Speaker 1: This is Masters in Business with Barry Ridholts on Bloomberg
Speaker 1: Radio Today. On the show, I am thrilled to have
Speaker 1: William Gruskin, a person I've known over the years as
Speaker 1: an editor and dean at the Columbia University School of Journalism.
Speaker 1: I know Bill from his early days when he was
Speaker 1: a managing editor at the Wall Street Journal, and eventually
Speaker 1: he pretty much took over running Wall Street Journal Online, which,
Speaker 1: as he tells us, is the largest subscription news site
Speaker 1: in the world. Bill Um has pretty much seen everything
Speaker 1: there is to see in the world of the business,
Speaker 1: world of journalism, and we're trying to do more of
Speaker 1: these shows that aren't just fund managers or economists, but
Speaker 1: actually bring people in who have run businesses and can
Speaker 1: talk about it. Bill is uniquely situated. He's seen both
Speaker 1: the decay in the traditional business of journalism, but he's
Speaker 1: also been very active on the Wall Street Journal dot
Speaker 1: com site, which is by all measures, been wildly successful.
Speaker 1: They probably have of all the mainstream media tablet products,
Speaker 1: they probably have the best iPad um app I've seen.
Speaker 1: It's just really a pleasure to use in order to
Speaker 1: read a newspaper. They're they're fantastic. I know Bill for
Speaker 1: a good couple of years. I first met him early
Speaker 1: in the days of Wall Street Journal Digital when they
Speaker 1: were considering rolling out this thing called blogs, and Bill
Speaker 1: and I had had a breakfast actually not too far
Speaker 1: from here, over at Persian Square Cafe going over what
Speaker 1: they can expect and how they should approach the idea
Speaker 1: of blogs at the Wall Street Journal, and they took
Speaker 1: some of my advice. A lot of my advice they didn't.
Speaker 1: But I think some of the blog that we've seen
Speaker 1: that the Wall Street Journal have put out, notably Money
Speaker 1: Beat and Real Time Economics, have really garnered a pretty
Speaker 1: big following and are a nice addition to the paper itself.
Speaker 1: I've also spoken with Bill, and I've spoken to classes
Speaker 1: at the Columbia School of Journalism about enumeracy and how
Speaker 1: easy it is for reporters to get bamboozled by numbers,
Speaker 1: especially with what we've seen from trade groups and associations
Speaker 1: or politicians trying to twist economic releases in their favor.
Speaker 1: It's very, very easy if you're don't have a facility
Speaker 1: with numbers, are you're not especially good with math um.
Speaker 1: If you're an English major and your specialty is writing,
Speaker 1: not you know, doing calculations, to not fully understand statistics,
Speaker 1: not fully understand mathematics. It's it's a challenge that reporters
Speaker 1: have always had, and today, where there's so little training
Speaker 1: and so little apprenticeship periods, it's become even uh more
Speaker 1: of a challenge. And and I recall speaking to him
Speaker 1: in a class at Columbia way back when I've done
Speaker 1: it once or twice, and it was really quite fascinating
Speaker 1: discussing how not to misinterpret economic data. But Bill has
Speaker 1: really a unique insight into the business of journalism, what
Speaker 1: works and what doesn't work. And I think you'll find
Speaker 1: this to be quite an interesting conversation. It's a little
Speaker 1: inside baseball, but interesting nonetheless. And so with no further ado,
Speaker 1: here's my interview with William Gruskin. This is Masters in
Speaker 1: Business with Barry Ridholts on Bloomberg Radio. On today's show,
Speaker 1: we're discussing the business of journalism, and I'm pleased to
Speaker 1: having the studio Bill Gruskin. He's currently executive editor here
Speaker 1: at Bloomberg. Wired to that he was dean at the
Speaker 1: Columbia School of Journalism and he spent many years at
Speaker 1: the Wall Street Journal. Most recently he was managing editor
Speaker 1: for The Wall Street Journal Online, which I believe is
Speaker 1: one of the largest subscription site in the world, actually
Speaker 1: the largest subscription news site, because Consumer Reports has always
Speaker 1: had and I presume still has more subscribers than than
Speaker 1: wh dot com. But when it comes to news sites, yeah,
Speaker 1: so largest. And you were managing editor of the paper
Speaker 1: proper and I was deputy managing editor for UM in
Speaker 1: two thousand seven and two thousand and eight, overseeing all
Speaker 1: the domestic news bureaus as well as all the editing functions.
Speaker 1: And let's let's get and start with your background. Undergraduate
Speaker 1: degree in classics from Stanford. You then went to John
Speaker 1: Hopkins and got a master's degree in US foreign policy
Speaker 1: and international economics. There you go, right, pretty good set
Speaker 1: of broad based background to look at the world's of
Speaker 1: business and finance all the Oh, I didn't actually get
Speaker 1: involved in business until I got to the Journal in
Speaker 1: I'd spent about fifteen years doing metro journalism. So that's
Speaker 1: a really interesting entree. What was it, Uh? You know,
Speaker 1: Rupert Murdoch and his predecessor, the Bancroft's not known for
Speaker 1: being especially generous with journalists. What was the appeal to
Speaker 1: bring you over to the Wall Street Journal. Well, what
Speaker 1: they were generous with was providing time and space to
Speaker 1: do really great journalism in the mid You might remember
Speaker 1: what the old Wall Street journalis still look like, totally gray,
Speaker 1: two big long legs of type on on the left
Speaker 1: and right, and then the little story in the middle
Speaker 1: that we called the a head. And and I was
Speaker 1: recruited to work on what they called the page one desk.
Speaker 1: And there still is a page one desk at the Journal.
Speaker 1: But I remember when I first got there. This is
Speaker 1: when the journal ran five days a week, right, so
Speaker 1: we had three stories on the front page. You can
Speaker 1: do the map three times, five fifteen stories. We had
Speaker 1: twelve editors editing fifteen stories a week. Now, when I
Speaker 1: worked to the Miami Herald, you would do fifteen stories
Speaker 1: a night. It really wasn't that unusual. So it was
Speaker 1: like coming into the Garden of Eden and saying in depth,
Speaker 1: a little quirky, esoteric exactly. I love those a head
Speaker 1: stories that were great. The a heads were great, the
Speaker 1: column six, the stories on the right side of the page.
