Away from the main Congress venue at the World Economic Forum in Davos last week, a group of media editors and CEOs huddled for a day to ponder the future of news. Will the quality journalism they take pride in practising today continue to have the resources needed to nourish it?
The Americans were clearly anxious.
Wall Street is punishing them for the print media's lack of growth prospects in the face of the rise of digital media.
Young readers are steadily abandoning the traditional newspaper and news magazine, preferring instead to access information on the Internet.
With their stock market values held down, many media companies are resorting to desperate measures. They are slashing staff and cutting back foreign coverage to try and improve margins. But their margins are not at all depressed; they remain in healthy double digits.
I asked Mr Richard Smith, chairman and editor-in-chief of Newsweek, what could be done to counter the influence of Wall Street. He responded with this piece of Warren Buffett insight. The mighty American investor had asked this astute question: Would you rather be a mediocre newspaper with a 20 per cent margin, or a great one with 18 per cent?
That poser sums up neatly the challenge facing every American media owner with a large traditional media property among his assets. It also expresses his obvious concern over what that means for quality journalism in the future.
The Americans, along with their European counterparts present, were not a bunch of scaremongers. They were from the top layer of the Western media establishment, representing titles like Newsweek, Businessweek, the Washington Post, the Financial Times and broadcasters like the BBC.
They all want to practise serious journalism. But the question is, how do you pay for it?
Serious journalism is an expensive business. Skilled journalists do not come cheap; good work takes time to produce, and if you base writers in key capitals of the world, the expenses add up.
The problem is compounded by what so far looks like an irreversible drift to what might be called "sound bite" journalism among the young. This generation does want information, but they prefer to access it electronically, on the Net and the cellphone. However, the bulk of the revenues, from advertising, still comes from the traditional platform, the newspaper. Online ad revenues are a fraction of newspaper revenues, but are growing much faster.
The drift to the Net is gaining pace in America. In Europe, too, where, a European publisher at Davos lamented, they have collectively lost a million copies a year in the last five years.
What happens to the supply of quality journalism in the West has implications for the rest of the world's media. For the foreseeable future, no non-Western media organisation is in a position to match their output. They have far more resources spread over more of the globe.
Those without the same resources rely on them to a significant extent to give their readers a reasonable reading of what is going on the world today.
Certainly, Singapore newspapers do. The Straits Times, for instance, may have the most extensive network of foreign correspondents of any Asian English-language newspaper, stretching from Tokyo in the north down to Indonesia. But even with its considerable financial strength, it cannot adequately cover the entire globe.
It has no option but to buy output from the West. When, for instance, Hamas won the Palestinian election so unexpectedly last week, Singapore newspapers depended on Western sources to tell the dramatic story, and assess its implications. The story has to be multi-sourced to be meaningful. That means it is not enough to get the news from Palestine itself. The story is incomplete without input from other key Arab capitals, Jerusalem, Washington and from Europe and Moscow.
Or take that other big headline: General Motors sinks deeper into the red. The world would like to know whether it will lead to a more protectionistic America.
Or that triangular relationship, the US, China and Japan. Tracking it accurately takes painstaking -- and expensive -- work because the story is shaped in three countries, not one.
The list of important news developments is almost endless. They are part of the globalisation story. As the major economies of the world become more integrated, the line separating a domestic news story from a foreign one is blurring. Should political volatility in the Middle East worsen as a result of Hamas and Iranian nuclear ambitions, what will be their impact on the price of oil, as well as relations between the major powers, including China and India?
With globalisation, more and more foreign stories will have a local dimension. Our stock market cannot be shielded from these developments; nor will the corporate health of many Singapore companies. In short, we must know what is going on in the world. Our livelihood depends on it.
Fortunately, the answer to the Warren Buffett question is still unequivocally favourable in a few major media companies in the West. The Sulzberger family that owns the New York Times still believes in producing a great newspaper and can resist shareholder pressure, at least for the foreseeable future.
Not everyone can. Note the recent troubles at the Knight-Ridder group, the second-largest media group in the US. The Ridder family that owns the biggest piece of it is wilting, as shareholders are dissatisfied with their still respectable margins. It was 19 per cent in 2004. On Tuesday, it reported more bad news, a 22 per cent decline in fourth-quarter profits compared to the same period a year ago.
American editors are watching the siege of Knight-Ridder very closely. They believe if it does surrender to Wall Street, then the pressure on them will only intensify.
If, in time, serious journalism is starved of the resources to do a credible job, is there an affordable substitute?
Weekly or monthly publications are cheaper to produce. But they will lack timeliness. The BBC is public-funded, but its core competencies are breaking news and visuals. The news agencies sell on speed of news delivery. Op-ed material is not their business model.
Well, there is always popular journalism. It is on a per head basis cheaper, and time and again, it has been proven to be a sure-bet way of retaining and growing readership. Indeed, many serious newspapers have already succumbed, and opted for this short-term, less painful solution to shareholder pressure. It is really not a substitute for quality journalism. But it can sometimes generate enough cash to support serious journalistic work.
So what should media companies do to secure the future of (serious) news? A South Korean publisher I asked told me in all seriousness: "Find a godfather." Indeed, regional newspapers in his country are already doing this. They allow themselves to be bought out by construction companies. Of course, these companies find it convenient to have the media on their side -- but it is not quite an arrangement that favours credible journalism.
There is another thing newspapers can do. A Washington Post acquaintance who was also in Davos told me they build other revenue streams. In the case of the Post, they have a profitable educational services business.
Other editors saw refuge in family ownership. For the Sulzbergers, for instance, the New York Times is a precious family heirloom they will be very reluctant to degrade.
Rupert Murdoch has another strategy: He relies on the profits from popular journalism -- The Sun tabloid in London, for example -- to finance his pursuit of quality journalism in other parts of his empire like the London Times group of newspapers.
Perhaps, the editors at Davos could be accused of being self-serving. That underestimates the seriousness of the problem. For there are much larger issues arising from this turbulence in the media landscape.
For instance, what are the implications of a less well-informed world on society at large? How will the man in the street cope with the rapid changes in the global economy? Will they fully understand why painful restructuring is the only meaningful response to the rise of China and India? What will that mean to governments that rely on the popular mandate to govern? Indeed, what will be the implications, too, for Wall Street whose health depends on continued global economic growth?
The future of news, therefore, is not a matter for editors and journalists alone to ponder.
News, like energy, lubricates the global economic engine. Jeopardising its supply does nobody any good.
Cheong Yip Seng is editor-in-chief of the English and Malay Newspapers Division of Singapore Press Holdings. He attended the World Economic Forum in Davos last week.
