Last week, I pointed out that print still accounts for more than 90 percent of newspaper revenues. This week, the third of a three-part series on the future of newspapers.
Buy Stock in Newspapers, Weep For America
In his book “The Vanishing Newspaper” Philip Meyer predicts that 2043 will mark the death of printed newspapers in the United States, “as the last exhausted reader tosses aside the last crumpled edition.”
Not a chance.
Media companies report that their Internet editions are newspapers’ fastest growing sources of revenue. But the Web isn’t why I’m bullish about the industry.
First, there is no Internet–not one that makes money for newsmongers. “Newspapers are growing the amount of revenue they derive from their Web operations,” reports E-Commerce Times, but “that revenue stream is growing too slowly to replace the losses represented by plunging circulation.”
Merrill Lynch estimates that online ads generate seven percent of newspaper income. The firm’s media analysts say it’ll take at least 30 more years before it accounts for half–and that’s assuming current trends continue. They never do.
Second, print is all there is. The pessimists aren’t crazy: A Pew poll finds that only 23 percent of Americans under 30 read a daily newspaper, compared with 60 percent of old codgers. Circulation is down 2.6 percent since 2006, continuing a trend that began in the 1990s. 1.2 million people canceled their subscriptions last year alone! Those are scary numbers. But, Internet evangelist hype aside, print accounts for 93 percent of newspaper revenue over a decade after newspapers committed to online.
“Print is dead,” Sports Illustrated President John Squires told newspaper and magazine execs in 2004. “Get over it” and embrace the Internet, he counseled. But not everyone is ready to abandon a sure thing (albeit one in crisis) for a pipe dream. “It depends on a particular person’s view as to whether the industry is going through a rather difficult transition from which it will emerge stronger, or whether things are really in a long-term decline,” says Rick Edmonds, a newspaper industry analyst at the Poynter Institute.
Smart newspaper publishers understand that Web 2.0 is faith-based. At most, the Internet is a way to promote their print editions. “It’s…possible to get online readers to buy the printed version by trailing stories selectively between online and offline editions,” says Viviane Reding, the European Commissioner for Information, Society and Media.
Third, some types of papers are prospering and growing. I believe that the business of printing news on dead trees will emerge from the current shakeout more profitable than ever. This will be thanks to three emerging trends:
*Big National Newspapers
*More Small Local Papers
*Freebie Dailies
At present, the biggest 50 dailies (“A” papers, in industry jargon) dominate the landscape. Below them is a swath of dailies in midsize cities (Akron, Austin, Albuquerque). Small town, suburban and rural dailies, weeklies and bi-weeklies, whose focus is highly localized (“New Stop Sign Stirs Controversy”)–the “C”s–bring up the rear.
During the 20th century, most newspaper profits were generated by “B” papers. This is the market segment that has been hit hardest by the Web. Free online classifieds has decimated advertising revenues. Neither beast nor fowl, the midsize dailies’ attempt to balance local, national and international coverage pleases no one in an environment where highly customized news consumption is available to readers online–for free. (Publishers were idiots for giving away their content, but that’s another column.) MyYahoo feeds me the latest headlines from Itar-Tass and Agence France-Press every morning; how could the Dayton Daily News, the paper of my childhood, do as well for this half-Frenchman with a Central Asia obsession?
Amid the falling circulation numbers, there are notable exceptions. The three large national papers (The New York Times, Wall Street Journal and USA Today) frequently post circulation gains. Their strategies differ: The Times and Journal offer a must-read experience to those who depend on information for their careers, whereas USA Today is a convenient digest for conventioneers rushing to snag a free croissant at the conference center.
In 20 years, the U.S. newspaper landscape will look more like Europe and Japan. The market will be dominated by two major segments. At the top we’ll find a small cluster, perhaps 10 or 15, of huge national titles–papers such as The New York Times and USA Today will get even bigger. Existing papers (The Washington Post?) will expand; new ones will launch.
At the bottom will be a growing number of tiny weekly and biweeklies whose low overhead make them viable and local focus makes them essential reading. Middle-market dailies in midsize “B” cities–Hartford, Salt Lake City, Daytona Beach, etc.–will vanish or, in most cases, radically contract.
Freebie dailies are luring readers whom the old-school A and B papers have written off. If papers like AMNewYork are short on depth, they’re convenient. These stripped-down mini-USA Todays are designed to be read in under 30 minutes–the length of a typical commute–and tossed. “Our free papers provide young people with something new and different: speedy news and bite-size information, which means they can keep up to speed with a minimum of fuss,” says Steve Auckland, head of the free newspaper division at the publisher of Metro’s London edition.
Stefano Hatfield is the former editor of the New York edition of Metro, a slim free daily given away free to subway riders. “This is a generation who grew up with the World Wide Web,” he says of the papers’ target audience, aged 18 to 35. “It is difficult to persuade young people that news should be something you pay for.” There are Metro editions in Boston and Philadelphia. The Examiner chain has Washington, Baltimore and San Francisco. Chicago has Red Eye. Freebie dailies will spread to cities without integrated mass transit systems as they learn to distribute to shopping centers, corporate parks, college campuses and motorists stuck in traffic.