Speaker 1: Generally we're pretty heavy on the business and economic front,
Speaker 1: often driven by news stories on the left side you
Speaker 1: might remember, tend to be more like features. We look
Speaker 1: at things like race, we look at things like culture,
Speaker 1: you know, um, pretty much anything under the sun. And
Speaker 1: it was just an amazing I feel very fortunate to
Speaker 1: have been part of that. And you left when Murdoch
Speaker 1: came in or what was the time, So I had
Speaker 1: a coincidence. I did leave about six months after Murdoch
Speaker 1: officially took the reins, and it was kind of a
Speaker 1: coincidence of several things, but the main one was I
Speaker 1: got a call from Nick Lemon, who at that time
Speaker 1: was the dean of Columbide Journalism School, and he said,
Speaker 1: we're looking for somebody to really move the school into
Speaker 1: the digital age, and it was a great opportunity. Let's
Speaker 1: step back and look at them much bigger picture, the
Speaker 1: changes in the industry. And I referenced a chart that
Speaker 1: I think was Ryan Chitham of the Audit, which is right,
Speaker 1: showed that revenues at newspapers are back to levels of
Speaker 1: nine three right inflation adjusted. Yeah, astonishing, astonishing figure. I mean,
Speaker 1: it's it's a it's a pretty clear trend line. So
Speaker 1: so is it the business model that's having trouble or
Speaker 1: is it the content that isn't itself at issue? Because
Speaker 1: we've seen a lot of things change. So you might
Speaker 1: remember the first time I met you, I think you
Speaker 1: were You've been doing your blog for about a year
Speaker 1: or two and four, yeah something, and dot com was
Speaker 1: about to dip its big toe into blogs, and and
Speaker 1: I wanted to take you out to breakfast. And that's right.
Speaker 1: We went to the best whole wheat blueberry pancakes. And
Speaker 1: I didn't get an endorsement for that, but but I
Speaker 1: deserve on. So that's um, that's ten almost over ten years.
Speaker 1: It's probably about ten years ago. It's in the decade. Man.
Speaker 1: You and I are old. We are. The funny thing
Speaker 1: is when when I began blogging, it was, oh, this
Speaker 1: is kind of fun and interesting. I don't have to
Speaker 1: send the letter to the eddler. I could do this
Speaker 1: to say, right, right, and maybe someone will read it,
Speaker 1: maybe someone won't, right. And I remember I still remember,
Speaker 1: um dealing with top corporate people at Dow Jones when
Speaker 1: we were gonna start blogging. I'll never forget there was
Speaker 1: this one executive, a woman with a Southern accent. I'll
Speaker 1: never forget. She said, why do people want to read blogs?
Speaker 1: You know, if you want to read an opinion, you're
Speaker 1: gonna want to read it from the Journal or the
Speaker 1: Times or something. And of course that that was clearly
Speaker 1: not true in two thousand four. Now ten years later,
Speaker 1: you know, when you look at the number of sources
Speaker 1: on on business news and some of it, some of
Speaker 1: it's great, and some of it's horrible, and a lot
Speaker 1: of it's kind of in the middle. And I think
Speaker 1: one of the big challenges for all of us UM
Speaker 1: in the journalism world right now is how do you
Speaker 1: help readers navigate through that at you know, you look
Speaker 1: at Seeking Alpha, you look at Business Insider, you look
Speaker 1: at Yahoo Finance. I mean, these are very different UM outlets,
Speaker 1: but these have huge audiences and the millions of people.
Speaker 1: So what does the content creation industry say about journalism,
Speaker 1: financial media our world? So, you know, in the journalism world,
Speaker 1: there's really kind of two kinds of content creators. There's
Speaker 1: the people who are out out there doing the original reporting.
Speaker 1: There they're going through you know, balance sheets and and
Speaker 1: and SEC filings in order to dig up stories. They're
Speaker 1: they're listening to conference calls to try to ferret out
Speaker 1: what the speaking to original sources exactly, exactly doing original journalism.
Speaker 1: Then there's a lot of people out there who are
Speaker 1: aggregating or providing commentary, analysis and opinion around what they're doing,
Speaker 1: and those are not two complete divisions between each other.
Speaker 1: Any good news website has some kind of aggregation function
Speaker 1: to it, and a lot of people, including you, Berry,
Speaker 1: will I go and find something new and you'll reveal
Speaker 1: it to your readers which did not appear in the
Speaker 1: Journal or The New York Times Bloomberg. I'm Barry Ridhults.
Speaker 1: You're listening to Masters in Business on Bloomberg Radio today.
Speaker 1: We're speaking with Bill Gruskin, currently executive editor at Bloomberg,
Speaker 1: but previously Dean of the Columbia School of Journalism and
Speaker 1: former managing editor for The Wall Street Journal Online. So
Speaker 1: this has always been the complain about bloggers in general,
Speaker 1: is hey, we're doing original, certainly a complain about the
Speaker 1: people who only did aggregation. Like I. I spent the
Speaker 1: latter half of my career. I began as a trader
Speaker 1: and became a strategist, so I was cranking out original
Speaker 1: stuff every day, and I always in oh three, oh four,
Speaker 1: oh five. That's really what I was fleshing out the
Speaker 1: blog with It was only later where I discovered, hey,
Speaker 1: I have a ton of stuff I look and you
Speaker 1: and I discussed this. I have a ton of stuff
Speaker 1: I look at at the end of the day that
Speaker 1: just dissipates from my head. If I make a list
Speaker 1: of the ten most interesting things I've read, maybe that
Speaker 1: has a value to somebody. And I've been now doing
Speaker 1: that for a decade, right, And so it's not that
Speaker 1: I'm now I'm completely understand the business side of journalistic
Speaker 1: complaint that hey, we're doing this original research and one
Speaker 1: of these sites, that was the Beefed HuffPo that they
Speaker 1: would take all this original content and do an intro
Speaker 1: sentence and an outro sentence and data and how is
Speaker 1: that not copyright violation? Well, as long as you're only
Speaker 1: taking a small excerpt, then it falls with it. And
Speaker 1: I think they were also taking the punchline. You know,
Speaker 1: if I don't here's a thousand word article, let me
Speaker 1: take the hundred and fifty most important words. Why do
Speaker 1: I have to go read readers is plenty right, I mean,
Speaker 1: they don't necessarily to read a two thousand words Sorry
Speaker 1: about why the CFO of the Facebook just stepped down yesterday.
