as many blogs or special journals that go deep without being broad. But a lot more niche than some mainstream publications, which are broad without being deep. My feeling is that authenticity is a bigger factor in success than niche-ness, but the two often go together.

3. US News also recently went digital. What do you think of this transition? Will it enable the magazine to survive?

I couldn’t possibly say. Not because I’m being diplomatic and coy, but because I have no idea. It depends on what they do next.

4. What role does The Economist’s website play? Is this role similar or different to the role of Time or Newsweek’s websites?

Well, this is the main topic that we just discussed this week at a powwow in the English countryside. Thanks to the success of our print edition we are in the unusual and strategically valuable position of having time to think it through and to let others make mistakes. Nobody in the industry today has figured out a demonstrably lucid answer to your question. But I think it is obvious that over the coming years both the web site and the print edition will change to find different but complementary roles.

There are some obvious differences: Reading the paper edition is a “lean-back experience”, whereas being online is a “lean-forward experience”. Paper can not make sounds or play video, but the web site (and iTunes, where we are big) can. Paper gives you one issue at a time, whereas the web site can, in theory, give you all 160 years’ worth of articles, which can be searchable, sharable and linkable.

These are statements of fact. That said, there are some things in the works that will be of interest to you in the coming year, but I can’t say more at this point. Sorry to remain somewhat vague.

5. Time and Newsweek have been revamping their print editions and website. What changes have you noticed and do you think they were the right move?

In this case, I could comment but prefer not to. They have very smart people, and we will pay attention to what they do. But–and this is important–I don’t want you to go away with the impression that Time and Newsweek are our main rivals. They are not.

Who is? This is a subtle question. We are in 208 countries. In each country we compete with a) magazines and newspapers, b) radio and television to some extent, and c) the web. In America, readers in our segment are more likely to read the New York Times, the Wall Street Journal, the New Yorker, The Atlantic and Wired than Time and Newsweek. Even Forbes and Fortune and Business Week are not direct comparisons (they are business magazines, whereas we, despite some impressions to the contrary, cover everything).

Ultimately, we all compete against time. Not the one with the capital T but the other one. Our readers in particular tend to have too little of it (ie, time). What might a demanding person choose to do on, say, a weekend? Family. Exercise. Culture. Books. Somewhere we want to fit into this. And that should be rewarding for our readers. Again, you would be surprised how little we worry about what other magazines might be up to.

6. What are the The Economist’s current goals for the near future and how is the magazine working to achieve them?

1) To weather the current economic crisis, which is a recession and might become a depression, and which is likely to hit advertising even harder than other industries. We can be disciplined about costs, but ultimately we can do little more than to keep writing good articles.

2) To figure out the ultimate and precise answer to your question about our web stragegy. This, in contrast to the previous point, is within our power. But I can’t say more.

7. Will there always be a place for print newsweeklies? What do you hope to see?

Yes. The lesson from media history, going back to Gutenberg, is that no “old” medium ever disappears because a newer medium arrives. Instead, the old media change context. (Individual media companies may disappear, of course, but not the medium as such.)

One example: The context of radio used to be a) in the living room and b) during prime time, with the family gathered around a big box. Think of FDR’s fireside chats. Then television came along, a strange new thing that was “half Latin and half Greek” and would surely kill radio off. Well, it didn’t. Instead, radio entered a new golden age, by moving into a) the car during b) the commute hours.

The challenge is therefore not about gracefully preparing for death but about thinking clearly about how the context of magazines is changing and then adjusting.

Into a Golden Age of story-telling

Indulge me for a moment as I take a quick detour away from the book and book-writing as such, and zoom out to story-telling in general, with one interesting anecdote.

I was having lunch with Andrew Haeg, a radio journalist at American Public Media who is now doing research at Stanford about the future of journalism. We were sitting there at Chez Panisse (tough life, I know), brainstorming about citizen journalism, audience participation, media fragmentation, the blogosphere and the “mainstream” media, and so on. I’ve been thinking on and off about these things since I wrote a big report (starting here) in The Economist about it, over two years ago. Andrew will be thinking full-time about it for the next year.

A minor epiphany occurred when Andrew began a sentence saying something like: “Yeah, but the best story on the sub-prime crisis….”

I interrupted him to complete his thought: “…. was that episode in This American Life, right?” Why, yes, said Andrew, that’s what I was about to say.

Now, I had not even listened to the episode at that point! But my wife had recommended it to me a few days earlier. And in one instant, using old-fashioned (offline) social networking, I had saved myself hours of hard work and boring reading, because I knew that I was going to go home and listen to that particular episode. If two people in my social circle independently recommend the same story-teller, I would be crazy not to take the hint.

Insight Nr 1): Great stories well told eventually find their audience.

How? Through the recommendation network of our social networks, just as in the past.

The “new media”, from Facebook to blogs, by expanding our social recommendation circles from the merely offline to the off-and-online, make these introductions between story-tellers and audiences even more fluid.

Case in point: I noticed a status update from my friend Michael Fitzgerald on his Facebook page about how he was reading Norse myths to his spellbound kids. I immediately badgered him for which particular story-teller he was reading from, and now I am ordering the book.  No sense wasting my time with the bad version.

The new media, in other words, not only do not hurt traditional story-tellers, but they positively help them, provided that ….

Insight Nr 2) … provided that the story-telling is actually good.

What did I find when I got home and listened to that episode in This American Life? Everything that Ira Glass, the show’s host, and his team are so good at:

  • The complex made simple.
  • Character! Colorful, richly painted individuals who found themselves involved in a global financial disaster.
  • Scene. Sound-painted place and context to reinforce the characters.
  • Plot. A story-line that connected this unlikely combination of individuals and thereby–effortlessly, en passant–explained a fiendishly complex subject.
  • Humor and, yes, irony (see my earlier thoughts on irony here)
  • Empathy (rather than judgment) for the characters
  • Suspense

In short, I found what great story-tellers have always provided. No change.

Insight Nr… Hypothesis: New media disrupt short-form but not long-form story-telling

YouTube has forever changed the genre of short video clips. Blogs have forever changed the genre of short text news and opinion. If you were a traditional story-teller producing short video clips or short news or opinion articles, you need to change and enter the great, gushing Haiku stream of the new media.

But longer stories? We all gladly exit the stream, get cosy, and enjoy a long story well told. A two-hour film, a 200-page book, a one-hour podcast. It’s not the medium (text, audio, video) that matters, but the experience. Lean-forward versus lean-back. Eager to be interrupted versus eager to be immersed.

As the short-form media improve the introductions between story-tellers and audiences, the golden age of story-telling seems to have just begun.

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