None of this will improve the quality of journalism. “Ultimately [free dailies] will breed in people the idea that news shouldn’t cost anything, even that news is cheap,” points out media commentator Roy Greenslade. “But in fact, news, done well and properly, requires investment and money. They will no doubt tell us what happened–but news should also tell us how and why things happen. I fear that approach will be lost.”
It will. It’s a trend that began decades ago, when newspapers closed overseas news bureaus and eliminated long-term investigative journalism to cut costs, and started embracing elites rather than exposing them. And it’s terrible for our society, culture and politics. Government and business will face even less accountability than they do today. Democracy will lie in ruins. The print newspaper business, however, will be going gangbusters.
COPYRIGHT 2007 TED RALL
14 Comments.
You are so right about the number of national newspapers here in Japan. In fact, I don't think I've ever seen any local Japanese papers (although I think there's some in Tokyo).
Glad you mentioned free daily papers. I've been following the trend for about a year or so now. Free dailies are more common in Europe, but it started catching on in US around 2003. There are now over 45, most of which are in California and Colorado, and the number is increasing.
Of course, as you said, this won't improve the quality of journalism. It'd be interesting to see how they will turn out few decades from now.
whither Greg Palast?
so Ted when are you going to put out the comic version of "Armed Madhouse", we're still waiting here…
btw, your prognostications on the future of the media resemble a cover story by the Economist from September/October 2006 or 2007. They came to the same conclusions; a dozen large national papers, numerous small town weeklies, and a multitude of free metro dailies. However, they did have one exception, the included the large number of online muckrakers, (i.e drudge report) and democratically addicted investigative professionals like Palast and their citizen reporter follower army.
hey what about PayPal, its an online paysite originally used exclusively for Ebay but now is finding its way to various online commercial sites. Instead of punching in lines of personal info, you just put in your paypal user name and pw Done!, sure its open to identity fraud, but its not like your any safer with most major banks having our personal info on their records prone to theft – I mean you hear about it like every other week.
Hilarious, Ted. You note the economic trends, and claim they cause (and predict more of) a decline in newspaper quality, woe unto us. But perhaps the arrow of causality points the other way? How many fraudsters like Mike Barnicles and Jayson Blairs can each of the major dailies support? How many harpies like Maureen Dowd? Print media has been killing itself just fine, thanks, independent of the foolishness of giving away content.
anonymous said
"Print media has been killing itself just fine, thanks, independent of the foolishness of giving away content."
ted said
"It's a trend that began decades ago, when newspapers closed overseas news bureaus and eliminated long-term investigative journalism to cut costs, and started embracing elites rather than exposing them. And it's terrible for our society, culture and politics. Government and business will face even less accountability than they do today. Democracy will lie in ruins. The print newspaper business, however, will be going gangbusters."
I say:
we give China shit for not letting people have access to information. But who's citizens do you suppose get lied to less?
Hey, I like Maureen Dowd. She's funny!
Sorry Ted, I think you're simplifying things a bit too much here. The alleged storied newspaper past is like the myth of the "good ol' days." What about yellow journalism, Pulitzer, Hearst. Didn't they insight a war with cuba or something.
Regional newspapers aren't going away. All your arguments could made saying democracy is dead because young people don't vote as often as old people. They never have!!!
My guess is the web will turn out to be about as much a threat to newspapers as TV was to radio. In a few years people will get tired of blogs and move onto something else.
How about books? Are they dead too because movies tell stories.
If regional papers die it won't be because of the internet it will be for lack of regulation as is happening with radio.
Incidentally, the European and Japanese examples are a perfect illustration of my point. Was the internet responsible for their situation? No way. The reason is the European and Japanese propensity to allow a single giant corporation to control every single industry in the entire country and then meld them halfway with the government and regulate them in a totally pro-monopoly way. They love that crap. You biggest fear is that our society is headed in that direction but without any of the culture to make it palatable.
Well good morning, Merry Sunshine! How cheerful today! As news increasingly becomes a platform for salesmen, we see the deterioration so evident on TV news – even on so-called public TV news. Polyanna that I am, I like to think that people will get fed up with the use of public property to sell us shit and demand actual researched, documented, and corroborated information. In other words, get mad as hell and say we're not going to take it anymore. We're starting to see some directly user-supported, deeper and broader, video-oriented news sources, mostly by means of the internet.
How does regulation figure into all of this. Real regulation.
John, I don't know. Do you think regular people can still be trusted to solve a problem like this?
I kind of feel like a country is a machine. Every little system needs to be designed and tweaked by engineers, monitored by scientists and administered by technicians. Not idiot masses and salesmen.
any takers?
Angelo –
Maybe you'd prefer yourself to be the chief engineer too?
I'm the polyanna who still wants to give a shot to the sentiments expressed in the Declaration and to the specifications in the Constitution. Or die trying. ("Live free and die young!")
I have a nightmare vision of the phrase "regular people" being folded into the Sly tune "Everyday People" and used in the mass media to sell soon-to-be-ubiquitous-for-us geriatric products.
John, the idea of going "straight to the people" was a typical tactic used by Caesar and other corrupt politicians to get around more reasonable solutions. It is called tyranny of the masses and I am sick of it. Not until education improves (never), will democracy cease to be what it is. And here is what it currently is:
A total sham.