Speaker 1: You know, they just want to you know, the headline,
Speaker 1: a couple of paragraphs and boom that they're often story right.
Speaker 1: So you know, I think this has been hard. You know,
Speaker 1: the traditional media companies have a lot of problems. The
Speaker 1: main one is in a digital world, every single piece
Speaker 1: of content gets atomized, right, so you don't necessarily need
Speaker 1: it all to be delivered you in one package that
Speaker 1: hits your doorstep, or that's like a thirty minute broadcast
Speaker 1: on TV. Every every article, every photo is available anywhere
Speaker 1: in the world. You could create your own paper, a
Speaker 1: little of the Times, a little f T, a little Bloomberg,
Speaker 1: and that's your own very few and I wanted to
Speaker 1: we kind a laptop. We could go to WordPress and
Speaker 1: we could create a website and literally two minutes and
Speaker 1: anything we put on that website would be instantaneously available
Speaker 1: to anybody in the world. Think about that. That's a
Speaker 1: that's a game changing That that is a game changer,
Speaker 1: and that's scary and and it fundamentally and irrevocably changes
Speaker 1: the economics of our business. You've done a lot digital media.
Speaker 1: You've looked at the changes in the business model of
Speaker 1: media and financial reporting. Let me, I wrote a few
Speaker 1: company names down because I was knowing I was going
Speaker 1: to speak to you. I was thinking about, let's think
Speaker 1: about the companies who are making running a journalistic enterprise
Speaker 1: and challenge and not so much from the content side,
Speaker 1: from the business side. So here's the shortlist that came
Speaker 1: up with. Craigslist essentially gutted the class if it's a
Speaker 1: huge source of revenue for eBay has done a lot
Speaker 1: to take over the sale of used cars and new cars,
Speaker 1: Zilo and Trulia on on residential real estate. UM, I
Speaker 1: don't know what mobile has done to the business model,
Speaker 1: but it's just another wild card, another random factor. And
Speaker 1: you know when we talked, we talked earlier about blogs
Speaker 1: and Twitter. They're really more in terms of content. But
Speaker 1: what about things like Facebook? What is Facebook advertising which
Speaker 1: seems to be doing well? How is that challenging? How
Speaker 1: are all these companies challenging the business model of journalism? So,
Speaker 1: you know, the interesting thing is a couple of years ago,
Speaker 1: people used to really focus on things like Craigslist, which,
Speaker 1: as you said, really did a job on newspapers classified
Speaker 1: ads and newspapers class fied ads. I think they had
Speaker 1: like an eight kind of margin that they were just
Speaker 1: you know, any idiot could run a local newspaper, you know.
Speaker 1: But what's interesting so with Facebook and obviously with with
Speaker 1: Google as well, so you have a few issues. One
Speaker 1: is they're just generating huge amounts of advertising inventory. It's
Speaker 1: just at a scale that's that no news organization can
Speaker 1: really hope to match. You know, even the Guardian or
Speaker 1: New York Times dot com. You know, they don't come
Speaker 1: close to holding a candle where did? I was reading
Speaker 1: in one of Facebook learning stories today that two thirds
Speaker 1: of their one point two billion users log on every day.
Speaker 1: They have they have two interesting data points, daily average
Speaker 1: users and monthly average users. But the one caveat I'll
Speaker 1: warn you about is if you click a like button,
Speaker 1: that account is having logged on, which really, what is
Speaker 1: the net dollar game is zero increase the where their
Speaker 1: profits seemed to becoming. Our people on the site looking
Speaker 1: at the stream, looking at ads going by. But even
Speaker 1: let's say it's a third of their advertise, it's still
Speaker 1: an immense daily number of page views exactly. So you
Speaker 1: know a few years ago back lines at w dot com,
Speaker 1: we were looking at digital ad rates. Uh, they call
Speaker 1: them the CPMs, which is the cost per thousand impressions,
Speaker 1: be ten twenties. Some parts of the sites were I
Speaker 1: don't know what comes AD rates are these days. I
Speaker 1: seem they're still pretty high because it's a premium audience.
Speaker 1: But a lot of publishers are looking at CPMs of
Speaker 1: seventy five cents a dollar because that's what Facebook charges
Speaker 1: right well, But keep in mind it's a mass audience,
Speaker 1: and the financial audience. I could tell you on the
Speaker 1: blog five years ago dollars was not uncommon. Now it's three,
Speaker 1: four or five dollars. I mean it's a side it's
Speaker 1: a side business. It's and there was never intended to
Speaker 1: be my main business. But if that's your main business,
Speaker 1: that's a drop in revenue, and and it's clearly going down, down,
Speaker 1: down all the time. So a lot of news sites
Speaker 1: are now in a situation where they're trying to generate
Speaker 1: more and more traffic just to keep their head above water.
