Penelope Abernathy, the Knight Chair in Digital Media Economics at the University of North Carolina, Chapel Hill, says “Everyone likes to talk about how quality news is very expensive, but it pales in comparison to what the costs to sustain a two-century old legacy system of printing and distribution are,” adding, “The first is that they really have to come up with a timeline for shedding the legacy costs.”
See this full Leonard Witt Future of Journalism series video interview and transcript below. For alerts to upcoming Future of Journalism posts sign up on the Center for Sustainable Journalism home page.
Leonard Witt: Hi, I’m Len Witt, and I’m here with Penelope Abernathy. And I’ll let Penelope talk about who she is and what she does. We’re at the Yale conference that has to do with the new news ecology and who will pay for the messenger. So Penelope, tell us a little bit about yourself, first.
Penelope Abernathy: Hi there. I’m Penelope Muse Abernathy. I’m the Knight Chair in Digital Media Economics at UNC at Chapel Hill. I am a long time media hound. I spent the first half as a journalist, switched over to the business side after I got an MBA. And I have spent the last 20 years on the business side, working at institutions ranging from the New York Times, to Harvard, to the Wall Street Journal, to working with papers ranging in size from a small weekly in my home town of 57,000, all the way up to the Wall Street Journal and the New York Times.
Witt: Was that Phil Meyers’ Chair that you..
Abernathy: Yeah, I absolutely have Phil Meyers’ Chair. There’s a wonderful tradition set up by one person that went on for quite some time.
Witt: I’ll say.
Abernathy: The author of The Vanishing Newspaper.
Witt: And we put a conference on with him not too long ago called the Wake-up Call. Those are big shoes to fill. So tell me you’ve had a couple of papers here that I saw. What were the papers about and what’s your topic?
Abernathy: I am one of those bilingual people. I can understand what journalists are saying when they worry about the very important function they fulfilled in the 20th century, especially the latter half of the 20th century. Through a whole range of bringing to light not only the issues the public needed to be concerned about, whether it’s health care issues right now, or whether it’s a watchdog function, such as the Watergate era. So I hear what the journalists are saying as they worry about the crumbling business foundation for what sustained that journalism, at least in the last half of the 20th century. But I’m also trained by the business side and I’ve spent a good deal of time working with online methods of distribution for the last 20 years, beginning with NYTimes.com. I was the SVP of planning, strategic planning, and actually set the site up and was responsible for it for the two years before it actually became an entity.
So I’m very familiar with what the economics are in this new and changing environment. But also as a business person I’ve trained a lot on what the strategies are in other industries and how they’ve dealt with this very disruptive form of technology that’s hit everything from technology to the financial services industry. My concern is putting the two languages together and coming up during this time of transition, trying to understand what the trends are that are emerging, and what the potential is on the other side of this storm, as some might call it, to what will be left behind after the storm departs and the waters recede.
Witt: So what will be on the other side?
Abernathy: I think a lot of people looked at the internet as starting the golden age of communication and I think we do have the potential to enter into that. I think it will be a very different business model from what was sustained journalism in the last half of the 20th century. In reality, that was kind of an oddity in many ways. It was based on being, for the most part for newspapers, it was based on being a defacto monopoly, a defacto geographic monopoly. The internet destroyed that monopoly. And I think what will happen is that once they adjust to this new landscape we’ll thrive in it.
There are a number of things traditional news organizations need to do. The first is that they really have to come up with a timeline for shedding the legacy costs. The legacy cost of primarily the printing and distribution that date back for two centuries as quickly as they can, in part because that’s the most burdensome part of the cost structure for them. Everyone likes to talk about how quality news is very expensive, but it pales in comparison to what the costs to sustain a two-century old legacy system of printing and distribution are. And there’s another reason for doing that. Peoples’ habits are changing very, very, very quickly. All number of surveys have come out to show that the Gen-Xers or the Millenials, those under 25, have already organized their lives around this new technology, and I think those who are older are reorganizing their lives around it. So in addition to helping the balance sheet, if traditional news organizations shed those legacy costs, it also helps position them for the 21st century. And then I’ve talked a lot about where the new revenue is going to come from. It’s traditionally come, 85%, from advertizing. And I think we’re looking at some combination of both subscriber and advertizing continue to support it on the other side of the storm. There may be some market disruptions over the next 5 to 10 years, but it will sort itself out.
Witt: So you sound fairly confident that we will have high quality, ethically sound journalism that’ll keep the public informed so they’re good actors in the public square?
Abernathy: I think the good news is for the last two centuries, the U.S. has managed to put together an incredible system, and I’ve traveled a great deal the last 20 years on the business side for both the New York Times, The Wall Street Journal, and Harvard, and I was continually amazed at how vibrant the U.S. journalism was. That’s based in part on that it has a system for supporting itself that’s very different. It’s based in part on the wonderful legal decisions that were made in the 20th century that supported the First Amendment in a way no other country has really supported it. And so I think that, and what happened , too, if you look at it, while many papers have done public service, it’s also a good business choice to put together credible information and attract a community built around that credible information. I’m relatively confident somebody’s going to figure that out again in the 21st century. I hope the ones that were the 20th century standard bearers make the transition, and I think there’s a good indication they probably will. I think the brands that were very dominant and well known in the 20th century should be able to transition into the 21st. But I’m also sure others will, too.
Witt: Okay. So you sound to be an optimist. Is that correct?
Abernathy: I’ve been accused of seeing the glass 95% full.
Witt: Okay. Thank you very much.
Abernathy: Okay, Great.












