U.S. Newspaper Industry: Next in line for Bailout?

The print media, newspapers in particular, appears to be hanging by a thread all across the United States and some of the big names in the field are contemplating the ‘toll booth’ approach regarding their online websites. The causes of this outcome can be traced back to the decisions made in 1990s to make the websites of most of the newspapers available for free, the event addressed by Alan Mutter, an industry consultant and blogger, as “original sin”.   

One of the main reasons behind the current state of newspapers can be attributed to the prevalence and availability of free content, including news, online, and that too in a form of minute by minute updates. In addition to the Internet, the availability of 24-hour news channels on television and radio also can not be overlooked. Another conceivable cause behind the plummet in the newspaper revenue is the decreasing number of advertisers opting for print media. This trend has primarily been sparked by the availability and popularity of alternatives, provided by internet companies such as Google Inc.

In their attempt to rectify the decreasing readership and diminishing revenue, the newspapers have started hiking the online access prices to their news articles in the hopes that the readers will continue buying the papers. What makes this difficult is the fact that whether or not the newspapers charge for news online, free news is always going to be available on websites like Yahoo, MSN and AOL who pay for the rights to post stories from Associated Press and other sources. In addition, a lot of websites and bloggers provide summarized versions of the recent developments in the world, which is sufficient for a lot of readers.  

Some publishers also argue that by charging for the news online, they will generate revenue which will facilitate them to continue with supplying newspapers. This contention overlooks certain risks. A recent study by the Newspaper Association of America rejects the scope of deriving any benefits from the online newspaper fees. Instead, it proposes that such tactics will probably just drive away the majority of the Internet readers. The study further concludes that typically the newspapers with circulations of about 50,000 will not be able to earn much more than $1-million in annual revenue from online subscriptions. Since the advertiser influx to online websites is directly proportional to the online readership, only a few publishers can benefit from such a strategy of erecting a ‘toll booth’.  

An alternative to this approach is the practise of specialization and unique journalism. The Wall Street Journal is one success story of online subscriptions primarily because of its special practices and focuses. With a total circulation of nearly 2.1 million, it currently has about 383,000 online-only subscribers. In order to maintain such an online following, it focuses on financial news. The benefit is that the targeted niche has the resources as well the interest to retrieve insightful information about the business front. Another trend in response to the sagging state of newspaper industry includes the creation of such start-ups as Journalism Online that act as a database of news from different newspapers, delivering services in exchange for a monthly subscription.

While there looms uncertainty regarding the future of this age old medium of journalism, it is nevertheless fair to assume that there are still patrons of newspapers who look forward to holding the paper in their hands every morning, who like clipping articles from the papers for their record, or who just prefer reading information in a print medium rather than surfing and reading news online. A few newspaper executives have also collaborated to launch a website called NewspaperProject.org which provides a platform “to support a constructive exchange of information and ideas about the future of newspapers.” No matter what the solution, it is evident that newspapers all across the United States are fighting back to ensure that they escape extinction. While some might favour the shift to online media on the grounds that the information is readily and inexpensively available, and no longer involves the handling of bulky and costly newspapers, I would personally hate to live in a world where newspapers can only be witnessed in old movies or in museums.

  1. Indeed, the death of newsprint is a sad thought, but it’s most likely a realistic future. Just as vinyl discs, 8 tracks, VHS, and soon to be CDs have all gone the way of the Dodo (and perhaps that expression as well). It’s unfortunate, but our society seems to have made time move faster than it used to. It has become a luxury for many to have the time to sit at the morning table with a fresh brew of coffee, flipping through the pages and meandering from article to article.

    As you’ve mentioned, there are still those who prefer to be able to take the time to properly digest the news over the breakfast meal (I certainly do); but mass appeal economics dictates obsolescence, and minute-by-minute updates and online blog summaries have made internet news all too efficient and appealing for the future generation.

    Unlike the music/entertainment industries unrelenting focus on CD and DVD sales, the news industry should learn from their devastating losses and continue to focus their efforts on developing effective online business models or risk getting left in the dust of their less nostalgic competitors.

  2. I am not sure the comparison between VHS and DVDs is quite the same as newspapers. People cannot access the internet everywhere (such as on the subway or when a person goes on a plane), therefore there is a clear market for newspapers. With VHS and DVDs, that is just an improvement in technology that requires a different player. They still play movies on TVs and have the same convenience factors.

Comments are closed.