Speaker 1: You know, if you can generate twice as many pages
Speaker 1: and the CPN goes down, you're exactly where you were
Speaker 1: last year. But it's very hard to drive twice as
Speaker 1: many pages every year, and you're compromising your content slide
Speaker 1: shows and extreme headlines and exactly well all of the
Speaker 1: worst sort of clickbait stuff that you know, really takes
Speaker 1: you from true journalism to write. And there's a reason
Speaker 1: people look at web based stuff somewhat differently than they
Speaker 1: do um a print outlet like the Times of the Journal,
Speaker 1: because a lot of it is nonsense. Yeah, and also
Speaker 1: advertising on most news websites is terrible. I mean it
Speaker 1: just does. I mean the ads themselves, theseves, the formats
Speaker 1: have not really improved. Why I first got to dot
Speaker 1: com in two thousand one that they were showing me
Speaker 1: a rectangular ad that would go on the homepage of
Speaker 1: what they call three D by to fifty which stands
Speaker 1: for stands for the number of pixels. That was two
Speaker 1: thousand one, and I agreed to put her on the
Speaker 1: home page. The add to part. When you go to
Speaker 1: dot com now or pretty much the website, that's pretty
Speaker 1: much what you see. It's been thirteen years. You have
Speaker 1: seven ten by nine. I mean sometimes you get the skyscraper.
Speaker 1: I think it's one sixty. I mean, everything else has
Speaker 1: changed in the digital world, but this kind of concept
Speaker 1: of we're gonna give you or a rectangular ad We're
Speaker 1: gonna stick next to a story and somehow there's gonna
Speaker 1: be a lot of value for the advertiser. It's just
Speaker 1: not true. I'm Barry rid Hults. You're listening to Masters
Speaker 1: in Business on Bloomberg Radio. Today we're speaking with Bill Gruskin,
Speaker 1: currently executive editor at Bloomberg, but previously Dean of the
Speaker 1: Columbia School of Journalism and former managing editor for The
Speaker 1: Wall Street Journal Online since you left the Journal, or
Speaker 1: really a better way of saying this is, over the
Speaker 1: past decade, we've seen the sort of uh segregation of
Speaker 1: outlets by political partisanship. And so I jotted a few down.
Speaker 1: So you have Fox on the one side and MSNBC,
Speaker 1: which is really smaller version of it. I tried to
Speaker 1: figure out who was the other side of Drudge. I
Speaker 1: can't really put that really isn't on the left. The
Speaker 1: left is completely right. The right seems to walk a
Speaker 1: little more in lockstep. And then you know, so you
Speaker 1: have you have people like um, Matthew Iglesias and and
Speaker 1: obviously Paul Krugman. But Krugman is a guy. Krugman is
Speaker 1: a guy with a very specific I have to remember
Speaker 1: interviewed him last week after Kruger, Right, that's a good
Speaker 1: way to remember that. But what is this bifurcation by politics?
Speaker 1: Because because the studies seem to show people on the
Speaker 1: right go read their sides, people left go read and
Speaker 1: you end up with this alternative to alternative universes, neither
Speaker 1: of which necessary necessarily reflect reality. So the first thing
Speaker 1: to keep in mind is the actual size of these audiences.
Speaker 1: I mean, here in New York City, we tend to
Speaker 1: focus a lot on these outlets like MSNBC and Fox.
Speaker 1: What does MSNBC's nightly audience two hun a thousand viewers
Speaker 1: or something like that. Blog post can get that, Yeah,
Speaker 1: and what's the size of how many people live in
Speaker 1: this country? Fox News is much much better than MSNBC
Speaker 1: was having one and a half million viewers a night
Speaker 1: something like that. So first of all, you know, we
Speaker 1: all here in New York get very focused on this,
Speaker 1: but when you actually get out of New York City,
Speaker 1: you find out that, you know, outside certain pockets, not
Speaker 1: really that many people actually watched these programs that work
Speaker 1: care And I wouldn't be surprised if you know, half
Speaker 1: of Fox news audience comes from Jon Stewart and Steve Colbert,
Speaker 1: because they need they need the material exactly exactly. So secondly,
Speaker 1: you know, this is the way the world used to be. Um,
Speaker 1: I mean really, I mean go back a century. You're talking,
Speaker 1: I go back fourty or fifty years. I mean basically,
Speaker 1: so what happened maybe a little bit more than fifty
Speaker 1: years ago, but um, pre war, from pre war, you
Speaker 1: would take a city like New York City and it
Speaker 1: had a whole bunch of day newspapers. It didn't just
Speaker 1: have you know, two or three. Uh and most most
Speaker 1: metro areas these days only have one newspapers. Yeah, if
Speaker 1: you're lucky. So if you run the only newspaper in town,
Speaker 1: you have to be very objective in the middle of
Speaker 1: the road, right, because you can't piss off the Republicans
Speaker 1: campus on the Democrats. But in the old days that
Speaker 1: there were newspapers that were very closely aligned with various
Speaker 1: political factions and political parties. And this is the way
Speaker 1: that the world used to work. So this is nothing new,
Speaker 1: this balkanization to anything. What was new was the relatively
Speaker 1: brief period of time where you had these you know,
Speaker 1: where every city has one and only one very objective
Speaker 1: news provider that like didn't cross the line between the two.
Speaker 1: And I have to tell our audience. You're waving to
Speaker 1: every other person that goes by between between the Wall
Speaker 1: Street Journal and Columbia, you must know half this building.
Speaker 1: I feel like even the guy who fills up the
Speaker 1: coffee machine probably worked at the Journal at some point. Yeah,
Speaker 1: did you guys have good coffee machines? We did for
Speaker 1: a few years. Yeah, yeah, no, no, And as I
Speaker 1: call you, you actually had to pay for it to
Speaker 1: Oh really? Yeah? Right right, Well, the secret is to
Speaker 1: have a data services business that subsidizes the We tried.
Speaker 1: We just weren't quite as good at it as Mike Bloomberg.
Speaker 1: Can I tell you something? Tell rate? And what was
Speaker 1: the Reuters product? Oh? Icon or well that's the new one.
Speaker 1: I don't know what. There were three or four companies
Speaker 1: that were in the running. I mean, I say this
Speaker 1: is an observer and not to kiss his behind, but
Speaker 1: pretty much that race is over now. It seems like
Speaker 1: it's kind of fascinating to see a really competitive mark.
