The News Industry Isn't Dead... But Has 1 Foot In The Grave

Tyler Durden's picture

Journalism and investment research have a lot in common, notes ConvergEx's Nick Colas; after all, both essentially ask the customer to freely part with three scarce resources: time, attention and money. It’s been a tough decade or two for both the newsroom and the research department in that effort, but at least one prominent venture capitalist, Marc Andreessen, thinks there is a future for the news business, however, due to a rising middle class in emerging markets and mobile Internet distribution. While this audience may not (yet/ever) be hankering to read Buy-Sell-Hold reports on their smartphones, Andreessen’s recently published 8-fold strategy for journalism has lessons for investment research as well. The big takeaway: sell-side research needs to change a lot – and quickly - to survive as anything more than an advertising vehicle for brokerage firms.

Via ConvergEx's Nick Colas,
Early on in my sell-side brokerage career – this would have been 1991 – I got a useful piece of advice from the firm’s Machinery analyst.  He was a long time veteran of the business and had been on the very first Institutional Investor All-Star Analyst list back in the 1970s.  To the best of my knowledge, he never fell off this roster during his 30-year career, a unique achievement in a highly competitive business.  When he spoke, all the young pups listened.
“You want your initial company reports to be so thick that when the client gets them in the mail and immediately throws them away, they are so heavy that they push all the other competitors’ reports they’ve discarded down to the bottom of the trashcan.”  His message, while disturbing, had the ring of truth.  The client was never going to read your report.  Not most of them, anyway.  But they would remember that you were the analyst who had penned that 100-page report they got, because of its impressive scale and heft.  When you rolled by on a marketing trip or a salesperson made your call, they’d think: “Yeah…   I remember that analyst’s name… I got his War and Peace report a while back…  He must know SOMETHING worthwhile in all that writing.”
Technology and competition have changed the role of the brokerage analyst, not to mention a few self-inflicted wounds along the way.  A few points here:

No one prints and mails reports much any more – everything goes by email.  Publishing and postage budgets used to run into the millions of dollars at most large brokerage firms in the 1990s.


Clogging up the client’s inbox with a hefty file is actually a big no-no now.  Frequency of publication matter more, which is why you get one of these missives +200 days a year.


Analysts stopped being one-stop-shop experts right around the time Reg FD came around, as they lost their unique position in the company-to-investor flow of information.  Companies used to call me first when they were going to miss a quarter, and I let the world know.  Now, expert networks fill an important piece of the investment mosaic, not to mention satellites for hire, Twitter feed analysis and other tech-enabled content.   And companies do their own public pre-releases of quarterly results.


The Internet is a lively agora of investment information, full of entertaining and thought provoking content.  And much of it is free.  There was no zerohedge back in the day.  And if you wanted to see a great CNBC interview, you had to be in front of the TV – there was no Web-enabled video library like today.


Analysts did themselves no favors in the 1990s, putting out recommendations for retail clients at the height of the dot com bubble that had the intellectual heft of a “Real Housewives” television show.  That malfeasance forced a stricter Chinese Wall around the research department, limiting pay and creating a diaspora of many good – and honest - analysts to the buyside. A few of the old lions remain, and a few new ones manage to come up through the ranks. But “Peak Analyst” happened about two decades ago.

In many ways, this narrative arc resembles the changes in the news business over the same period of time.  The Internet cut out the newsstand and home delivery as the exclusive methods of distribution, replacing the highly profitable full-page print ad with banners for tooth whitening and cut rate mortgages.  Narcissistic content like Facebook and other social media soaks up time, shifting public attention from news to keeping up with the Joneses, in every sense of those words.  Craigslist took away the highly profitable classifieds business.  And new competition from web-only news services fulfilled the classic “Innovator’s Dilemma” paradigm by entering the market with highly efficient Internet-optimized business models.
One prominent venture capitalist, Marc Andreessen, recently penned a piece entitled “The Future of the News Business” where he expressed tremendous optimism for the industry.  By his reckoning a rising middle class in emerging markets, paired with affordable mobile Internet access and devices equals the potential for explosive growth in demand for news content.  In developed markets, the Web has actually increased demand for news, just in a way that is ferociously hard to monetize.   Get the right business model, and news could once again be a highly profitable growth industry.
Andreessen lists 8 specific issues as a roadmap to this sea change, and the lessons here apply as much to investment research as they do journalism and the news business.  We’ve included the list here, with our thoughts about what it means for Wall Street as well as the newsroom. 

