Case Study

What Does the Future Hold for Newspapers?

If you’ve been following the newspaper industry at all over the past few year or so, you probably won’t be surprised to learn that 2009 was the worst year in decades as far as advertising revenues are concerned. But the sheer scale of the declines over the past few years is staggering. Last year saw a drop of 28 percent from 2008 –- and that year was already the worst for the industry since the Depression. Over the past four years, print advertising revenue has plummeted by more than 47 percent, to $24 billion from $47 billion. Online advertising has been growing (except for last year, when it shrank by 11 percent), but it still amounts to just 10 percent of what papers make from print. If you’re interested, the full numbers in all their gloom are available here.

According to the New York Times, the last time advertisers spent such a small amount on newspaper ads was in 1986. But Ryan Chittum at the Columbia Journalism Review notes that if you use inflation-adjusted dollars, the last time newspapers took in less in ad revenue was actually even further back — around the time John F. Kennedy died. Depressed yet? The head of the Newspaper Association of America, John Sturm, came out with this ray of sunshine in a response to Martin Langeveld at the Nieman Journalism Lab:

The velocity of the advertising decline for print classifieds continued to moderate, and adverse trends for national advertising and newspaper Web sites lessened considerably as last year came to a close.

While it’s great to hear that the velocity of the decline is moderating (remind me to tell that to someone the next time their parachute fails to open at around 10,000 feet), there are no signs that those figures are rebounding at all — and in fact, former newspaper executive Alan “Newsosaur” Mutter says that things could get even worse. Nor is there any indication that online advertising revenue is going to make up more than a thimbleful of that gap any time soon. If anything, online ad rates have been falling, at least for the kind of broad, mass-market reader that newspaper web sites cater to, because of the vast explosion of inventory from providers such as Demand Media and Associated Content.
So what are newspapers doing about it? Well, the main thing they seem to be doing is putting up walls. The Times of London said it will soon charge users for access to its web sites at the rate of 1 pound ($1.49) for a day and 2 pounds for a week under the mistaken impression that the way to determine the value of something is to put a price on it (the only way, of course, is to find someone willing to buy it). Meanwhile, the Wall Street Journal is turning to new technologies such as the Apple iPad — but is taking a distinctly old-school approach to the new device, saying it’s planning to charge $17.99 a month for the newspaper on the iPad (this interesting fact appeared at the very bottom of a story in the Journal itself, quoting someone described as “a person familiar with the matter”).
So will this plan help turn the WSJ into a money machine? Possibly, although CJR contributor Ryan Chittum argues that the proposed pricing “doesn’t make sense.” As he explains:

A WSJ.com subscription costs less than half — $8.62 a week. A print subscription delivered to your door costs just $9.92 a month. A print and online subscription costs $11.66 a month. But you’re going to charge $18 for the iPad app?

So if the iPad isn’t going to rescue the traditional media, what does the future hold for newspapers? Although it’s still too early to tell whether it will succeed, a model based on what David Weinberger has called “small pieces, loosely joined” seems to be emerging, with third-party sites such as GlobalPost and Politico and others filling in the gaps left by newspapers. And former Washington Post executive editor Len Downie suggests that non-profits can also help. Or do newspaper companies need to “burn the boats” and focus entirely online, as Marc Andreessen suggested recently? (Note: Please don’t beat me up about how Cortes didn’t *actually* burn the boats — that’s irrelevant for the purposes of the metaphor). Perhaps we should we just wait for Russian billionaires to buy them all.
The reality is that most newspapers simply don’t appreciate how different the online world is when it comes to content. Too many are still laboring under the misapprehension that the Web is just like print, except without all the tree-killing — you put your content on there just like it was in the paper version (except maybe you add a link or two, or a video clip) and readers line up to read it, and you go home. There are a few exceptions, of course, such as The Guardian — but even it has been struggling for profitability, weighed down by its legacy print operations. Too few mainstream media outlets realize that despite their similarities, the world of digital content is completely different from the world of print publishing, and needs to be thought of and treated differently. And walls don’t help.

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About Zoran Opalic

Professional in design and publishing industry. Conceptualize and orchestrate designs and redesigns that effectively reinforce and build brand images. Proven ability to drive record-high campaign in increasing publication sales and execute successful product launches...

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