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The report of newspaper industry's death is greatly exaggerated

Thursday, May 21, 2009 | 4:11 p.m. CDT; updated 8:20 p.m. CDT, Thursday, May 21, 2009

The news about newspapers lately has been even more depressing than most of the news in newspapers. To read the coverage the papers have been giving to their own industry, you’d think it was on the verge of collapse.

The disappearance of a couple of big-city dailies has been written about as though they were the first dinosaurs to die, with the rest of the herd likely to follow before long. Some of the critics have been gleeful. Journalists themselves have been, for the most part, mournful. Normal people – including, I suspect, at least some of you – have been left confused, unsure whether to be concerned and probably puzzled about what, if anything, these developments portend.

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I had the opportunity this week to listen as a little group of scholars and practitioners discussed what we know and what we need to know about the institution that tells us most of what we know about the world. The conversation was organized by the Reynolds Journalism Institute, the new think tank housed here at the School of Journalism.

I came away feeling a little less confused and a little more optimistic.

Newspapers are not dead or even dying. In the depths of the worst economy since the 1930s, most are making money. Many have profit margins in the double digits. Readership, when you include those who read online, is probably higher than ever. Despite the highly publicized deaths of a few, there are about 1,400 daily papers in this country and more than 7,000 others that are published less than daily. The diversity of that group includes, to cite just three you may know, the Centralia Fireside Guard, the Riverfront Times in St. Louis and Dos Mundos, a bilingual paper published in Kansas City.

So why the gloom and doom? This isn’t the auto industry, after all. One reason is that newspapers are applying to themselves the same standard of news judgment they apply to the rest of the world. Things going well aren’t news. Disaster is. So we write about the newspaper, or the airplane, that crashes rather than the thousands that don’t. (It may also be worth noting that television news, which is quick to report the problems of newspapers, is notably reticent about its own.)

It’s also true that newspapers do face real difficulties, some self-created and others beyond their control. At the top of the former list is the staggering amount of debt being carried by some of the most prominent companies, much of it resulting from purchases that must, in retrospect, leave those responsible muttering to themselves, “What was I thinking?”

For example, the McClatchy company borrowed billions to buy most of the former Knight-Ridder chain, including the Kansas City Star. So now profitable papers, including the Star, are slashing staff and content to generate the money to pay the debt-holders. The same is true of the Tribune Company, owner of the Chicago Tribune, which bought the Los Angeles Times and others, and which is now in bankruptcy even though many of its papers are individually profitable.

A couple of super-smart doctoral students demonstrated to the assembled scholars just how self-defeating that slash-and-burn response really is. Using econometric models, they showed that the typical cutting of newsroom staff actually leads to revenue losses as readers walk away from diminished journalism and advertisers follow readers out the door.

Not all the industry problems, however, are of its own making. Many of the most important advertisers – and advertising accounts for 80 percent of newspaper revenue and all of the profit – are cutting back or just disappearing. Auto dealers and department stores are just two examples of that.

And there’s much more competition, not so much in news reporting but in commerce. A lot of the advertising material you get in the mail or hanging on your doorknob used to be in the newspaper. The number of television channels has metastasized.  

Then there’s the Internet, source of largely unfulfilled promise and myriad problems. In print, a local newspaper usually has something pretty close to a monopoly. On the Internet, there’s an almost infinite amount of space for news and advertising as well as competitors from throughout cyberspace.

Newspapers including the Missourian have lots of readers online. But hardly any papers have figured out how to monetize – to use a term I’ve heard a lot this week – those readers. One complication, of course, is the widely shared conviction that the Internet must be free. Another is that many online readers are out of town, making them less attractive to local advertisers.

The known unknown, as Don Rumsfeld might have said had he gone into publishing rather than war, is how much of the current downturn is cyclical and how much represents permanent changes in competition, habits and generations.

We who depend on, and love, newspapers can only hope the researchers find some answers and the owners quit cutting long enough to listen.

 

 

George Kennedy is a former managing editor at the Missourian and professor emeritus at the Missouri School of Journalism.

 


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