1. Advertising.   Andreessen calls the news industry out for all those “Crappy” dancing girl ads for mortgages on their websites.  Ad sales departments need to partner with companies that reinforce their corporate brands, not erode them.


In the investment world, money management businesses understand this very well.  They have begun to hire senior strategists of their own, in direct competition to the brokerage world.  These professionals go direct to the customer base with educational content, investment perspectives, and macro analysis.   Yes, it is ultimately advertising, but by controlling its quality and content these shops control their branding message.


2. Subscriptions.  This is where the rubber hits the road in the news business: are consumers willing to pay for it?  If not, then just relying on ad sales is a tough slog indeed.


This is also a perennial problem in selling brokerage research.  The classic model is to employ a motivated sales force and go for “Share of wallet” with institutional investors.   Tough game, that – and only more difficult now as these customers are increasingly used to finding their own differentiated sources of information.  Still, some of the best independent research we see has explicit pricing.  It is, therefore, possible.  And increasingly essential.


3. Premium Content.  Newspapers like The New York Times offer a limited number of free views before they demand payment.  That segments the market nicely and entices semi-frequent users to upgrade to a paid premium service.


Some of this exists in broker research currently.  Better customers get better service.  The more disciplined firms are more rigorous in keeping the gates up until the client pays more.  At the same time, it takes a good deal of intestinal fortitude to hold to this approach.  And just like point #2, it is an increasingly important discipline.


4. Conferences and Events.  There is a reason why sporting events still hold pricing power in the world of television: live must-see events draw viewer attention at a specific time.  Very little news content qualifies for this category, so hosting events with opinion leaders and other must-have content is a path to pulling money and attention from customers.


Wall Street research does this quite well, but there is always room for improvement.   Industry conferences are commonplace to the point of being largely interchangeable.  New content – issues like market structure are hot at the moment – is essential to holding customer attention.


5. Cross Media.  News flow can vector into video content, books, magazines, and other media.  Bloomberg is one good example, as is Yahoo! Finance.


Investment research is proceeding down this track, albeit slowly.  How many analysts have their own Twitter following?  Or write books?  Yes, there are some compliance restraints here, but the path forward is clear.  More points of distribution build brand and awareness.


6. Crowdfunding.  Andreessen cites the historically important but expensive area of investigative journalism as one ripe for independent funding.  Is global warming your cause celebre? Give $5 to a news website dedicated to the cause…


This is also an intriguing direction for investment research.  There are thousands of underfollowed public companies in the U.S., and multiples of that around the world.  Would you pay $100 to get access to better information on a small cap name, buying that content alongside a few hundred other investors?


7. Micropayments.  News organizations can tier access to their content along the Basic/Premium approach, but wouldn’t it be better to capture more of the consumer’s wallet by asking for $1 here and $0.50 there?  Current payment systems aren’t particularly friendly to small amounts due to their transaction costs, but Andreessen pitches bitcoin as an answer to that.


In the world of investment research, this could be a boon for providers with a broad range of content.  If I have to pay $10,000 for access to a broker’s entire suite of research, I may well pass.  But if I can pay for exactly what I want, I would be willing to shell out $100 a few times a year.  Yes, research providers may well balk at risking their $10,000 price point for fear of massive substitution to lower unbundled pricing. But if they don’t do it, someone else will.


8. Philanthropy.  There is a growing trend in journalism to not-for-profit enterprises.  Frontline on PBS is funded this way, with consistently first-rate programming.


The connection to stock research comes through socially-aware investing.  Investors, especially public and sovereign wealth funds, are increasingly aware of their societal roles in allocating capital.  They choose investments not just from financial analysis but also with an eye to favoring businesses that adopt and maintain progressive agendas.  That may fly in the face of classical finance, but it is clearly an important trend.  Bottom line: the next “Big Thing” in investment research could be a not-for-profit focused on issues like environmental, social or corporate governance. 

The upshot of all this is simple: the news business isn’t dead, and neither is investment research.  Yes, both have had their troubles and tribulations.   But the trends that have put a foot in the grave for both businesses can also lead them back to health.

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nmewn's picture



You get exactly one shot at trust to get it right, they went the opposite direction.

wee-weed up's picture

MSM = Obozo Admin boot-licks and ass-kissers.

0b1knob's picture

Did somebody say “Crappy” dancing girl ads?   Hey I really like those.

