From Editor and Publisher yesterday:
The American Press Institute (API) will host an invitation-only, closed-door “summit conference” Nov. 13 in which 50 CEO-level executives will ponder ways to revive the newspaper business.
The one-day conference at API’s Reston, Va., headquarters will be “a facilitated discussion of concrete steps the industry can take to reverse its declines in revenue, profit and shareholder value.”
And here’s Robert MacMillan of Reuters writing about the closed door policy at the crisis summit in a post today:
Many sources whom we deal with in the media world — particularly reporters, editors and other members of the editorial staff — find it funny that the industry they’re in (finding and reporting information, truthsquadding the government, holding the powerful accountable, etc. etc.) relies on publishers and other executives who are among the most press-averse people in the business world. Some executives talk. But many others hide, and only come out once a quarter to share some more bad news.
Maybe reporters should try publishing false accounts of their owners’ educational backgrounds, that might shake things up a bit. We’ll call it the Heffter-Pickler Reporting Method.
Telling the truth once in a while would help.
Buggy whip, meet car.
If they are panicked enough, they may decide in unison to begin charging for online content.
The printing press was a wonderful invention, but expensive and out of the reach of most. Sure, it could mass-produce Bibles, books, pamplets, advertising, political treatises, etc. at a tiny fraction of the cost of having monks hand copy materials. But most of the time the presses stood empty. Owners had to find a way of using that “down time” to make use of a rather expensive piece of equipment. Paper was also expensive during the late middle-ages, rennaisance, and even into the colonial era, but it was comparitivly cheaper than having presses and trained press-apprentices sit idle.
So printers tried to find ways to use their presses for profit during times when they weren’t hired for a specific printing job. Newspapers fit that need. The printer would correspond with those in other towns, collecting news from whatever source he could find it, and print it in his paper (hence the term “correspondent” in referring to a journalist). The news was just the tease, what was really being published was smaller advertisements placed by merchants. This allowed small merchants to advertise by paying a fraction of the cost of a hired print job. Some newspapers were passed out for free, but to prevent people from just picking up the paper so they could use it in their privys, the printers started charging a modest shilling or so per copy – just enough to pay for the copy of the paper.
As time progressed, the cost of a small print-press declined, but the newspaper business expanded to the point where it involved huge presses printing thousands of copies of a newspaper edition which changed several times a day, and a distribution network which pretty much covered an entire city. Newcomers to the business were discouraged from entering the market due to the incredibly high market-entry costs of re-creating such a system.
In it’s heyday, the system existed due to poorly-paid labor. The skilled print operators unionized early. But the distribution network consisted of “newsboys” who were considered “independent contractors”, who’s pay was based on the number of copies sold. Usually, it worked out to a few pennies an hour, if the newsboy worked exceptionally hard – certainly not enough to raise a family.
By the late 1960’s and into the 1970’s, minimum wage legislation and enforcement of “employer/employee” laws increased the cost of distribution. Also, the sprawling suburbs multiplied the area which the distribution network had to cover, and by the mid 1970’s the higher gas prices made distribution even less cost-efficient. In light of newspaper closings around the country, legislation as enacted allowing newspapers to avoid the anti-trust laws by combining costs in a “joint-operating agreement”, such as that currently used by the Seattle Times and P.I.
But in the 1980’s and 1990’s, the distribution of newspapers encountered still more problems. The cost of paper went up. Ad revenues stayed rather stagnant as the country lurched from one economic downturn to another, and the wages of most consumers (including newspaper readers) remained frozen at the 1970 level, after accounting for inlation. Oil prices continued to rise (in the long term), and the lack of mass transit systems or other transportation infrastructure improvements during that period meant long commute times, which ultimately rendered the delivery of the afternoon paper impractical.
To save costs, newpapers kept shaving costs by discarding staff. Wire stories became the staple, which often consisted merely of reprinting a press release issued by some candidate, organization, or business interest. Reporters seldom had time to actually investigate and report on news because their simply wasn’t enough time to do so. Newspapers needed reporters sitting at a desk writing copy on their computers, five or six stories an hour. Such a schedule didn’t leave time to do anything but to simply repeat allegations and denials, and certainly not enough time to spend days or weeks digging out the truth behind a story.
