Who is to blame for the decline of newspapers
October 9, 2008 by grzegorz.piechota
”Is journalism the reason that people are buying fewer newspapers? And, by implication, are journalists therefore to blame for the crisis facing the press?”
Roy Greenslade, a blogger for the Guardian (UK), answers to both questions: no.
”There cannot be any doubt that journalists themselves – the reporters, sub-editors, photographers, feature writers, columnists, page designers – cannot be held responsible for either the financial woes of the industry nor for the public turning its back on the “products” that contain their work…
The truth is that we are being assailed by revolutionary technological forces completely outside of our control. To make it worse, the wider global financial crisis means that we are caught up in something of a perfect storm. It is wrecking the business models of newspapers and overturning all the old certainties.
We journalists are not paying the price for our own (alleged) failures. Whether your are an enthusiastic supporter of the digital age as it heralds the replacement of top-down journalism with bottom-up journalism, or whether you remain a stubborn believer in the virtues of journalists as information gatekeepers, you are not the cause of the current calamity.”
Greenslade’s plea was triggered by Paul Farhi, a Washington Post reporter, who wrote in the American Journalism Review: ”Don’t Blame the Journalism”.
In his analysis on ”the economic and technological forces behind the collapse of newspapers”, Farhi wrote:
”Newspapers are in trouble for reasons that have almost nothing to do with newspaper journalism, and everything to do with the newspaper business…
For decades, newspapers enjoyed what economists call a “scarcity” advantage. In most cities, there was only one outfit that could profitably collect, print and distribute the day’s news, and it could raise prices even as it delivered fewer readers each year. Indeed, monopoly daily newspapers enjoyed enormous profit margins – sometimes as much as 25 percent or more – until very recently. But the scarcity advantage has faded; the Internet has essentially handed a free printing press and a distribution network to anyone with a computer.
The real revelation of the Internet is not what it has done to newspaper readership – it has in fact expanded it – but how it has sapped newspapers’ economic lifeblood. The most serious erosion has occurred in classified advertising, which once made up more than 40 percent of a newspaper’s revenues and more than half its profits. Classified advertisers didn’t desert newspapers because they disliked our political coverage or our sports sections, but because they had alternatives…
Similarly, the disappearance of local chain stores over the past two decades has fallen like a series of hammer blows on newspapers…
Newspapers that were hoping to be rescued by their online ad businesses woke up to a sobering reality in mid-2007. By then, it was becoming clear that online advertising wasn’t growing fast enough to make up for the rapid disappearance of print ads. In fact, at the moment, online ads aren’t growing at all. Sales at newspaper Web sites fell 2.4 percent in the second quarter of 2008. This may be as ominous a development as the meltdown of print. Online newspaper revenues had grown smartly in every quarter since the Newspaper Association of America began tracking them in 2003. No longer.
There’s still much that many newspapers can do to improve their Web sites: adding Twitter feeds, social networking applications, Google map mashups (maps over-laid with data), on-demand mobile information and, of course, more video. All good. But let’s not kid ourselves. The online business model is still uncertain, at best. An online visitor isn’t as valuable to advertisers as a print customer. Online readers tend to dart in and out, spending far less time on a newspaper site than a subscriber spends with a paper. And a portion of the traffic (how much depends on the paper) comes from outside the paper’s circulation area, making these visitors irrelevant to local advertisers. I’m not really surprised that newspapers haven’t figured out how to make the Web pay for all the things that print traditionally has.
Tagged: advertising, business model, Case studies, internet, newspaper
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