Speaker 1: It's like search. Hey, there were all these companies and
Speaker 1: then Google just said, everybody, here's the new search algorithm.
Speaker 1: You all lose and that's kind of what happened. It's
Speaker 1: a relatively rare thing to see happen. Yeah, well, so
Speaker 1: they call the Network of Right basically at certain point
Speaker 1: the customers go to that's that's what happened here. So
Speaker 1: we were talking about that's a really interesting observation. In
Speaker 1: other words, objective journalism and middle of the road. Hey,
Speaker 1: I'm not gonna share my opinion. I'm just gonna report
Speaker 1: the facts. Post war aberration last and half a century, right,
Speaker 1: and now we've gone back to the pre war version.
Speaker 1: Some look at there's still many news outlets that that
Speaker 1: still you know, play it down in the middle, and
Speaker 1: certainly any of the really big national news organizations. I mean,
Speaker 1: obviously there are people are going to disagree, but I
Speaker 1: would say, you know, there's a lot of news out
Speaker 1: there that that that is that I think we all
Speaker 1: consider is more often than not very objective and and
Speaker 1: which you really want to strive for. It. I told
Speaker 1: journalism students this all the time. Isn't so much objective
Speaker 1: as being a fair and open minded journalists. I'm Barry Ridhults.
Speaker 1: You're listening to Masters in Business on Bloomberg Radio today,
Speaker 1: speaking with Bill Grupskin, currently executive editor at Bloomberg, but
Speaker 1: previously Dean of the Columbia School of Journalism and former
Speaker 1: managing editor for The Wall Street Journal online commentary and opinion.
Speaker 1: Isn't that something that journalists would Hey, that's the gravy
Speaker 1: taint train. You put in your years, you get tapped
Speaker 1: and now I'm a commentator. I published less and and
Speaker 1: get paid more. That that was really a certain And
Speaker 1: you can see this with a ton of people. Uh
Speaker 1: and then eventually you get a talk show and and
Speaker 1: you know, there you are talking into a radio microphone.
Speaker 1: But the real fascinating thing for me is, as someone
Speaker 1: who's an investor, as somebody who consumes an awful lot
Speaker 1: of journalistic content, what is the future of this industry
Speaker 1: gonna look like? Not just in terms of politics and
Speaker 1: left right, but in terms of look I have my
Speaker 1: stable of people that I think are I mentioned Jason's
Speaker 1: why Girl, Dan Gross, who's with the Dale Beast in
Speaker 1: Gretchen Morganson at the New York Times, and I could
Speaker 1: probably put together a list of twenty people. It doesn't
Speaker 1: matter what masthead they're publishing under. Um, I want to
Speaker 1: read what they have what I have to see, So
Speaker 1: So here's what's really interesting about that. You can create
Speaker 1: a Twitter feed or an RSS page where you scoop
Speaker 1: up Jason's column, Gretchen stuff, Jesse's stuff, you know, and
Speaker 1: you can basically create your own homepage, right, I mean,
Speaker 1: whether it's Twitter or using RSS or or Google Plus
Speaker 1: or something along those lines. And so the idea that
Speaker 1: you have to buy the Wall Street Journal in order
Speaker 1: to read Jason, or the idea that that you that
Speaker 1: you that you that you have to buy the New
Speaker 1: York Times and already Rea Gretchen, you know, that's sort
Speaker 1: of dissipating these days. And so what's gonna fund them?
Speaker 1: How they're not going to do that work if no
Speaker 1: one's paying their salaries. I mean, we're seeing increasingly increasing
Speaker 1: adoption of pay walls, and scrip was inevitable, wasn't it. Uh,
Speaker 1: you know, it seems inevitable now. I remember when I
Speaker 1: was at Comments had a paywall going back to to
Speaker 1: you know, people thought we were crazy in the early
Speaker 1: two thousand's, and I would sit there on panel after
Speaker 1: panel being be rated by the future Internet people saying,
Speaker 1: you know, you guys have to take down your paywall.
Speaker 1: You aren't part of the conversation and we can't link
Speaker 1: to you. The The advice I gave you with that
Speaker 1: breakfast a decade ago was to put your blogs outside
Speaker 1: of the paywall, but only let paid subscribers comments. Everybody
Speaker 1: else could just read it. And I also, I don't
Speaker 1: know if you recall this, I also said take all
Speaker 1: of your content that's more than thirty or ninety days
Speaker 1: old and put it outside the paywall because the subscription
Speaker 1: would be supported by the news stuff that's old. Hey
Speaker 1: monetize it with average. So I think we took part
Speaker 1: of your advice. All the blogs were outside the paywall.
Speaker 1: I think on a technical aspect that we weren't able
Speaker 1: to put the comments behind the paywall and not beyond
Speaker 1: the paywall, just allow subscribe. And then on the archive thing,
Speaker 1: we ran into a buzz saw because David Jones had
Speaker 1: a Factiva news service, which is very profitable thing, and
Speaker 1: you can't put those stories outside the paywall. You see
Speaker 1: this is this is one of the issues with any
Speaker 1: kind of a legacy media short right, you have these
Speaker 1: kind of entrenched uh um areas of interest, sometimes for
Speaker 1: very good reasons. Some of them were pulling in millions
Speaker 1: of dollars of revenue. Sometimes it at very high margins
Speaker 1: and once you start threatening their business. I'll tell you
Speaker 1: about a really interesting website. It's called KSL dot com.
