Wednesday, February 25, 2009
American Newspapers: Do They Have A Future?
What does the landscape of journalism look like today—or more specifically, the world of newspaper journalism?
In one of the most famous quotes about newspapers, Thomas Jefferson once said: “…were it left to me to decide whether we should have a government without newspapers or newspapers without a government, I should not hesitate to prefer the latter.”
Today we are dangerously close to having a government without newspapers. At least that is what some people believe.
Think about it: The Tribune Company (my old employer for 25 years) which operates The Chicago Tribune, the L.A. Times, the Baltimore Sun and five other daily papers, has filed for bankruptcy protection.
Average profit margins at the Washington Post in the past five years have been 25% less than what they had been in the previous 15 years. At the New York Times, the decline was 50%.
Last week brought more news of impending doom. The Minneapolis Star-Tribune filed for bankruptcy protection, the Hearst Corporation announced it would close the 146-year-old Seattle Post-Intelligencer unless a very unlikely buyer is found, and a few weeks earlier, E.W. Scripps made the same announcement about the Rocky Mountain News.
Newspapers from coast to coast are struggling to refinance debt, issue equity and dispose of nonessential assets—all short term solutions to a long term problem.
Most major newspapers have trimmed their staffs resulting in the loss of some 20,000 jobs last year and the number of American correspondents reporting from abroad (something I did for 17 years at the Chicago Tribune), fell by 25% between 2002 to 2006 and only a handful of newspapers operate foreign bureaus.
Incredibly, the Tribune Company has even entered discussions aimed at “outsourcing” its foreign coverage at all of its papers.
A recent story in Time Magazine offered up the following dire analysis of the media landscape:
“During the past few months the crisis in journalism has reached meltdown proportions. It is now possible to contemplate a time when some major cities will no longer have a newspaper and when magazines and network-news operations will employ no more than a handful of reporters.”
There is, however, a striking and somewhat odd fact about this crisis. Newspapers are still the best-staffed news organizations and remain journalism’s brightest hope.
Newspapers have more readers than ever. Their content, as well as that of newsmagazines and other producers of traditional journalism, is more popular than ever — even (in fact, especially) among young people.
The problem is that fewer of these consumers are paying. Instead, news organizations are merrily giving away their news. According to a Pew Research Center study, a tipping point occurred last year: more people in the U.S. got their news online for free than paid for it by buying newspapers and magazines.
Who can blame them? Many old print junkies have stopped subscribing to newspapers, because if they don’t see fit to charge for their content, they feel like fools paying for it.
This is not a business model that makes sense. Perhaps it appeared to when Web advertising was booming. But when Web advertising declined in the fourth quarter of 2008 all that changed.
It has been pointed out that newspapers and magazines traditionally have had three revenue sources: newsstand sales, subscriptions and advertising. The new business model relies only on the last of these. That makes for a wobbly stool even when the one leg is strong. When it weakens — as countless publishers have seen happen as a result of the recession — the stool can't possibly stand.
So, given that rather gloomy picture what are the prospects for the printed newspaper we all have come to know and love? Is it doomed to go the way of hot type, telex machines and green eye shades? Are newspaper newsrooms as we have known them on the verge of extinction?
Most industry observers tend to agree on what is killing US newspapers. Print advertising revenue is steadily declining and circulation is falling as readers go online to get news for free. Online advertising revenue has been rising but is not keeping pace with the drop in print advertising revenue.
What they do not agree on is the solution.
(NEXT TIME: WHAT ARE THE SOLUTIONS?)