Anyone who claims to know how the future of news media will unfold has some big crystal balls.

Most of us, inside or outside journalism, figure it’s somewhere between reporters being forced to work for Rupert Murdoch or some other kingpin engaging in questionable practices worldwide across multiple media platforms, or writers replaced by Facebook-addicted teenagers blogging in their underwear from their folks’ basement.

Here in central Illinois, the leading source of journalism, the Peoria Journal Star, in June showed the weaknesses and strengths of the “legacy” media. Within hours, a power outage shut down the paper for the first time since workers went on strike in 1958; meanwhile, its newsroom admirably showed the value of news judgment and professionalism by not following the World Wide Web pack and repeating a “mob” story that neighbors and police doubt even happened.

This summer—the 30th anniversary of Knight-Ridder’s Roger Fidler having developed the first electronic tablet—newspapers’ circulation and classified ad sales are down, manufacturing costs are up, the economy has depressed traditional advertising, and digital ads aren’t yet making up the difference.

News media creation and consumption have shifted. New and old outfits alike elbow each other for ever-smaller slices of the revenue pie. The Internet seems easier, quicker and cheaper, for advertisers as well as content providers and consumers. The Internet also makes it easier to gather and deliver news, but its speed means some checks and balances are discarded—such as verifying that something’s true, like Peoria’s “mob.”

Those who do the work are increasingly overworked and underappreciated. Dispirited staffs feel exploited, for good reason. Besides layoffs, additional work and unpaid overtime, wages at some smaller newsrooms are so low that those who feel “called” to journalism are eligible for food stamps.

The short-sighted cry to “do more with less” results in a “hamsterization” of understaffed newsroom employees running nonstop on treadmills—reporting, writing, shooting video, posting blogs—in a stressful atmosphere that others for years recognized as “speedups.” Frustration mixes with fear at the folly of some decision makers.

“How do you expect the dedicated and loyal reporters at the [Akron] Beacon Journal to keep putting out a quality paper when you're eliminating nearly a quarter of the reporting staff?” wrote journalist Mark Schlueb in an open letter to his bosses. “You faceless corporate hacks…scream that circulation must stay up, but then you order arbitrary budget cuts that force the elimination of entire sections of the Sunday paper. And when that's not enough, you order layoffs that eliminate the very employees who have helped keep circulation from falling. Seriously, the kid who changes the oil in my car could run Knight Ridder with more foresight than you.”

Overall, newspaper employment levels are roughly 40,000—about the same as the 1970s. But there are fewer foreign correspondents and even statehouse reporters, down 30 percent nationwide. So it’s not surprising that important stories aren’t being covered, which Steven Waldman concedes in his report for the FCC, The Information Needs of Communities: The Changing Media Landscape in A Broadband Age. There are fewer reporters covering fewer local beats, and a disappearance of basic matters of public record, such as bankruptcies.

Local TV remains a major source of news—more than 25 million viewers watch local newscasts, according to the Project for Excellence in Journalism, compared to newspapers’ 42 million weekday circulation. But as Waldman notes, local TV news is thin on “accountability reporting” of local and state government. Broadcast journalism has also suffered from losses in advertising and audience, and has laid off people in smaller newsrooms. Some dropped news or rebroadcast other stations’ newscasts—seen here in central Illinois, with two companies providing news for five stations. Plus, local TV newscasts cannot replace the depth newspapers have provided for decades. In fact, a 1999 study of 59 local news stations in 19 markets found that 90 percent of all TV news was crime, accidents or scheduled events.

Most commercial radio stations have abdicated their obligation to provide news as part of operating in the public interest. There are a few local, web-only news sites, such as the St. Louis Beacon and the Voice of San Diego. Elsewhere, Talking Points Memo has done award-winning investigative reporting, and AOL is trying to bolster local news by creating bare-bones local sites, investing $120 million in its patch.com group of “hyper-local” endeavors in 18 states.

But according to research by the Society of Professional Journalists and the Association of American Editorial Cartoonists, 95 percent of all original content online is from reporting generated by newspapers. Further, newspapers’ web sites drew an average monthly audience of 110.8 million unique visitors in the second quarter of 2011, according to July ratings—more than 64 percent of all adult Internet users.

Some Background…
Similar change has happened before, from the chaotic transition to “horseless carriages” and Hollywood adopting sound to the generation of electricity and the arrival of broadcasting. There were layoffs and lawsuits, bright ideas that went dark fast, and buyouts and bankruptcies galore.

Journalism itself has changed, too, from a dependence on political parties (witness holdover names such as the Mason County Democrat and the Bureau County Republican) to commercial opportunities that arose when central cities grew dramatically and big-retailer advertisers emerged to serve them, from scurrilous, even prurient tales to an uncomfortable deference to authority, whether government or business. Journalism’s mix has also changed. Noncontroversial material like sports and feature writing is up; local hard news and investigative reporting are down.

The imminent demise of print media has been repeatedly predicted due to the arrival of radio (in the 1930s), television (’50s), cable TV (’80s), the Internet (’90s) and LinkedIn, Twitter and who-knows-what-next (ever since). But newspapers still have 400 million sets of eyeballs buying at least one newspaper every week.

Meanwhile, the journalist’s calling is unchanged: Tell folks something they didn’t know a minute ago, and make people think, cry, laugh, argue or take action. Whether with cameras or microphones, print or HTML, journalists and news fans alike ask, “What’s happening? What’s interesting? How are we affected?”

Journalism is necessary. It helps explain complex issues and events, and it alerts communities to opportunities and concerns. It’s “as vital to the healthy functioning of communities as clean air, safe streets, good schools and public health,” according to the Knight Commission on the Information Needs in a Democracy. (Full disclosure: I have no relation to it or Knight-Ridder.)

