Why journalists deserve low pay

The demise of the news business can be halted, but only if journalists commit to creating real value for consumers and become more involved in setting the course of their companies.

Journalists like to think of their work in moral or even sacred terms. With each new layoff or paper closing, they tell themselves that no business model could adequately compensate the holy work of enriching democratic society, speaking truth to power, and comforting the afflicted.

Actually, journalists deserve low pay.

Wages are compensation for value creation. And journalists simply aren't creating much value these days.

Until they come to grips with that issue, no amount of blogging, twittering, or micropayments is going to solve their failing business models.

Where does value come from?

Moral philosophers differentiate intrinsic and instrumental value. Intrinsic value involves things that are good in and of themselves, such as beauty, truth, and harmony. Instrumental value comes from things that facilitate action and achievement, including awareness, belonging, and understanding. Journalism produces only instrumental value. It is important not in itself, but because it enlightens the public, supports social interaction, and facilitates democracy.

Economic value is rooted in worth and exchange. It is created when finished products and services have more value – as determined by consumers – than the sum of the value of their components.

To comprehend journalistic value creation, we need to focus on the benefits it provides. Journalism creates functional, emotional, and self-expressive benefits for consumers. Functional benefits include providing useful information and ideas. Emotional benefits include a sense of belonging and community, reassurance and security, and escape. Self-expressive benefits are provided when individuals identify with the publication's perspectives or opinions, or when they're empowered to express their own ideas.

These benefits used to produce significant economic value. Not today. That's because producers and providers have less control over the communication space than ever before. In the past, the difficulty and cost of operation, publication, and distribution severely limited the number of content suppliers. This scarcity raised the economic value of content. That additional value is gone today because a far wider range of sources of news and information exist.

The primary value that is created today comes from the basic underlying value of the labor of journalists. Unfortunately, that value is now near zero.

The total value is the value of content plus the value of advertising. However, advertisers don't care about journalism – only the audience that it produces. Thus the real measure of journalistic value is value created by serving readers.

What are journalists worth?

Economic outcomes have traditionally held low priority for journalists. That's got to change.

Journalists are not professionals with a unique base of knowledge such as professors or electricians. Consequently, the primary economic value of journalism derives not from its own knowledge, but in distributing the knowledge of others. In this process three fundamental functions and related skills have historically created economic value: Accessing sources, determining significance of information, and conveying it effectively.

Accessing sources is crucial because information and knowledge do not exist as a natural resource that merely has to be harvested. It must be constructed by someone. The journalistic skill of identifying and reaching authorities or others who construct expertise traditionally gave journalists opportunities to report in ways that the general public could not.

Determining significance has been critical because journalists sort through an enormous amount of information to find the most significant and interesting items for consumers.

Effective presentation involves the ability to reduce information to its core to meet space and time requirements and presenting it in an interesting and attractive manner. These are built on linguistic and artistic skills and formatting techniques.

Today all this value is being severely challenged by technology that is "de-skilling" journalists. It is providing individuals – without the support of a journalistic enterprise – the capabilities to access sources, to search through information and determine its significance, and to convey it effectively.

To create economic value, journalists and news organizations historically relied on the exclusivity of their access to information and sources, and their ability to provide immediacy in conveying information. The value of those elements has been stripped away by contemporary communication developments. Today, ordinary adults can observe and report news, gather expert knowledge, determine significance, add audio, photography, and video components, and publish this content far and wide (or at least to their social network) with ease. And much of this is done for no pay.

Until journalists can redefine the value of their labor above this level, they deserve low pay.

Well-paying employment requires that workers possess unique skills, abilities, and knowledge. It also requires that the labor must be non-commoditized. Unfortunately, journalistic labor has become commoditized. Most journalists share the same skills sets and the same approaches to stories, seek out the same sources, ask similar questions, and produce relatively similar stories. This interchangeability is one reason why salaries for average journalists are relatively low and why columnists, cartoonists, and journalists with special expertise (such as finance reporters) get higher wages.

