A Newspaper Paradigm Shift?
If you go to school for journalism, one of the tenets drummed into your head is the sacrosanct divide between the editorial and business sides of a newspaper. There is supposed to be almost no communication between the two sides, and certainly no collusion: i.e., you don’t want an investigative series on a failed chemotherapy drug to be sponsored by a pharmaceutical company that makes a rival drug.
This firewall hasn’t always been so strong, and it is probably stronger in the U.S. than anywhere else in the world. You can feel the friction every time some newspaper announces it is going to sell ads on its front page: critics respond as if the Vatican had just announced it would be selling birth control.
But these are getting to be desperate times for newspapers and, to quote Shakespeare:
Diseases desperate grown
By desperate appliance are reliev’d,
Or not at all.
So it was fascinating to read this article from the L.A. Times about how the Times itself is trying something new:
Searching for new sources of revenue, Los Angeles Times Media Group is getting into the real estate business.
On Monday, Times Media Group and other partners will launch ZetaBid, a business that will auction foreclosed homes and other properties. The company would also run a web site where the properties could be viewed.
The other partners are London-based GoIndustry-DoveBid, an auction specialist, and CataList Homes of Hermosa Beach, a real estate brokerage. The partners will share fees paid by the buyer on each home sold.
The venture is the latest effort by the struggling media company to tap additional revenue streams beyond newspaper advertising. The media group also operates revenue-sharing ventures through its Cars.com and Apartments.com classified-advertising enterprises.
Newspapers are, above all, collectors, synthesizers, and purveyors of information. In past decades, the demand for information has skyrocketed, as have the channels of distribution. The former would seem to have benefited newspapers, but their business models couldn’t properly take advantage; the latter has definitely harmed newspapers, but there is no reason, really, that it could not be turned around to help them.
Sam Zell is the brash and contrarian new owner of the L.A. Times (and other papers) — and many journalists see him as a half-brother of Satan. With moves like these, however, I wonder if he will instead someday be viewed as a messiah.