Newspapers Face Bleak Future — Even if They Stop Playing Chicken

The contrarian in me wants to believe that people are over-pessimistic about the prospects for newspaper, and so I’m feeling more and more like advertising remains underrated as a savior for high-traffic news sites. Nevertheless, judging by my own reading behavior, I very rarely buy papers, and while I pay for two — the FT and the WSJ — I can’t imagine paying for any more.
The Washington Post has a nice piece on the subject, arguing that papers are seeing readership decline faster than expected, while even the top papers playing chicken with one another over online subscription fees:

…daily circulation across the industry has declined every year since 1987; Sunday editions, since 1990. The Washington Post, for instance, has watched its average daily circulation drop from 779,898 to 709,500 in the past five years.
….
Circulation loss in itself is not debilitating from a revenue standpoint. In general, paid circulation accounts for about 20 percent of a paper’s revenue, with the rest coming from advertising. But ad rates are set by circulation figures: As circulation drops, so too will the amount papers can charge advertisers.
The result can be a vicious cycle. As advertising declines, newsrooms find it more difficult to afford overseas bureaus, extensive national operations and other editorial additions that help produce an authoritative daily report. As they cut back, they risk sending readers elsewhere for news, leading to further circulation declines and lower ad rates.

Even the big papers with widely-viewed online sites aren’t sure what do, as the piece rightly points out. After all, having so many readers outside their region limits the likelihood that people will pay for the privilege of viewing the site:

General-interest papers such as The [Washington] Post and the New York Times are playing a sort of game of chicken with each other: None wants to be the first to charge to use the Web site, fearing that users will refuse and simply migrate to a competitor whose site still is free. Papers, however, have begun using their Web sites to provide Internet-only content that gives in-depth information on everything from football to politics beyond what is available in the newspaper. In future scenarios, such content may require a paid subscription. A potential model is ESPN’s Web site, which includes a great deal of free content but charges $6.95 a month for its premium “Insider” reports. In the online news industry, this is called moving content “behind the wall.”
Caroline H. Little, publisher of Washingtonpost.com, said the site has considered charging for premium content, but she is worried by examples she has seen elsewhere in the industry. The New York Times recently hinted it may start charging for some of its Internet content.
“So, not to say that it’s not a possibility in the future, but our first priority is growing our audience, and this would clearly hinder that,” Little wrote in an e-mail. About 80 percent of washingtonpost.com users live outside the Washington area, the site’s research shows.

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Comments

  1. David Bennett says:

    It’s hard for me to decide if newspapers will be flexible enough to survive, but here are a few things they might consider.
    - Form a collective where one subscription gets access to lots and lots of papers. It could be higher than with some current rates, the thing is that the sum totals add up even if everyone is reading dozens. This is true of products in general. Or individual papers can charge very low rates, gathering mass.
    - If they are going to offer public sections (which I want and they may have no choice) avoid these registration schemes. If I come across a link and it’s some obscure paper I rarely take time to register. If they want the readers and the potential advertising dollar make it easy.
    - Sell material in archives (and other sevices) at reasonable prices. I believe that in general the net needs a “nickel and dime system,” something like pay pal except in really trivial amounts. It doesn’t need really heavy security because deposits can be low and payout limited, but I would like a system to be able to rapidly buy access to a one time listen to a song or to give someone a pittance for a good article.
    - Add comment capacities (with threaded and linkable comments as in the scoop engine) to every article. Maybe 2 comments, one edited, the other the unwashed masses (registration can be used here to hit spam) along with some links to related articles though a lot of that can be done in the commenting itself. Building communities is one of the big things for building success and there is a lot of potential in context based advertising.
    - Build services. Again if one unites a bunch of publications into a shared resource then searches of them can give a high quality set of data. There may be problems with headlines, but on more esoteric issues the things are there without the clutter.
    Basically one way or another some newspapers are going to survive. But new breeds are forming. For every want to be publisher with a few tens of thousands and time, every community over ten thousand people is an oportunity. Collect the PTA minutes, review the local business, start the forums, build a little niche which niches for everyone from the girl scouts to the local crime watch officer to the gadfly who goes to every council meeting, you have the classic small town paper. We’ve got a medium where the local grade schoolers can go out and interview Mrs. Oreilly on how to make cookies and get some of her best recipes.
    Then you have things like craigslist running like berserkers through that old classified advertising.
    There are so many people in this thing for entusiasm and fun and what worries me about the mainstream press is that a lot of it doesn’t seem to grasp what on it’s desk. For example “bloggers” are associated only with a relatively small set that makes lots of noise and debunks certain stories. Yet the bigger news is tens of thousands, probably hundreds of thousands of informed people, often players in their fields who provide information that you simply couldn’t get or as availible only in small, often expensive newsletters. It’s individuals who read a diversity of these on a a general suibject collecting the ones they think important, providing an overview with conflicting approaches that for a while was nearly impossible to get in our specializing society.
    It’s a hundred or so people blogging from Iraq each giving little bits of a story, many eager to be interviewed which means that in the future if someone bothers they can repeat a lot of the basics of reporting anywhere in the world from the comfort of their own home. Sure these “stringers” have not been vetted, but my first glimpse is that with care they can provide stuff that a smart journalist would drool for, at least as far as background goes and it’s availible to anybody.
    So there are threats and radically new forms. Increasingly we’re not going to want just the final story, but the notes, the figures and even the step by step formation, the possible developments edited out etc.. The new media supports it to a degree already, it’s tools will get better. Like academia, traditional journalists can avoid this as will as the online review process; but if so then somebody else will start cutting into that territory.
    At least some traditional publications will survive. They have a huge base of resources and provide services that it will take a while for emerging competitors to provide, but the question is whether they will be reactive or leaders. There is going to be a shakeup and a lot of strategic advantages will be squandered.

  2. b7j0c says:

    Newspapers consider themselves media firms but in fact they are manufacturing and distribution firms. If anyone believes that traditional papers have a stranglehold on quality content, I say “Jason Blair” or “Dan Rather” (equating networks with newspapers in that sense). The internet has made the local paper utterly obsolete. Most already have moved to commentary and investigative stories -tv and internet news have made the “breaking story” part of their business irrelevant. Bloggers are killing the rest. The classified business was killed years ago by Craigslist, Ebay, etc etc etc.