Dana Blankenhorn

The Rebirth of Journalism

The business of journalism is to organize and advocate for a defined audience. (To the right, a business journalist as a young man.)

A place, an industry, a lifestyle. That means aggregating a collection of people around a common cause or interest and interpreting the world through their eyes, for their benefit.

Thanks to Google and Facebook, but also thanks to the lack of vision on the part of people running the business, journalism has suffered grievously in the 25 years since the Web was spun. I once asked, in the 1990s, “how hungry are you,” suggesting that newspapers could offer more than billboards along the information highway. They could lead people down the sales funnel, even transact business and help with support, I wrote.

Being a writer, I was ignored. Probably would have been ignored if I were on the business side. Because journalism was divided along functional lines – newspapers, magazines, radio, TV. They had no idea how to deal with this Internet thing.

What journalists still don’t understand today is that the cloud has broken down all the functional lines. There are no more newspapers, no TV stations. Yet web sites run by these companies still act like they are. The New York Times still pretends to be a newspaper covering New York and its suburbs. CNN.Com still pretends it is a cable television network.

The Rebirth of Journalism

The business of journalism is to organize and advocate for a defined audience. (To the right, a business journalist as a young man.)

A place, an industry, a lifestyle. That means aggregating a collection of people around a common cause or interest and interpreting the world through their eyes, for their benefit.

Thanks to Google and Facebook, but also thanks to the lack of vision on the part of people running the business, journalism has suffered grievously in the 25 years since the Web was spun. I once asked, in the 1990s, “how hungry are you,” suggesting that newspapers could offer more than billboards along the information highway. They could lead people down the sales funnel, even transact business and help with support, I wrote.

Being a writer, I was ignored. Probably would have been ignored if I were on the business side. Because journalism was divided along functional lines – newspapers, magazines, radio, TV. They had no idea how to deal with this Internet thing.

What journalists still don’t understand today is that the cloud has broken down all the functional lines. There are no more newspapers, no TV stations. Yet web sites run by these companies still act like they are. The New York Times still pretends to be a newspaper covering New York and its suburbs. CNN.Com still pretends it is a cable television network.

Look Around, Look Around

At times like this, when it seems the political world’s going to hell in a handbasket, it helps to take the long view.

My life is infinitely more comfortable, and will likely be longer, than that of my parents or (especially) my grandparents. I have a large, air-conditioned house, next to a train that will get me to an Airport in under an hour and from which, for under $5,000 round-trip, I can travel to anywhere in the world.

The medicines I take prevented the heart attack that began claiming my father in his 40s. The miracles of our time saved my wife from cancer. The technology I began covering in its infancy, this Internet, has given us both fulfilling and independent careers. Our kids are taking this to the next level, studying ecology and the mechanics of life, so their children’s lives will be even richer than our own.

It’s especially important, at times like this, to understand American history and what drives our politics.

Business drives our politics.

The business of America is business.

The industry, or industries, that provide the most added-value to each generation inevitably winds up controlling our politics. What they do, in their own self-interest, is filtered through the actions of each generation into the genie we call progress.

The Medical Oilpatch

One of the first business stories I covered was the Houston oilpatch, in the late 1970s.

The oilpatch, or the oil exploration industry, has always lived in a boom-and-bust cycle. When I was in my early 20s it boomed, and so did Houston. We were Dubai before Dubai was cool. Then prices busted in 1981 and the city followed.

The oilpatch had another boom early in this decade, with the rise of fracking. The idea is credited to George Mitchell, a man I interviewed while at the Houston Business Journal, and involves shooting water, sand and chemicals down a wellhead to break apart the rock, allowing oil and gas to seep out of the new cracks.

Trump’s War

I’ve been guilty of this myself.

I’ve said that George W. Bush had to have been a worse President than Donald Trump because he lied us into war and Trump didn’t.

Well, Trump did. Trump has. Trump has unilaterally declared a trade war, based on nonsense, and a lot of people are going to be hurt by it.

And it’s all based on lies. (Sculpture by Kimber Fiebiger.)

First. A trade deficit isn’t money you have to borrow. It lowers your cost of goods sold. It’s deflationary and allows you to sell finished products for less than before. It makes the whole global economy more productive and efficient. This idea that we “owe” China for its trade surpluses is, simply, a lie.

Second. Trump is going to war on behalf of industries that deserve to fail. Coal hasn’t been a growth driver since the 19^th century. Steel hasn’t been vital since World War II. Supporting failing industries is bad industrial policy.

Third. Trump is going after China in precisely the wrong way. If he did want to hurt China economically, he would open the H-1B visa floodgates and encourage every Chinese student coming here to remain. What drives economic growth in the 21^st century, as I’ve said many times, is human capital, trained and willing minds. Freedom is our trump card in any conflict with China. Sending them down the demographic cliff while we stay above it, remaining youthful by bringing in the world’s best and brightest, is the only way we’re going to stay in the economic game.

Peak Trump, Peak Carter II: The Health Care Rebellion

Only old reporters and historians now remember the Sagebrush Rebellion, which may have been more decisive in setting our current political course than any other event of the late 1970s.

