Internet media: publishing in the clouds?

The challenges facing the newspaper industry is as well documented as they are worrying for journalists working in them.

I’ve worked in the industry for a decade during which time a job in the media was widely seen as safe in the same way that booze and guns are defensive havens for investors - to buy stocks in, that is - during tough times.

How times change. In the past two or three years, there has been an increasing sense of panic about how newspapers and media groups are going to embrace the internet.

This sense has been heightened by the collapse of the Los Angeles Times and its parent, the Tribune Company.

Of course, the world is in the grip of economic upheaval not seen since the Second World War, with an ever-widening spread of companies seeking to cut costs - read jobs - and protect their businesses.

But the fears of redundancy have been contrasted by the boom in innovators who appear better equipped to spread news over the world wide web.

Sites such as MySpace, Facebook and social news sites such as Digg use web 2.0 interactivity to allow users to create and share text, pictures and videos in ways that make traditional reporting pedestrian - to say the least.

Digg has long been held up by the technorati as a pioneer of this movement by replacing the editors that decide the news agenda of the day with its ‘Digg’ voting button.

It has developed increasing sophisticated ways of doing things such as allowing users to align themselves with other people who like and dislike the same stories as they do.

Furthermore, the start-up - founded by internet web 2.0 posterboy Kevin Rose - has the backing of Microsoft with a three-year advertising deal.

It is enough to make you cry.

But things aren’t so rosy for Mr Rose, according to two reports floating around the internet.

The first, by Business Week, dug into the figures of Digg and found that last year the company posted a loss of $2.8 million. While Digg generated $4.8 million, it spent $7.6 million.

In the first nine months of this year, the company spent $10.4 million while taking in only $6.4 million - creating a loss of $4 million.

An analysis by Gawker notes that while newspapers are in decline, they still generate cash - a luxury that tech start-ups don’t have.

That said, the fact that start-ups are struggling in the marketplace should not take away from the challenges that the newspaper industry faces in trying to adapt to the changing needs of its readers.

Here’s an interesting video from a panel of the Nieman Foundation’s on the future of journalism...