03/26/2009 05:12 am ET | Updated May 25, 2011

The Media Business: It's the Perspective, Stupid

Over the weekend, I read The New Republic's report on the Politico -- an article that, unto itself, exemplifies the incestuous, self-absorbed problems in the journalism business that the article sought to examine.

In light of the media's self-absorbed chatter about its own economic future (note to editors: writing about your business's plight is not a way to attract new readers), the piece looks at the Politico's business model, its often irresponsible propaganda packaged as "reporting," and above all else, its singular focus on catering to a tiny audience of media and political elites in Washington, D.C. Of course, the New Republic suffers from the very same myopia, as evidenced most recently by the fact that it is a Washington-centric publication publishing a long article on another Washington-centric publication. Indeed, the magazine's circulation has plummeted not only because it spent so much of the last 8 years cheering on the Bush administration's neoconservatism, but because, like the Politico, it is written as if its target reader is a six-figure K Street lobbyist or congressional staffer, and in terms of building a mass audience, there just aren't a lot of those people.

The numbers really prove the point. Consider, for example, the Politico bragging that it attracted 4.6 million unique visitors in September of 2008. Now remember, the Politico employs 36 full-time reporters (and pays some of them in the neighborhood of $250,000 a year), an entire editorial staff and three full-time publicists. It is supported by a robust budget that pays for promotional ads for itself, operates out of a super-expensive tower in Rosslyn, Virginia, and is bankrolled by a multimillionaire banking and media mogul. For all that, they got 4.6 million unique visitors at the height of the election season.

By comparison, OpenLeft, which operates with 2 part-time employees at a fraction of a $250,000-a-year salary, no promotional ads, and no multimillionaire mogul behind it, attracted 1.2 million unique visitors in the same month. In other words, OpenLeft achieved 25 percent of the traffic that the Politico did, at far, far less than 25 percent of the investment. The same comparison can likely be made with DailyKos. It has more writers, more revenue and more promotion than OpenLeft, but certainly not nearly as much as Politico. And DailyKos got 74 million visits in September 2008, to Politico's 4.6 million.

There are two really important lessons from this.

First and foremost, you have to find yourself a trust fund baby willing to invest an ungodly pile of cash (and willing to lose that pile) if your goal is to generate traffic and reader interest in publications who promote the Versailles perspective -- that is, the perspective that focuses only on talking to, debating, and communicating with people inside the Beltway. There may be a proportionally big audience for that inside the Beltway, but that pool -- Washington, D.C. -- is not all that big, and as an audience, already cannibalized and oversaturated. In terms of a mass audience, the Politico's stunningly miserable investment-to-readership ratio (not surprisingly, depicted as stunningly good in the New Republic) is only the latest example that there clearly isn't a huge audience for the Versailles perspective in the much larger pool of the United States of America as a whole. And so to even try to create a decent-sized audience, you need to have a private benefactor like Rupert Murdoch or (in the case of the Politico) Robert Allbritton who personally bankrolls the operation, because the audience itself isn't big enough or interested enough to support it.

On the flip side, there is ample evidence to suggest you can create a pretty sizable audience in a cost-effective manner if your publication's perspective is what we can call The Rest of Us -- a perspective that (whether conservative, progressive or non-ideological) believes the target reader isn't a K Street lobbyist, but just a regular normal American and therefore focuses its work on how public policy affects ordinary people, and how ordinary people can impact public policy. OpenLeft and DailyKos's perspective are progressive-flavored examples of this, but so are other blogs like Firedoglake and certain magazines like In These Times, which operates on shoestring budgets and whose writing is almost singularly focused on the Rest of Us perspective. The same dynamic is at work for some television shows. Rick Sanchez's CNN slot, for instance, has built up solid ratings. Likewise, MSNBC's Countdown and Rachel Maddow Show have garnered huge audiences. Sure, these shows benefit from being on major networks, but it's safe to say they are also overperforming beyond their built-in platforms because of their Rest of Us perspective.

The problem -- especially in print and Internet publications -- is how most of the big-time money flows to publications that focus on a Versailles perspective rather than a Rest of Us perspective. There are obvious reasons for this. For instance, many media moguls like the social prestige of owning outlets that give them status inside the Beltway. Some, like Murdoch, use their investments in Beltway-focused publications like The Weekly Standard as a political and ideological weapon that helps them secure the public policies that are profitable for the rest of their business. And others believe that the only way to build good ad revenue is to create an elite readership, because that will attract elite, high-end advertisers.

But on top of all this, it's a safe bet that more mogul money (as opposed to actual audience) flows to the Versailles perspective than to the Rest of Us perspective because the latter is dangerous and anathema to the demographic that privately invests in the media business. For the super-wealthy investor class, a country whose political conversation is dominated by Beltway elite talking to Beltway elite is desirable, because it ultimately preserves the status quo. How? By confining the parameters of the political debate to boundaries that make sure no real change happens.

In the Versailles publications, for example, the debate over globalization is whether we should pass some corporate written trade deals, or every corporate written trade deal, the debate over health care is whether to subsidize the private insurance industry or do nothing at all, and the debate over economic policy is whether to throw $1 trillion or $10 trillion at the private banks. The list is endless (and now -- hilariously -- the New Republic is taking to attacking media critics as the source of the media industry's troubles).

Obviously, the confinement of the political debate on Beltway elite terms is bad for democracy, and goes a long way to explaining the rootsgap (ie. the huge gap between what's considered "mainstream" in Washington, and what polling tells us are mainstream positions in the country at large). The Washington media is obsessed with blogging, twittering and talking about itself exclusively to itself -- and really isn't interested in communicating with the country at large, much less representing its opinions, beliefs or aspirations.

That said, I think this could all change. The hope is that as the journalism business comes under increasing economic pressure, those investors looking to revive it will leave their ideology aside and evaluate a publication's perspective as part of their overall evaluation of sustainable business models for the future. I say that's the "hope" because it's not yet clear that is what will happen just yet, as evidenced by the high-profile conversion of Newsweek. The magazine, suffering from declining readership, has opted not to make itself more vigorously focused on reaching a mass audience, but instead more focused on trying to become a "thought leader" -- industry jargon for becoming a conservative-leaning journal focused on an elite readership already being cannibalized by the Politicos and New Republics of the world.

My guess, though, is that ultimately, other than the stratospherically rich who can afford to lose money on their personal ideologies, most regular investors don't have the luxury of focusing on their social prestige on the Washington cocktail party circuit -- they just want to make money. And if that's the case, they will come to see the ample evidence showing that in the political journalism business, a Rest of Us perspective is a far safer economic bet than a Versailles perspective. The ratio of investment to readership in the blogosphere (inherently a Rest of Us medium) tells that story better than anything -- but there are plenty of other examples everywhere you look.