Better than most of the crap on TV.

EscapingProgress's picture

Don't get your hopes up because the government will bail them out. Afterall, what would Americans do without their "news".

boogerbently's picture

The "news industry" is dying because they are no longer helpful, informative or honest.


666's picture

I finally gave up on the "news" when Reagan was shot. I heard every possible permutation: he was killed, wounded, not hurt, someone else was dead, etc. As far as I was concerned, the MSM was the opposite of news; it became solely a propaganda machine. Today, my only real news source is ZH.

Bloody Muppet's picture

If you haven't heard, the DeLorean DMC-12 is still the best-selling car in East Germany!

AldousHuxley's picture

Russia Today has more honest reporting about state of United States than any US news media


US elites lost control of their main channels of propaganda with digital media....politician's lies are recorded forever, and social comments validate general consensus in private without having to assemble physically.

so...they are trying to control it by driving multiple media channels into monopolies like Facebook and Tweeter, then backdoor into these entities.


"News" is what they want you to hear. The real good stuff is hidden deep in the internet and in your mind.

taketheredpill's picture


2. Subscriptions

Newspapers have probably covered this if the Net Neutrality rules get overturned, as appears the case.  This will allow faster web page access for more money, so the newspapers can transfer their advertising pay model from print to online.  So far online news has failed partly because of competition on a level playing field.  By changing the rules the mainstream news may be available while the alternative competition will download at donkey speeds.  So consumers will pay to access mainstream sites and advertisers will pay because they see the traffic.


How this applies to Dealer Research I have no clue.



J_jade's picture

LMAO  Are you serious.  A communist country with ccontrolled media has more intergirity then western.  Your a fucnk moron.  Go suck on your Russian teets.    If you for one second think that Russian media is any better or any different then any other media on the planet you are nothing more then a niave child. 

As far as the itnernet goes it is just as full of mis-leading informataion and propaganda as the rest. 

When the death of Newspapers and all print media for that matter including magazines does come it will be at the fault of loss in advertising dollars and subsciptions.   Do you even have any idea what full ppage ads even cost in major newspapers around the country.  Youre looking at around a 20,000 to 30,000 dollar ad for a full page with color.  Oh they'll goo allright, just like Yellow pages who would charge you 4 times for 1 city listings because they'd break down the Yellow pages into 4 sections for the city.   They will die mainly because of GREED.

Keep believing the LIES that Russia tells you. 

marathonman's picture

"Today, my only real news source is ZH."  My real news source is the comments on ZH.

RafterManFMJ's picture

Only a fin moron or someone above the age of 70 - in diapers - watches the 'news.'

Here is the news.

1. There was a robbery/fire/auto wreck and/or an aircraft crashed/disappeared

2. Commercials

3. Obama/Congress made some noises and these noises were broadcast over the Nation's TVs.

4. There is a threat. Terrorist/identity theft/lightning/Russia/gypsies whatever imaginary hobgoblin they animate on the screen.

5. Commercials

6. The human interest story. A kitten was rescued from a tree or some low level crude featured wanna-be Mafioso politician ladled thin soup into the pewter cups of the poor.

7 Commercials

8 The Weather. It may rain or it may not. But then again, both.

9 Commercials.

Here is a 'Fucking Moron Test'

Q: Do you watch the news?
A: Yes - You are a fucking moron.
A: No - You may not be a fucking moron; more data is needed.

chinoslims's picture


You forgot the biggest distraction, SPORTS.  They usually do a segment on sports so that men don't realize that the Fed is printing to infinite and we have more war and global instability in the future.

Poor Grogman's picture

Reading this sent a shiver up my spine.

To think I actually watched that shit.


Thought I was informed.

How's this for a laugh. .. I once thought bank loans came out of deposits.


Froman's picture

Rafter you could make some big $$$ being a media consultant.  Just print out your script above and then supplement it by advising the broadcaster clients to update their set to something modern looking and then hire; an African American Woman, an African American Man to be co-anchors with one of the blonde bimbos, a couple of old white guys (think Warner Wolf types) to broadcast the sports report, at least 3-4 bleached blonde bimbos to be field reporters and co-anchor women with the African Americans, then fielders choice;either a latino, asian, another bimbo or african american and/or an old white guy to read the weather.  For the last category you can advise them that they can select more than one from the category so they have a "weather team" that will read the weather report.  You also don't need an actual meteorologist you just need one that has a degree in broadcast meteorolgy which is basically a degree in how to read weather terms from a teleprompter without mispronouncing them and smile while you are doing it so the sheeple believe what you are actually saying is based on some sort of actual science.  