Speaker 1: So KSL is the NBC affiliate in Salt Lake City, Utah. Okay,
Speaker 1: it's just your ordinary NBC affiliate. Has to be run
Speaker 1: by coming called desiret News, which is m operated by
Speaker 1: the Mormon Church. So they decided about ten or eleven
Speaker 1: years ago, or maybe a little bit longer, they can
Speaker 1: see that Craigslist was about to come to Salt Lake
Speaker 1: and because there are Mormons that they weren't too happy
Speaker 1: about Craigslist and the kind of standards. Since they did,
Speaker 1: they have since dropped the issues that were the problem, well,
Speaker 1: sex ads in the back and the prostitute. So what
Speaker 1: I'm about to tell you is noel. Craigslist has no
Speaker 1: Craigslist has just gotten smarter about it, like they've they've
Speaker 1: from what I understand, so it's still there, it's just
Speaker 1: a little more yeah yeah. Um. But so KSL, which
Speaker 1: is a local TV news affiliate, said we're gonna start
Speaker 1: our own classified ad service, but we're gonna make it
Speaker 1: really good. You know, how much how much traffic that
Speaker 1: thing gets gets around two hundred fifty to three hundred
Speaker 1: million page views a month. Wow. Um. And they have
Speaker 1: premium ads which they charge money for. They have this
Speaker 1: huge audience which they can monetize. How come nobody else
Speaker 1: has challenged Craigslist. That's a really good question because Craigslist
Speaker 1: is a really crappy experience. Well it's it's hasn't changed
Speaker 1: and has It feels like twenty years old, and it
Speaker 1: just feels kind of at least to me, it feels
Speaker 1: kind of icky. You know. Now, my daughter is just
Speaker 1: moving to Albuquerque. She's she's she's in her mid twenties.
Speaker 1: She's Craigslist to find a couple of housemates. They seem
Speaker 1: like really nice kids. I mean, obviously most of the
Speaker 1: transactions have on Craigslist are fine, but the overall environment
Speaker 1: doesn't really isn't really that conducive. I would think to
Speaker 1: a lot of what people want to do in the
Speaker 1: classified ads work world. So I think a lot of
Speaker 1: what media companies have assumed, Oh you can't have a
Speaker 1: good classified experience, you can't have a paywall. These are
Speaker 1: things that became part of the mantra that nobody really
Speaker 1: challenged them, and so it's it's times start challenging some
Speaker 1: of those. So clearly Washington Post paywall, New York Times paywall,
Speaker 1: bosting Globe paywall, New York Newsday out on Long Island paywall.
Speaker 1: So whoever said there's not going to be a paywall
Speaker 1: at a certain point when it's free and people would
Speaker 1: canceling subscriptions and droves that had to go away, I
Speaker 1: think that was inevitable. I'm surprised so many people pushed back.
Speaker 1: It doesn't take You don't have to be a math.
Speaker 1: Gen used to say, all right, so we're gonna spend
Speaker 1: all this money creating content, and we're gonna give it
Speaker 1: away and we'll monetize it with band rads. That's not
Speaker 1: gonna happen. And even those days they were maybe ten
Speaker 1: dollar per thousand banner heads, you know, still not gonna pay.
Speaker 1: There was no projection you would ever generate enough traffic.
Speaker 1: It was just you know, this blind faith that don't worry,
Speaker 1: it'll get better, or if we don't do this, we're
Speaker 1: gonna be outside the conversation. That just simply wasn't true.
Speaker 1: So now we have four pay journalism moving behind pay walls.
Speaker 1: But then we have the five thirty eight in the
Speaker 1: courts in the boxes. Is it they have they're all free?
Speaker 1: Do they have just a different cost structure or are
Speaker 1: they going to run into the same problem in a
Speaker 1: few years when when the VC funding drives up, are
Speaker 1: they gonna have the same issue? So I think the
Speaker 1: cost structure is a really big piece of this issue.
Speaker 1: I mean, any newspaper these days has they saw printing presses.
Speaker 1: They still have trucks, a lot of them have unionized workforces,
Speaker 1: you know, and they still have to support the legacy
Speaker 1: part of the business because that still brings in seven
Speaker 1: or eight percent of the total at revenue coming back
Speaker 1: from from Laguardi. You see the New York Times printing area,
Speaker 1: it van Wick, it's this, it's a football field, an
Speaker 1: aircraft hangar facility. It looks brand new. It's got a
Speaker 1: cost of millions, right, and then they got trucks going
Speaker 1: out every day, you know, with unionized drivers and stuff.
Speaker 1: Whereas you know, there's this website here in New York
Speaker 1: City called d n A Info, which is kind of
Speaker 1: a weird name for a website. It's actually getting a
Speaker 1: lot of traffic. They've had a lot of really good
Speaker 1: metro reporters from the New York Daily News. They've been
Speaker 1: breaking a lot of stories. They do a lot of
Speaker 1: good neighborhood stuff, and they don't have any these legacy costs.
Speaker 1: So it's the structure. The model is that much cheaper.
Speaker 1: So so the guys who have run the projections on
Speaker 1: the eight and the boxes, Yeah, that's that's they should
Speaker 1: be able to make a run of it. Well, keep
Speaker 1: in mind five eight who owns five three eight? Right now?
Speaker 1: Barry oh? ESPN? So you know ABC, esp the effective
Speaker 1: right if if if it loses a few million dollars
Speaker 1: here and there, it's a couple of quarters in the
Speaker 1: couch cushion, it's all those Uh it's Disney World is subsidizing.
Speaker 1: Yeah yeah, or ESPN. I mean ESPN is a huge cast.
Speaker 1: So you know, um, and Jeff Bezos has bought the
Speaker 1: Washington Post. He bought it for two fifty million, which
Speaker 1: I think one percent of his net worth. Right, you
Speaker 1: touch on something that's really interesting. Our big media outlets
Speaker 1: eventually going to become trophy acquisition. And what was the
Speaker 1: Chicago paper, the Chicago Tribune who picked that up? Well,
Speaker 1: there was that whole unfortunate period with Sam's l who
Speaker 1: who you know, drove that truck right into the mountain,
Speaker 1: And now they're doing a spinoff where they're trying to
Speaker 1: extort a big dividend out of the new company. I
Speaker 1: actually actually wrote a piece for Representative Henry Waxman about it, right,
Speaker 1: said that the La Times was supposedly up for and
Speaker 1: the only Time part. But but for example, take the
Speaker 1: Boston Globe, okay, so, which was formally owned by the
Speaker 1: New York TI exactly. So in the late eighties or
Speaker 1: early nineties, the Times paid one point one billion dollars
Speaker 1: for Oh my god, I think I think they sold
Speaker 1: it for fifty or seventy million plus. And actually I
Speaker 1: think that Times had to keep some of the pension obligations. Yeah, so, yeah, right,
Speaker 1: how do you lose a billion dollar? You know, it's
Speaker 1: like the old joke by Buffett, how do you become
Speaker 1: a millionaire? Started with a billion dollars, then you buy
Speaker 1: an airplane. But so he sold it to John Henry,
Speaker 1: who owns the Red Sox and who's committed to local
Speaker 1: civic life in Boston, and he has a strong vested
Speaker 1: interest in in having a healthy newspaper. At least I
Speaker 1: hope he does. So the state of journalism is dependent
Speaker 1: on the altruism of billionaires, he says, sitting in Bloomberg's
Speaker 1: headquote World Right or some of the philanthropic efforts we've seen.