Across the news industry, processes and procedures for news gathering are guided by standardized news values, producing standardized stories in standardized formats that are presented in standardized styles. The result is extraordinary sameness and minimal differentiation.

It is clear that journalists do not want to be in the contemporary labor market, much less the highly competitive information market. They prefer to justify the value they create in the moral philosophy terms of instrumental value. Most believe that what they do is so intrinsically good and that they should be compensated to do it even if it doesn't produce revenue.

A century and half ago, journalists were much closer to the market and more clearly understood they were sellers of labor in the market. Before professionalism of journalism, many journalists not only wrote the news, but went to the streets to distribute and sell it and few journalists had regular employment in the news and information business. Journalists and social observers debated whether practicing journalism for a news entity was desirable. Even Karl Marx argued that "The first freedom of the press consists in it not being a trade."

Adapt or die

If the news business is to survive, we must find ways to alter journalism's practice and skills to create new economic value.

Journalism must innovate and create new means of gathering, processing, and distributing information so it provides content and services that readers, listeners, and viewers cannot receive elsewhere. And these must provide sufficient value so audiences and users are willing to pay a reasonable price.

If value is to be created, journalists cannot continue to report merely in the traditional ways or merely re-report the news that has appeared elsewhere. They must add something novel that creates value. They will have to start providing information and knowledge that is not readily available elsewhere, in forms that are not available elsewhere, or in forms that are more useable by and relevant to their audiences.

One cannot expect newspaper readers to pay for page after page of stories from news agencies that were available online yesterday and are in a thousand other papers today. Providing a food section that pales by comparison to the content of food magazines or television cooking shows is not likely to create much value for readers. Neither are scores of disjointed, undigested short news stories about events in far off places.

Some news magazines have confronted the issue and are already changing and trying to provide unique news content. Newsweek has moved away from creating a compendium of events to a publication that explores the issues and implications of events and trends. US News & World Report has emphasized its consumer review and rankings activities.

Daily newspapers don't have quite as much leeway with content but they can emphasize uniqueness. The Boston Globe, for example, could become the national leader in education and health reporting because of the multitude of higher education and medical institutions in its coverage area. Not only would it make the paper more valuable to readers, but it could sell that coverage to other publications. Similarly, The Dallas Morning News could provide specialized coverage of oil and energy, The Des Moines Register could become the leader in agricultural news; and the Chicago Tribune in airline and aircraft coverage. Every paper will have to be the undisputed leader in terms of their quality and quantity of local news.

Finding the right formula of practice, functions, skills, and business model will not be easy, but the search must be undertaken.

It is not just a matter of embracing uses of new technologies. Journalists today are often urged to change practice to embrace crowd sourcing, to search specialty websites, social networks, blogs, and micro-blogs for story ideas, and to embrace in collaborative journalism with their audiences. Although all of these provide useful new ways to find information, access knowledge, and engage with readers, listeners, and viewers, the amount of value that they add and its monetization is highly debatable. The primary reason is that those who are most highly interested in that information and knowledge are able to harvest it themselves using increasingly common tools.

Finding the rights means to create and protect value will require collaboration throughout news enterprises. It is not something that journalists can leave to management. Journalists and managers alike will need to develop collaboration skills and create social relations that make it possible. Journalists will also need to acquire entrepreneurial and innovation skills that makes it possible for them to lead change rather than merely respond to it.

The demise of the news business can be halted, but only if journalists commit to creating value for consumers and become more involved in setting the course of their companies.

Robert G. Picard is a professor of media economics at Sweden's Jonkoping University, a visiting fellow at the Reuters Institute at Oxford University, and the author and editor of 23 books, including "The Economics and Financing of Media Companies." This essay is adapted from a lecture Professor Picard gave at Oxford. He blogs at http://themediabusiness.blogspot.com/

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