HardAssets's picture

I've heard many of them are joining escort services and hanging out on street corners now.

So in many ways, its business as usual.

stant's picture

Dance with the devil you can't tell anyone when he steps on his own wing

Ignatius's picture

Telling the truth might up their circulation though one should know when/how to duck.

kchrisc's picture

Don't you mean the propaganda industry is almost financially dead?!

It won't die, it will just be subsidized and give the pols and crats even more incentive to manipulate the Internet under their propaganda umbrella.

I consider myself a critical thinking person, but in the age of the Internet I have discovered how much even I was manipulated by propaganda in the past—I actually believed that Perot ran for the benefit of the American people. “What a maroon” I was.

booboo's picture

I threw this article in my trash bin and it compacted an entire years contents down to the width of a quarter.

JuliaS's picture

Industries that should be dead because of the internet:


1. Print media.

2. Over the air and cable television.

3. Physical media distibution (CD's, DVD's, Bluerays etc).

4. Retail (short of food delivery services).

5. Travel / tourism agencies.

What else?

TalkToLind's picture

Don't forget about the desktop computer industry...the MSM has been forecasting the death of the PC for more than a decade.  Those presstitutes want us consuming entertainment and advertisements on tablets instead of doing productive work on PCs. 

Kreditanstalt's picture

They'd LOVE that.  Another monthly bill...and the effort in the past decade or so is...expanding the stuff t,hat comes with MONTHLY BILLS!

NFLX.  Cell phones.  iPads/Pods/gadgets  cable Tv   etc., etc...

madcows's picture

I'll take netflix ($8 per month)and internet over cable ($100+ per month).  I hope cable dies.  Cable rates are akin to usury. You can keep the ipods tv telephone.  I don't want any of that overpriced shit.

Otherwise, I'll take a free book from the library, a free hike in the mountains, a free activity in the yard.

Kreditanstalt's picture

The hgher education cartel...

A Nanny Moose's picture

Post Orifice of the FORMER United States

fonzannoon's picture


This article actually makes me long for one of Snyder's lists.



fonzannoon's picture

I refuse to plug it, but he wrote a book. On one hand it looks horrendous. On the other hand he managed to put something out not in list form.

Dr. Engali's picture

Are you sure he wrote a book, or was it just a link to somebody else's crappy work?

fonzannoon's picture

""tom, have you been following the economic news lately?" ...Hannah hesitated again, but she kept going. "Tom, our economy is about to collapse... the American people deserve to be warned about what is coming..."

NoDebt's picture

Read ZH, then read CNBC.  Form an opinion based on the bookends plus your own experience.  You won't do any better or worse than the pros.  Unless you have specific insider information, you're not going to do much better than that.

I read a "newsletter" from one of my competitors yesterday.  LOOKED fantastic.  Way better than mine.  First sentence read "we expect 3% annual growth in 2014".  Good luck hitting that after blanking the whole 1st quarter.  My pile of shit newsletter started out with one word:  Churning.  

So you tell me, what is the value of "information"?  Near zero.  What is the value of "wisdom"?  Slightly above zero.  Be right or be gone. 

Rising Sun's picture

subscriptions - just clear your cache and you get to start all over on the "free trial"


most of the MSM is fucking shit - reading headlines is now my favorite past time.


except ZH.  superb content!!!!

Ralph Spoilsport's picture

I like fucking with the NYT whenever they gray out an article with the "you've reached your limit" crap. I copy the URL, open a Private Window in FireFox and paste in the URL. Works great.

Dr. Engali's picture

Nowhere in this crappy article did I read.... Give them real news.

fonzannoon's picture

Agreed Doc, so lets hijack the thread. Check this out

"Someone retiring now in 2014 with $1 million at age 65 can safely withdraw $43,600 a year. However, [because of inflation], today’s 20-year-olds will need over $7 million to have that same lifestyle when they retire. In 1970, they would only have needed $166,000 in retirement to have a similar purchasing power for the rest of their life."

Where do we even start with this? How fkin funny.



