The End of the Newsroom as We Knew It

In 1937’s “The Nature of the Firm,” Ronald Coase introduced the idea that businesses exist as the most efficient way to manage information and activity in pursuit of an economic goal. The later Transaction Cost Theory argues that the internal growth (the addition and specialization of roles) in a business occurs when the external cost and coordination of a function is less efficient or more expensive.

Coase's counterfactual: in a hypothetical market with perfect knowledge, perfectly aligned incentives, and perfectly frictionless coordination, we would all be independent entrepreneurs working with whichever partners the free market provided. There would be no corporations, just a series of agreements temporarily binding together our individual portfolios of shared projects.

Eighty-nine years later, Coase’s thought experiment is less hypothetical. Digital technology does allow vast amounts of information to be collected, analyzed, and shared; contracts to be one-click negotiated; and collaboration to be managed between loosely coupled partners without a traditional top-down chain of command. We have fractional executives supporting HR, technology, finance, or marketing across multiple organizations; tasks performed by gig workers from Uber, DoorDash, Upwork, or Fiverr; software and services from vendors like Zoom, Slack, or Mailchimp; infrastructure providers like AWS or Google Cloud; and shared effort between organizations made possible by the use of those tools.

Perhaps nowhere is this disaggregation of the firm more relevant than in news. Why do we need mega-media conglomerations when an act of journalism can be performed by a single individual armed with a cell phone and a TikTok account? And since “trust” seems to accrete more effectively to individuals than institutions—are not independent journalists (call them influencers or creators if you want) the more rational solution in the digital age?

I wrote about that recently, and the answer is yes—in a future that will be unevenly distributed and in constant flux. Journalism as a practice can be an individual act, but journalism as the fifth estate is inescapably pulled toward the accumulation of the social and economic power needed to hold accountable other institutional centers of power. Journalism will get smaller before it gets bigger again, and in ways unrecognizable to current assumptions.

So what will the future organizational design of news look like? How will funding, infrastructure, training, and operations be arrayed, and how will we consider the build, buy, or rent decisions those functions all demand? The flow of capital (as well as the management and coordination of information) will dictate the terms, and it is the new division of labor between these roles we are currently struggling to manage.

We are too familiar with the old industrial model of business and need new metaphors to make sense of the transformation. To describe the emerging information ecosystem sector as a “meta-firm” is one useful way to think about it. The future of journalism increasingly resembles a disaggregated corporation: loosely coupled assemblages of funders, owners, specialists, service organizations, tools, platforms, and technologies. From a distance—if you squint—this can look like a traditional media organization. Up close, the picture is more complex, dynamic, and currently undefined.

Consider this thought experiment as a path to a better definition:

• Philanthropy is the new media holding company. It owns the capital, identifies challenges and solutions, and the communities in which to invest. In doing so, it funds and guides local operations. (There will always be commercial newsrooms, but we are talking here about a new model to understand what is changing.)
• Journalism Service Organizations (JSOs) are the corporate middle managers and infrastructure: providing tools, training, research, and strategic support. They help distribute resources, establish standards, and reduce friction so that the “firm” can remain focused and agile but act with the capability of larger traditional organizations.
• Newsrooms are the corporate divisions, each with a unique vision, mission, brand, leadership, product, and market. And as they try to optimize local operations, they are in constant negotiation with their corporate parent for resources, with JSOs for strategic and tactical support, and with vendors for services.
• Platforms and vendors are… still platforms and vendors.

In its most untamed form, none of this simplifies the division of labor for newsrooms or de-risks decisions about funding, operations, or news coverage. But the past decade has seen the explosive growth of an alphabet soup of JSOs—INN, LION, LMA, LMC—which package products and services to reduce complexity for their members. And we have recently seen foundations like Knight talk about infrastructure and shared services, and Press Forward work to categorize and clarify the costs and services of JSOs and ecosystem researchers—like a corporate parent might.

Thinking like this about the constellation of players in the space helps by improving our mental model of “how do things work?” And that helps us better answer today’s questions: what is the best option for a new CMS, analytics tool, or email provider? How do I structure a partnership, should two newsrooms merge, and what about collaborating with independent creators? It also makes clear we all need to reconsider and renegotiate our roles in this system.

Foundations must fund infrastructure, not just outputs, and ask grantees:

• What functions are you internalizing that could be shared?
• What coordination points are blocking impact or operations?

JSOs must continue to lower transaction and coordination costs across the network and ask:

• What friction do we reduce (time, cost, risk, expertise gaps)?
• And for whom?

And journalists and newsrooms need to understand how to manage these operational tensions and also, by the way, serve communities and achieve sustainability:

• Where does institutional scale strengthen journalism—and where does it slow us down?
• Which capacities are better shared, rented, or coordinated externally?

Part of rebuilding journalism is solving a basic organizational mismatch. Too many functions are still structured as if coordination were expensive, too few shared systems exist where coordination is now cheap, and there is insufficient acceptance that effective meta-firms require more top-down guidance—not control—to operate efficiently.