A User-First Framework for Sustaining Local News - Harvard ...

Discussion of journalism’s disintegrating business models is often framed in the
context of the “creative destruction” described by Joseph Schumpeter, the Austrian
economist, in his 1942 book, Capitalism, Socialism and Democracy. Schumpeter’s theories
power the popular, painful narrative beneath the stories of Craigslist crushing classified
ads, innovation toppling the old economic order of news before new models emerge to
pay the bills. 21
Kicking off hearings in December 2009 about the future of the news business,
Federal Trade Commission chairman Jon Leibowitz asked whether journalism is
experiencing Schumpeter’s creative destruction—”or simply ‘destruction.’” 22
The difference between the two looks a bit like the financials at many newspapers,
summed up well by Dan Balkin of the News & Observer in Raleigh, North Carolina:
Online revenue growing both in absolute terms and as a percentage of total revenue, but
not fast enough to make up for losses in the print edition. 23
The challenge is navigating what NYU professor Clay Shirky describes as the messy
breach created when “the old stuff gets broken faster than the new stuff is put in
place.” 24
As Shirky says, that’s “what real revolutions are like.” The revolution in journalism
has triggered the destruction of old value—about $1.6 billion a year in spending on
news, according to the Poynter Institute’s Rick Edmonds—before anything close to that
in new value can be created in its place. 25
The destruction in 2009 included the shut‐down of more than 100 weekly and daily
newspapers and the loss of nearly 15,000 newspaper jobs among more than 80,000 jobs
lost in non‐Internet publishing. 26
Assessing the landscape for news in the face of such losses, the annual State of the
News Media study produced by the Pew Research Center addressed the areas of
audience, values and revenue.
“The old media have held onto their audience even as consumers migrate online,”
the report found. The report observed that, in 2008, legacy news gained more audience
online than did sites not associated with existing newspaper or broadcast outlets. It also
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