Andy Serwer, Fortune magazine’s
managing editor, explains the economic crisis, Apple’s iron grip on
news subscriptions and why journalism needs a saviour.

Warren Buffett used to boast two facts: Newspapers will always be around and the whole world will drink Coca Cola. Now, with the onslaught of vitamin-enhanced, diet-friendly, fruit-enriched sugar waters, at least one of those facts is no longer true.

“Our business is not being destroyed, it’s being recreated,” said Andy Serwer, managing editor of Fortune magazine. “There’s never been more demand for news — and especially business news — than there is today.” The world is in the midst of a complicated economic recession that journalists are expected to navigate and make sense of. The financial tipping point was June 2007, when “Bear Stearns’ hedge fund first blew up.” Then followed a series of unfortunate events — the collapse of Wall Street hedge funds, structured finance and the housing market, to name a few — that led the world into an all-reaching recession that will affect us for a long time. This economic crisis is typical in some ways, Serwer said, “There was too much leverage and complicated financial products and lots of villains,” but it’s atypical in that this meltdown “came from the financial system and made the economy tank. Normally it’s the other way around. Last time that happened, it was the Great Depression. And that’s scary.”

It’s so complicated an environment that even experienced business owners cannot explain it: Serwer said that several high-level brains, including the CEO of JP Morgan, have looked him in the eye and told him they don’t understand what structured finance is. What’s a regular consumer to do, if not rely on journalists to decipher what it means to them?

Serwer was in Toronto on Oct. 18 to speak to a room full of financial journalists at an event hosted by The Society of American Business Editors and Writers (SABEW). The organization boasts 3,000 members, including reporters and editors working for institutions like Bloomberg and Reuters. Freelance financial journalists are also a growing portion of membership, the product of shrinking newsrooms. The event marked SABEW’s entry into Canadian programming as it tries to expand beyond the U.S.

Serwer rose in the Fortune ranks after starting as a lowly intern in 1985. He worked as a reporter and, since 2006, the managing editor responsible for directing the multimedia bi-weekly magazine and all its online entities (he also contributes to a variety of broadcast programs and produces a weekly market roundup video on CNNMoney.com, Fortune’s online home). While he is technically in charge of the site’s editorial, Fortune also has an online editor, which raises issues that are increasingly common in newsrooms. “Now, when we get a great story, the first hurdle is where does it go, in the mag or online?”

His speech was more of a conversation: he riffed on The Social Network (“I’ve met [Facebook CEO Mark] Zuckerberg, he’s not like how they portray him at all. The problem with a fictional account is you have no idea what’s real and what’s made up. That pisses me off. But maybe it’s because I have a non-fiction bias.”) And he’s not too fond of PR people, who he says are “more aggressive and difficult and demanding than ever. They try to say ‘this is how you’re doing the story.’ It’s rare and refreshing when people actually talk candidly on the record.”

Serwer thinks there is money to be made online, but you have to provide something people can’t get elsewhere. Consumer Reports is 100% paid, and it works, he says, because the information is valuable and only found in one place. By using the internet without harnessing its profitability, journalists have “helped Google grow an entire business out of our intellectual property,” Serwer says. Information doesn’t want to be free — information can’t want anything. Google has made millions off “free” information: the articles journalists produce.

What journalism needs is its own Steve Jobs — an innovative mind that can figure out how to make money in a struggling industry. Serwer thinks Jobs is a “once-in-a-century” innovator, today’s Thomas Edison. What people are saying today about newspapers — that death is imminent — is what people used to say about the music industry, until Jobs found a way to make it profitable again…at least for himself, Serwer says. Now, Fortune and other magazines are fighting with Apple to allow subscriptions through iPads: right now, you have to pay for each issue individually. “What magazine or newspaper subscriber has to pay for each issue?” Fortune wants the autonomy to charge for subscriptions, but Apple is reluctant to hand over purchasing power.

Serwer’s advice for journalists in the digital age?  Build a brand, work for a start-up, be the “baddest-ass investigative journalist” you can be, work for the New York Times and help that paper figure out what the next business model will be (think beyond the paywall). In other words: don’t be victims of the change washing over print journalism. “We’d all work for Goldman Sachs if there wasn’t something in us telling us to do this job,” he says. “It’s definitely not the money. I just love the life.”