People want and need to know stories, information and informed opinion. These are created by people who work in good faith to provide it all, but who need a business structure in which to work. “Something is gained when reporting, analysis and investigation are pursued collaboratively by stable organizations that can facilitate regular reporting by experienced journalists, support them with money, logistics and legal services, and present their work to a large public,” report Leonard Downie Jr. and Michael Schudson in The Reconstruction of American Journalism.

A free press was protected in the Bill of Rights not because it was a heck of an investment, but because it’s important for self-governing.

A Broken Model
“Business” is not bad. Bad business is terrible. And the news media’s biggest problem is its business model, says Bill Day, an American University professor and media exec with the Howell Creative Group. Many would argue that stems from flailing executives who fail to appreciate their industry, its climate and the audience.

“Ownership of newspapers and television stations became increasingly concentrated in publicly traded corporations that were determined to maintain large profit margins and correspondingly high stock prices,” reported Downie and Schudson, with the subtlety of a U.S. statesman talking to a Pakistani diplomat.

It didn’t happen overnight. Ten years ago, Jay Harris resigned as the San Jose Mercury News publisher when the paper’s owner demanded cuts he considered harmful. He didn’t blame competitors on the Internet; he pointed to bad business. “Market pressures are undermining the support required [for journalism],” Harris said. There’s “tyranny of the market, and the threat it represents to the historic and noble mission of American journalism.”

Savvy businesspeople know that “past performance is no indication of future returns.” Nevertheless, a few assumed newspapers that made 20 to 40-percent profit margins always would. So they borrowed like there was no tomorrow.

But there was. And the business was different than it was yesterday.

Now, many of today’s news media owners are saddled with corporate debt that’d make the calmest Tea Partier gasp (or laugh). Servicing the debt became more troublesome with increased competition and the Great Recession, so some resorted to saving money by eliminating pages.Others sought to boost profits by laying off the people who produced stories. (It’s almost inevitable that people whose connection to journalism is limited to listening to talk radio from New York would conclude that if all journalists are eliminated and no pages are printed, the company will really make some dough.) Incidentally, local newspapers themselves still make profits, but indebted parent companies need it and take it away.

Apart from business mistakes are the reporters who try hard to do good work. “Reporting is our highest journalistic priority,” writes digital-first advocate Jeff Jarvis. “Telling stories will always have a role. But journalists have more roles to play today.”

These roles depend on stories and methods of delivery, and delivery systems can alter the message. There may be pressure to create online content that gets the most clicks, even if it’s worthless, sensationalistic or even false. Another pressure is expecting people to pay for what they use. A Harris Poll found that 80 percent of us are unwilling to pay for online news. Yet a new Nielsen survey shows that 76 percent of those with smartphones are willing to pay for news apps. After all, people now routinely pay for music downloads and streaming movies (although there are fewer music and video retailers).

Questions & Experiments
This is an anxious time, but an exciting one. Reporting hasn’t changed, despite different tools and formats, and a money pot that sometimes seems to leak like an Avanti’s colander on Monday’s Unlimited Spaghetti Night.

Is there enough financial support for good journalism in small and mid-sized markets? Yes and no. “There may only be enough ad revenue in mid-metro markets (and smaller) to maintain one substantial journalistic operation,” according to Newsonomics author Ken Doctor. “Not one newspaper and one local broadcaster. But, one, presumably-combined text and video, paper and air, increasingly digital operation.”

National Public Radio, serving some 26 million listeners daily, is growing. Its Morning Edition program draws seven times the audience as Fox News’ highest-rated news show, and NPR is building on its listeners to grow online page views 87 percent in a year, to 50 million, Nielsen reports. NPR is still innovating, planning to offer text, video and data links as well as audio in its revamped Digital Services program.

The Chicago Tribune, emerging from bankruptcy, revamped its paper in June, and additional staffers, more pages and greater depth have earned a good reaction.

Last month, Time magazine launched its “all-access” plan for print, tablet and online use for $30 a year.

Amazon is releasing a general-purpose Android tablet this fall to compete with Apple’s iPad and Sony’s forthcoming device. Unlike Amazon and other booksellers’ single-purpose gadgets like the Kindle or Nook, tablets can deliver journalism, play music and show movies—so companies like Amazon could sell tablets as “loss leaders” knowing they’ll make money selling books, tunes, films, etc. For instance, the Philadelphia Inquirer and Philadelphia Daily News this summer announced a plan to sell Android tablets with their newspaper content built-in—for about half their combined retail prices.

Elsewhere, there’s more participation, collaboration and financial backing from the likes of foundations, subscribers and other readers.

Publicly traded corporations based elsewhere that own local media remain the Tazmanian devils in the room. Some may reorganize under federal bankruptcy laws, but that could worsen staffing levels and the journalism. Some may divest local properties, which in isolation make money, but since they need local revenue to service their global debt, that’s unlikely. Arguably, some owners are hurting the values of their newspaper properties so much that lenders could force them into involuntary bankruptcy, but such court fights are even less likely.

So, as difficult as it may seem, drastic innovation within existing newsrooms, extensive media partnerships, or even start-up efforts at the community level seem less insane than a few years ago.

“What is paramount,” said Downie and Schudson, “is preserving independent, original, credible reporting, whether or not it is popular or profitable, and regardless of the medium in which it appears.” iBi

Bill Knight is a journalist who teaches at Western Illinois University. He’s written books and administered blogs, and he still writes a twice-weekly column for area newspapers and does weekly commentaries for radio.