Speaker 1: So Stoker's Pro pub because it was initially funded by
Speaker 1: Herban Marion Sandler, you know, from from the countrywide right
Speaker 1: or no, not country. Another mortgage company was the mortgage
Speaker 1: company I know who you're talking about, right, and they
Speaker 1: they just want a couple of Pulitzers. They I mean,
Speaker 1: they're doing amazing work. But Joe Eisinger's piece publishes both
Speaker 1: at Pro Publica and The New York Times, right, and
Speaker 1: they did the piece on the New Orleans hospital which
Speaker 1: ran in the time. I remember that. So the Sandlers
Speaker 1: put up ten million dollars a year for a few years,
Speaker 1: and now it's a lot of money. I mean, it
Speaker 1: wasn't that much for them, but but I mean generally speaking,
Speaker 1: and now they're off raising money elsewhere or Pro public
Speaker 1: so so so the Sandlers, actually hurb Sandler's contribution has
Speaker 1: been diminished because they've been able to find other sources
Speaker 1: of money. So effectively, one aspect of journalism is either
Speaker 1: find the sugar daddy or be fortunate enough to have
Speaker 1: someone set up a foundation. And isn't that going on
Speaker 1: with The Guardian in the UK? So, I mean, they're
Speaker 1: a wealthy they're a big foundation. They've done really well, well,
Speaker 1: they've just done really well. So they're run by the
Speaker 1: Scott Trusts, that's called and the Guardian has been losing
Speaker 1: money on a pretty a pretty regular basis. And the
Speaker 1: Guardian has an amazing digital strategy. We actually were fortunate
Speaker 1: at the Journalism school to hire Emily bell Away because
Speaker 1: she was and I think at the time we hired her,
Speaker 1: the Guardian newspaper sold around three hundred thousand copies in
Speaker 1: their web audience was thirty million. That's amazing number. And
Speaker 1: and that was five years ago. And from what I
Speaker 1: understand now, I was just on a panel Earli this
Speaker 1: morning with Heidi Moore, who writes for The Guardian, and
Speaker 1: she said their web Allian sounds forty is angry at
Speaker 1: me these days? I'm sure, I'm sure you'll make it up.
Speaker 1: But anyway, So, so the Scott Trust owned a lot
Speaker 1: of Auto Trader, which is this fantastically lucrative thing and
Speaker 1: he sold it for about a billion dollars recently, so
Speaker 1: that can be their endowment if you figure five investment
Speaker 1: returned the fifty million dollars. And you know, at some
Speaker 1: point they'll get rid of the presses and they'll go
Speaker 1: to a pure digital operation. May not be you know,
Speaker 1: a time the next few years, at some point they
Speaker 1: will and you can run a pretty nice newsroom for
Speaker 1: fifty million dollars to say the least. So so the
Speaker 1: future of of media isn't completely hopeless, no, as long
Speaker 1: as there's wealthy people around to fundent. And we are
Speaker 1: seeing some business models emerging where media companies like The
Speaker 1: Atlantic has a really lucrative kind of conference business. Uh.
Speaker 1: You see a lot of woll Street Journal does a
Speaker 1: lot of conferences business inside er is just into that
Speaker 1: area exactly. The f t oh, you know, we really
Speaker 1: haven't talked about great story. I love ft alphaville is.
Speaker 1: I love that that blog which is outside the fire
Speaker 1: the pay wall, but you know, from from our perspective,
Speaker 1: it's a relatively inexpensive pay but like the Wall Street Journal,
Speaker 1: it's really and expensive, so we sign up for that
Speaker 1: as well. It's a really well regarded, well written paper,
Speaker 1: very credible, very thoughtful. Uh, and they break a lot
Speaker 1: of stories. But they were they were a little late
Speaker 1: to the game on the digital subscription strategy. But they
Speaker 1: really have when when you look at their digital subscriptions,
Speaker 1: they've really done well. Um they've got They're very smart
Speaker 1: about how to market it and and how to target
Speaker 1: the marketing campaigns to people who were reading story X
Speaker 1: versus story Why. I have said it's got to be
Speaker 1: since Murdoch bought the journal, I have said the f
Speaker 1: t is really should be the business section of the Times,
Speaker 1: and if the Times was in a healthier situation, they
Speaker 1: should actually reach out. But they can't. My plan B
Speaker 1: is this guy buys The Times and then buys the
Speaker 1: Ft to fold into it, and then you have a
Speaker 1: really dominant global paper, both US and and continental. Well
Speaker 1: that would be huge. I don't know if it's gonna
Speaker 1: happen to anything. By the way, I give a lot
Speaker 1: of free advice to billionaires. I don't know, because you know,
Speaker 1: buying a newspaper seems like such a smart strategy thousand fourteen.
Speaker 1: I don't know what they're thinking. It's not a business investment.
