The New Business Of News, with Ben Smith

Episode Summary

Executive Summary: The episode argues that journalism’s business model has been broken by Craigslist, Google, Meta, and changing consumer behavior, but that journalism as a function still matters. Guest Ben Smith says local news is the biggest casualty, national and niche reporting remain strong, and AI may raise the value of trusted human brands even as it disrupts traffic and jobs.

Main Topics: The collapse of the old journalism business model (Priority: 5/5): Bethany, Lucia, and Ben trace media’s decline to the loss of classified advertising, the rise of digital platforms, and the shift from legacy ad-funded newspapers to fragmented online distribution. Local news as the core casualty (Priority: 5/5): The discussion repeatedly returns to the idea that local news has been hollowed out, weakening coverage of crime, crises, and the reporting pipeline that once fed national stories. Journalism versus journalists (Priority: 4/5): The speakers distinguish the social function of journalism from the employment of journalists, arguing that fewer jobs does not automatically mean worse information production, though it does raise democratic concerns. Platform power, social media, and consumer behavior (Priority: 4/5): Ben argues Facebook, Twitter, Google, and later AI search accelerated the decline, but also stresses that consumer preferences and the toxicity of politics helped drive people away from legacy media channels. Funding models for the future (Priority: 5/5): The conversation explores subscriptions, advertising to elite audiences, nonprofits, donations, and reader-funded investigations as possible replacements for the old ad-supported model. Investigative journalism and its economics (Priority: 4/5): The guests discuss why investigative reporting is high-impact but hard to monetize, and why nonprofit or donor models can help but cannot fully solve the problem of scale or independence. AI, fragmentation, and future green shoots (Priority: 3/5): Ben sees AI as a tool that can help research and raise the value of trusted reporting, while podcasts and niche outlets suggest a fragmented but still functioning media ecosystem.

Key Arguments: Old-school media was mostly funded by advertising, not subscriptions; once classifieds moved to Craigslist and ads moved online, the traditional model broke. Local news was the big commercial engine of 20th-century journalism, and its collapse created the deepest informational and democratic loss. The internet changed distribution, but platforms also made a business choice to rely on user-generated content and avoid paying for journalism. Journalism can survive even if the number of journalists shrinks, but the loss of local reporting weakens the monitoring and certification functions of the press. National and trade journalism are in better shape than local news because niche audiences can pay directly or attract high-value advertising. The social-media era weakened because users became tired of divisive, toxic public spaces, not just because of technical design flaws. The idea that the old press was a golden age of accuracy is exaggerated; newspapers and columnists historically published errors, fiction, and propaganda too. Investigative journalism is valuable precisely because it can produce high-leverage accountability, but it usually requires surplus margins or nonprofit support. Reader-funded investigative journalism risks becoming demand-driven and ideological, rather than surfacing the unexpected stories that matter most. AI is likely to automate low-value, churny content rather than replace trusted brands; it may increase the premium on human-edited, reputable journalism.

Data Points: Newspapers lost since 2005: 1 out of 4 newspapers no longer exists - Cited from a New York Times piece about the decline of traditional media. Journalists cut by major newspapers: Hundreds of journalists eliminated between The New York Times and The Washington Post - Used to illustrate the scale of industry contraction. Estimated platform sharing from one outlet: 80% of revenue goes to content - Ben contrasts the old cable/content model with how platforms avoided paying comparable shares. Podcast market share leader: Joe Rogan has about 4% of the market - Used to argue podcasts are fragmented despite a visible top name. Investigation cost estimate: $150,000 to $200,000 - Ben says a strong investigative journalist is cheap relative to the value they can create. Hypothetical hedge fund manager pay: $30 million to $40 million a good year - Comparison used to show investigative journalism can be a high-leverage investment. Industry Dive sale price: $500 million - Example of a niche, industry-specific news business with a successful model. The New York Times warps attention: Wildly outsized import - Describes the Times' impact on U.S. opinion and scrutiny.

Pivotal Quotes: "The transmission of information and the formation of reputation are two essential elements for a market economy to work well." — Bethany McLean: Opening framing for why journalism matters economically, not just professionally. "I think that there is definitely a big issue on local news." — Ben Smith: Ben emphasizes local reporting as the most damaged part of the media ecosystem. "I think AI is a very cool tool... it is at least right now sort of raising the value of what was already the higher value stuff." — Ben Smith: Ben’s view that AI will automate low-value content but increase demand for trusted journalism.

Implications: The media future looks smaller, more fragmented, and more dependent on niche audiences, elite brands, and nonprofits. The biggest unresolved risk is local journalism’s collapse, which could weaken accountability, democracy, and shared public understanding.