Dr. Engali's picture

Holy shit. I had to stop reading when she said inflation is at 1.5% and hasn't been at 4.5% since 2008. Now who in their right mind is going to take that idiot seriously? Oh never mind, it's on yahoo. That explains a lot. To be sure all those snap collecting Walmart workers will have 7mill saved for retirement.

fonzannoon's picture

The best part is 50% of these 20 yr olds are unemployed and the majority of the rest of them are debt riddled and toiling in low wage service sector jobs, and they need to bank 7 mil, according to this mess of a read, after they are done fulfilling their obligations to the failing ponzi(s) that can't exist without them.

IridiumRebel's picture

This calls for a $125,000 student loan!

marathonman's picture

There's a lot of comments that people are in on the con on the Yahoo comment boards.  Especially on the Yahoo Finance pages.  It isn't exactly ZH but there's a critical mass out there that are awakened.

prains's picture

is that in ZIM or USD?

Winston Churchill's picture

At this point, what difference does it make ?

TalkToLind's picture

<-- Dancing mortgage girl

<-- Hot Asian chicks


I'm just sayin, you gotta pay the bills somehow.

delivered's picture

The bottom line is simple. First comes quality content. Without it, you might fool some people for a while to continue to pay but in the end, crappy content (just like a crappy product) will always find its way to the grave. Second comes proper distribution. Clearly today this involves understanding how content moves, where people consume the content, and what really triggers interest in content. Or in other words, mobile and digital are without question leading the way, especially with the younger/tech crowd but there's still a place for that good old printed content including newspapers, magazines, and even snail mail. The key with quality content is to utilize all mediums, in a coordinated and efficient manner, to deliver a clear, concise, and consistent message (and what the brand means).

If you remember back in the day when TV was first introduced (as powerful if not more powerful than the internet as bringing video to the world was a huge advancement), radio, newspapers, magazines, mail, etc. didn't die but rather had to adapt to the new market. The key, however, remains the same. Quality content represents the start of the food chain and without it, all of these crappy and so called content providers will die a quick and quiet death. Look no further than the troubles at Twitter as with 99.9% of the tweets forwarded being worthless, their content sucks. Twitter is going to find it increasingly difficult to not just grow users but more importantly, engage users and increase dwell/use times. The competition of distributing content to users is fierce already and is going to get brutal moving forward as everyone moves into the instant demand world of mobilility.

Use to be that you could reach your customers once a week with an ad in the Sunday paper or weekly mailer. Now, you have to know where your customers at almost every moment, what they are following, what's trending, etc. Crazy connected world these days but it still comes down to two key issues. First, without quality content you're dead. Second, the competition for users is going to move into a hyper-competitive mode with pressure soon to come on pricing and margins. 

GooseShtepping Moron's picture

Bravo! Not much I can add to that, so I'll simply say +1.

On second thought, I will add something. It's important for people to realize that quality content isn't free. It comes about as a result of paying competent journalists to do research and write books and articles. I used to have this argument a lot with people on other discussion fora a few years ago when they sustained that "technology" was killing/had killed the legacy media. I replied that technology had nothing to do with it one way or another, and that in order to learn anything about the world beyond our own horizon, some sort of news agency would still need to maintain bureaus and correspondents in every corner of the world; somebody would still need to be able to get access to important people e.g. heads of state, government officials, business leaders, generals, scientists, artists, celebrities; somebody would still need to vet the facts and write up the copy, and let us not underestimate the impact good writing has on the overall quality of the content. None of this can be done without something like a trusted news organization. Whether it's publicly funded or privately funded, whether it's new media or old media, isn't really the point. The point is that by definition content can't be free, for it takes time and resources to produce it. The internet, and the general society we live in, has made me 100 times more cynical about anyone offering to sell me something, but wouldn't I love to read brilliant and well-written articles such as newspapers used to be known for. I would certainly pay for that, and I doubt I am alone.

SF beatnik's picture

"It's important for people to realize that quality content isn't free. It comes about as a result of paying competent journalists to do research and write books and articles. I used to have this argument a lot with people on other discussion fora a few years ago when they sustained that "technology" was killing/had killed the legacy media."


The best paid journalists are paid to lie their asses off.


Many fine and valuable works in various modes of expression are total money losers.  The creators lose money in the act of creation and often get hardly any recognition for their contributions. 


Yes, it takes a lot of work to contribute something of value. But NO, money does not play a big role in motivating contributors.



Seek_Truth's picture

As it should be for "news" that is actually 99% propaganda.

Long live ZeroHedge!