It was at this crucial time that the computers made their impact. At first it just hit the small-value peripheral printing businss, and businesses learned that they could use their computers to print menus, brochures, posters, business cards, etc.
But with the internet, the “paper barrier” vanished. Readers could get the information they needed directly from the internet without bothering to ever put it on paper. No newspaper to be printed, folded, placed on trucks, then distributed. The cost of entering the marketplace of ideas and news was now the cost of a personal computer and an internet connection, the price of both of which was continuing to fall. Classified advertising went on the internet, and eventually ads were being placed directly by the merchants and their ad agencies on interent sites. The money wasn’t flowing to the newpapers any more, it was flowing to those who provided good, original content on the internet.
So what can these publishers do? Well, they have to recognize that their printing presses, their fleets of trucks, and their other acouterments are well on their way to being obsolete equipment in the digital age. They can focus on hiring more reporters to give original content and sell advertising on their web pages, which is where the future lies.
I give it five more years, ten at the outside, before we don’t have a major daily newspaper in Seattle.
Labor Goon @ 3: They tried charging for online content, it didn’t work. Nobody paid. I noticed that a few years ago as newpapers started to establish an online presence, a number of “dinosaur” publishers tried to restrict access to subscribers or sell access to articles on a per-piece basis. They were afriad that if they offered it for free, why would somebody pay? All a valid concern, but given that the consumer can already get essentially the same content free from somewhere else, restricting it to paying customers didn’t bring in any more money. All they did was strangle the value of their online version, and thereby reduce the value of their online ad revenue.
They could accomplish the same thing by increasing their per-copy price to $10.00 – sure, they would get more mony per sale, but their total sales would drop to almost nothing. Kind of like the guy trying to sell pencils on the street for a thousand bucks “sure, nobody seems to be buying today, but all I have to do is sell ONE!”.
By the way, I read several papers online every day. But I’ve noticed that except for some purely local news, it’s almost all AP wire copy – you could pick up a different newspaper anywhere in the country and you would read the same thing.
Do we get to talk about Obama Derangement Syndrome yet?
What unique value-added service do newspapers provide? The question answers itself.
Just watch. They’ll come out and, citing First Amendment concerns, ask for a tax subsidy. That’s what ‘free marketeers’ always do.
@7: Hey, they’ve already claimed that Obama is the illegitimate son of Malcolm X. Talk away!
People want news not slanted opinion masquerding as news. Hence people are forgoing reading opinionated garbage!
Puddy @ 10: And yet, Fox News continues to get viewers…..
@10 Luckily for the GOP, some people can’t tell the difference between news and opinionated garbage. However, the GOP’s luck appears to be running out. That kind, anyway.
to @4
really interesting analysis!! thanks mucho.
I wonder about the impact of reporting by the rich, for the rich, of the rich.
while our lazy ass fellow, gag,
‘citizens’ are way too lazy about everything important, like community engagement and NOT listening to liars, I also believe that people KNOW that most of what is in the paper is a bunch of lies meant to keep them as sheep – even as they stay sheep.
has the internet shown that there is a market for more than People magazine disguised as the New York Times?
… an enquiring mind.
rmm.
rhp6033: The thread is newspapers. Did you drink Steve’s Stupid Solution?
One thing that always comes up when I write about the business I cover — my own — is the assessment that newspapers are in the fix they’re in because they publish arrogant, opinionated editorial garbage that conveniently is always opposes the views of the person making the assertion. I reject this as a reason for newspapers being in a bad state. It has far more to do with the advertising situation. People have hated newspapers for hundreds of years. That isn’t why circulation is falling and isn’t why ad dollars are disappearing. Newspapers’ biggest ad foundation has been classified ads. Where are they now? You know.
A secondary note on arrogance. There is a perception among people who encounter reporters regularly that they are aloof, divorced, and therefore arrogant as well. That may happen, but remember, there are thousands of reporters and they’re not all the same. I wouldn’t confuse these things with the business reasons at the heart of newspapers’ decline. The rebuttal to this is that ads follow readers. Sure, but that breaks down in this instance. Circulation hasn’t fallen nearly as heavily as ad revenue. Again, see what I said about classifieds.
And thanks for linking to our blog!
Robert MacMillan
correspondent, Reuters News