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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?)

Monday, February 2, 2009

OUTSOURCING FOREIGN CORRESPONDENCE: SAY IT AIN’T SO, SAM

By Ronald E. Yates


The other day I came across a story that really disturbed me. The headline read: “Newspapers Move to Outsource Foreign Coverage.”

“Outsource foreign coverage?” What does that mean?

As I read further I was horrified to discover that my old employer, the Chicago Tribune, was one of those organizations contemplating this drastic move. And Sam Zell, the paper's owner, was apparently behind this scheme.

I had spent most of my 25 years at the Tribune as a foreign correspondent, covering stories all over Asia and Latin America—from the fall of Saigon in April 1975 to the guerilla wars in El Salvador and Guatemala.

The Tribune had a long tradition of fielding some of the best foreign correspondents in the history of American journalism. There was Floyd Gibbons who lost an eye covering World War I and Stanley Johnston, who was aboard the U.S.S. Lexington when she was sank by Japanese planes and earned the respect of American sailors by helping to save several who had been blown into the water.

There was William Shirer, who covered the birth of Nazi Germany for the Tribune and who later would write the seminal book: “The Rise and Fall of the Third Reich,” and Sigrid Schultz, one of the finest women correspondents to cover World War II.

These were legendary correspondents who served as an inspiration to a young and eager correspondent like me when I was posted to Tokyo for the Tribune in 1974.

I wonder what it must feel like today to be working for a paper whose leadership is on the verge of shutting down its foreign bureaus and eradicating its international news staff?

While I fully understand the traditional business model of the American newspaper is changing almost daily and that the print version of many of these organizations may have a short horizon, it seems incredibly myopic to jettison a critical area of journalism at a time when the American public needs to know as much as possible about the rest of the world—and how it relates to their communities and lives.

If the Tribune and its 7 sister newspapers outsource their coverage to the Washington Post, which is what it is considering, it will lose a critical connection between the local communities the papers serve and the broader global landscape.

While I have the upmost respect for the Washington Post and its international reporting staff, asking it to make complex international stories understandable and relevant to a local audience in Chicago or Naperville is asking a lot.

Maintaining an informed public during tough economic times is difficult and unrewarding work. No doubt it impacts the bottom line significantly because foreign reporting is the most expensive of all reporting.

When I was based in Tokyo in the 1990s it was costing the Tribune about $300,000 per year to keep me there. Today, I suspect that annual outlay is more like $500,000. If you are the publisher and you have 10 bureaus around the world, you are talking about $5 million per annum—and probably more like $15 million by the time you factor in the cost of travel, hotels, food, editorial assistants, translators, technology costs, etc.

In an era of ever-shrinking bottom lines, that is not chump change. Nevertheless, running a newspaper carries with it more responsibility than fattening the bottom line for stockholders.

In the 21st Century when governments and their leaders are already exercising immense power to justify national interests, thoughtful foreign correspondents with insight and expertise will be needed to help promote critical comprehension between disparate populations by finding and delivering more meaningful news between nations.

Often it is the information gathered and provided by foreign correspondents that makes all the difference between a world at war or a world at peace.