Speaker 1: It's a trophy exactly. The New York Times is a
Speaker 1: trophy The Wall Street Journal is a trophy. F T
Speaker 1: is a trophy, and obviously the Washington Post, where I
Speaker 1: have a column twice a month. Uh. And that's really
Speaker 1: why bizos. You know, you could have called me directly,
Speaker 1: could have saved them a lot of money. But um,
Speaker 1: it's really the changing dynamics, so I know you have
Speaker 1: to go somewhere else. I want to wrap this up
Speaker 1: on a positive note. The future of journalism, the future
Speaker 1: of financial reportage and media. Is it going to survive
Speaker 1: in some healthy format or is it going to become
Speaker 1: this little thing that's off in the corner. I'm more
Speaker 1: confident about business journalism than really any other part of
Speaker 1: the journalism world because and we see this when I
Speaker 1: was at W dot com. You know we uh, when
Speaker 1: I took over at W dot com have been around
Speaker 1: for about five or six years, they already had about
Speaker 1: half million subscribers. And why I left six years later,
Speaker 1: we had over a million. And you know, I'd like
Speaker 1: to say it is because of our great staff and
Speaker 1: how smart I was and all that, but the truth
Speaker 1: is people can see a direct relationship between paying for
Speaker 1: quality news, paying for quality business news and and getting
Speaker 1: something out of it. Right, now, is it just business
Speaker 1: news that people who willing to pay for? Are they
Speaker 1: going to be willing to pay for? I think nonsins
Speaker 1: I think increasingly, as as people want to understand the world,
Speaker 1: as we have a more globally connected world, and as
Speaker 1: people realize that there's some relationship between the quality of
Speaker 1: journalists doing the work and the quality of journalism that
Speaker 1: you get out of them, that that there will be
Speaker 1: increasing demand for it. Whether the demand will ramp up
Speaker 1: fast enough I don't know, but as you see, if
Speaker 1: you look at kind of any big business when it
Speaker 1: goes through some huge, gut wrenching transformation, there's a lot
Speaker 1: of the messiness along the way, and then eventually something emerges.
Speaker 1: And I think we're seeing some of that emerged now.
Speaker 1: And how long is it going to be before the
Speaker 1: unit a verse of of financial news in general media
Speaker 1: um is has find comfortable footing. How long do you
Speaker 1: think this transitional period is going to be? Are we
Speaker 1: through the worst of it or is there still a
Speaker 1: lot more wrenching things to come. I think that we're
Speaker 1: in for a long period of of of this, because
Speaker 1: you know, there's a Columbia business professor wrote her book
Speaker 1: called the end of competitive advantage as about how barriers
Speaker 1: to entry fall as quickly as as you erect them.
Speaker 1: I mean, in the old days, you would erect a
Speaker 1: barrier to entrying in in your business, and in the
Speaker 1: last five, ten, twenty years now, thanks to technology, as
Speaker 1: soon as you build it, somebody's out there trying to
Speaker 1: figure out a way around it. So I think what
Speaker 1: you need are journalism institutions that are much more nimble,
Speaker 1: much more technologically adept um. We've started at the j School,
Speaker 1: at the Journalism School, training students in computer science and
Speaker 1: coding and data and algor of them because we want
Speaker 1: the next generation of journalists to be much more adept
Speaker 1: at this stuff, and to be much more pliable and flexible,
Speaker 1: and to have the kind of dexterity to deal with
Speaker 1: unending technological change. You know what, I would be remiss
Speaker 1: and I know you have to run. I would be
Speaker 1: remiss if I didn't mention recode Mosburg right, the two
Speaker 1: technical Walt Mossburg is a legend at in technology at
Speaker 1: the Journal. That's just another example of no legacy costs.
Speaker 1: Launch a new model and immediately immediately hit the ground
Speaker 1: and and with traction and gained an audience. And it
Speaker 1: also shows the power of individual brands. So if you're
Speaker 1: I don't know how many Twitter followers karro Switcher had
Speaker 1: at the time that she left out Jones and started
Speaker 1: her own business, but I'm sure it was in the
Speaker 1: hundreds of thousands. So when she went from the journal
Speaker 1: to her new business, she took those followers with her.
Speaker 1: In the old days, if we went from the Wall
Speaker 1: Street Journal to the New York Times, your readers state
Speaker 1: at the Wall Street starting over. Isn't that interesting? And
Speaker 1: think about the kind of incentives that creates for journalists
Speaker 1: these days. If you can create your own audience, you
Speaker 1: can basically take that with you anywhere you go, and
Speaker 1: so that increases, you know, the incentives to do it,
Speaker 1: and it means that you have a lot more individual
Speaker 1: control over your career. And so the future isn't bleak
Speaker 1: for journalists at all. And the future of the media
Speaker 1: is going to be different than it is today. But
Speaker 1: there's reasons for optimism. And you know, there's a lot
Speaker 1: of great stuff to read online. And when you think
Speaker 1: about you're sitting there with an uh your iPhone at
Speaker 1: the doctor's office and in waiting half an hour you're
Speaker 1: not reading you know, US News and World Report from
Speaker 1: four weeks ago, where readers digest from last month. You
Speaker 1: have access to literally thousands or millions of sources the world,
Speaker 1: the entire world. I mean, isn't that a good thing?
Speaker 1: It isn't there something good about that? And you know,
Speaker 1: over time we will figure out how the businesses. We're
Speaker 1: always seeing some business models emerging. And opportunity to be
Speaker 1: able to sit at yourdentist's office and read the Johannesburg
Speaker 1: newspaper or listen to a radio station from Prague, or
Speaker 1: read your kid's blog all on the same device. There's
Speaker 1: something good about that. I think there's something fantastic about it. Well,
Speaker 1: that's an optimistic note we should end on. We should
Speaker 1: always end on an optimistic That's right. I've been speaking
Speaker 1: with Bill Gruskin, formerly of the Wall Street Journal, now
Speaker 1: with the Colombia School of Journalism. Bill, thank you so
Speaker 1: much for coming. Thank you, bry. This was a lot
Speaker 1: of fun. Yeah, this has been great and we'll see
Speaker 1: you again next week. You're listening to Masters in Business
Speaker 1: with Berry rid Holts on Bloomberg Radio.