The Sagebrush Rebellion was a rural revolt on behalf of private property, against the government that still controls most of the land. Before it got going the West was represented by people like Frank Church in Idaho, a liberal firebrand whose name lives today in a 1973 amendment against the Vietnam War.  Mike Mansfield, a Montana Democrat, was the Senate Majority Leader in the 1970s, and even Alaska was represented by Democrat Mike Gravel.

Today, the only Democrats in the Intermountain West and High Plains are “yeah-but” Democrats, people like Heidi Heitkamp of North Dakota, who generally agrees with the principles of the rebellion but argues that, sometimes, like in her election, the Republican is just a little too radical for local tastes.

The modern equivalent of the Sagebrush Rebellion is health care. Democrats use the shorthand Medicare for All.

That 1999 Feeling

For most of the last two years I have felt much as I did in the late 1990s.

Soon after launching a-clue.com, my e-commerce newsletter, in 1997, I began warning of dark days ahead. True, the Internet was cool. Yes, e-commerce was great. But when companies barely have sales, let alone profit, and there are many companies trying to get through the same door, all acting like they’ve gotten through it, and people are still throwing money at all of them, I say nay.

Here’s a life confession. I’m early to any party. I became an avid bike rider in the 1970s. I was arguing with my teachers about what the Internet might mean to the journalism business in 1977. My dear wife was commuting to an office by bike, in sneakers, in 1980, and by train, in Atlanta, starting in 1983. I began telecommuting the same year and became a professional Internet reporter in 1985. I began covering Internet commerce full-time in 1994.

But in 1999 my “spidey sense” was tingling, big time. People were throwing too much at the space, too fast.

When AOL swallowed Time Warner on January 10, 2000, getting 60% of the deal, I knew the jig was up and said so. But I didn’t shift my money away from the space.

As a result, I was as burned as anyone else. In 2002 and 2003 my total income was zero dollars. But I was younger then. I stuck to my guns, found other beats, and today I’m richer than I ever imagined being.

The Daily News

A lot of people are shocked (shocked) about the demise of The Daily News and countless other newspapers across the U.S.

I’m not.

One of the primary obsessions of my 40-year career as a reporter has been journalism business models. How do you get money out of customers and leave yourself a profit? How do you replicate that process so that profits flow constantly through your business?

Northwestern’s Medill School taught that this was simple. You aggregated a group of readers based on their location, their industry or their lifestyle. You served them through your editorial effort. You monetized them by selling access to businesses in the form of advertisements, billboards along your editorial road. The price readers paid was the cost of delivering the paper to them. The editorial effort was paid for entirely by ads.

Even before graduating from Medill, 40 years ago last month, I was focused on the question of how writers and editors might make even more money, for even better work. I knew that the online world would let journalists do more than sell billboards. You can run an entire business here, taking people down the sales funnel, selling them goods or services, then supporting them after the sale. As early as the mid-1990s I was asking publishers, “How hungry are you,” and salivating over the possibilities.

The answer was that they were not very hungry at all. I remember back in late 1995, hiding in the back of an Atlanta Press Club Christmas party, laughing my butt off as Cox Enterprises CEO James Cox Kennedy, whom I’d once interviewed, talked about making easy money online by simply “repurposing” existing content. His naivete was hilarious, because even then I knew, in this new world, publishers would quickly find themselves competing with advertisers.

Stupid on Stupid

Recessions are a little like the Spanish Inquisition

Nobody expects them.

Their chief weapons are fear, surprise, and ruthlessness. They come in when they’re least expected, they do incredible economic damage, but when they’re gone they’re forgotten.

I have seen three recessions during my business career, each one worse than the last.

The 1991 recession wasn’t expected, because we’d just won the war in Kuwait. But we’d also poured enormous effort into our military, which was no longer needed, and it took years to get something sustainable to replace it.

The 2000 dot-com bust certainly wasn’t expected, but I saw it coming in 1997, when I launched my newsletter a-clue.com. I cried bubble for three years, but when it burst I won no prizes. I lost out like everyone else and had zero income in 2002 and 2003.

The 2008 recession also wasn’t expected, although I’d been writing about the “big shitpile” for two years before it exploded all over everyone, taking Wall Street down with it. We might have never gotten out of it but for the leadership of Barack Obama, who used the opportunity to pass a $1 trillion stimulus bill that is still providing economic benefits.

The Next Step in Urban Evolution

When I moved to my present house in 1983, all views of the urban future were dystopian.

Suburbs were the thing. Cities were being consigned to the scrap heap. Atlanta offered a three-bedroom Craftsman bungalow, built in 1923, a few hundred feet from a train station, and with the nicest neighbors you could want, for $49,500.

Today the house is worth over $500,000. We put a lot into it along the way. It’s bigger than it was. The kitchen is huge, with all-new appliances. All the utilities are upgraded. It’s air conditioned.

More important, views of the urban future have reversed. Now everyone loves density, and the city wants to turn the train station’s parking lot into “workforce housing” so people making under $100,000 can live here.

But the assumption that the urban future is golden today is as warped as the attitudes of 1983 were.