Are quality newspapers disappearing – and if they are, does it matter?
It is a disturbing prospect, but prognosis may not be as bad as it seems.
Will newspapers of record, as we know them today, disappear?
According to a recent report, US newspaper revenue has dropped 17.7 percent in the last 12 months. In Britain the drop has been 12 percent. Much classified advertising – jobs, real estate and goods for sale – has migrated to the web. While Google has become wealthy from clever exploitation of web advertising, pickings for most newspapers' web sites are lean compared with what print used to offer them.
The current financial crisis has not helped at all. While advertising revenue for the main Australian newspaper publishers has recently held steady, dropping less than one percent in the last year, one analyst is tipping a further drop of nearly 13 percent in the current year. Even so, the “rivers of gold”, classified advertising revenue from Fairfax newspapers,The Age and The Sydney Morning Herald, that the late Kerry Packer used to covet are, at best today, rivers of bronze.
Conditions in the US are dire.
Since last December, five major newspaper companies have filed for Chapter 11 bankruptcy protection. The best known internationally is the Tribune Co, whose flagship publications are The Los Angeles Times and The Chicago Tribune. The company was bought and privatised by billionaire property developer Sam Zell in 2007 when the economy was awash with money.
Zell may have done well at property development but he has been unable to turn around the newspapers. He sacked highly regarded LA Times editor Dean Baquet after Baqet refused to make the size of job cuts to the news room that Zell wanted. (Baquet is now Washington bureau chief for The New York Times.)
Speaking of the Times (reknown for its traditional motto, ALL THE NEWS THAT'S FIT TO PRINT, which still appears on its masthead though the days are long gone when that's achievable), it's in trouble too. While less subject to shareholder pressure than others, due the the controlling interest of the Ochs-Sulzberger family, it recently sold part of its new headquarters building for $225 million in a leaseback deal. Earlier this year Mexican billionaire Carlos Slim Helú invested a $250 million injection.
A company with other sources of revenue may continue to publish a quality newspaper if it sees the publication as part of its public persona, even if the paper is losing money. News Corporation owns The Times and The Sunday Times in London, The Wall Street Journal in New York and national Australian newspaper, The Australian, all well regarded for their news coverage, even if the latter two have some idiosyncratic opinion columnists. Rupert Murdoch, chairman of News, has great fondness for newspapers and supported The Australian for a number of years before it ever turned a profit, but most of the company's revenue comes from its television, films, book publishing and notorious tabloid newspapers. Murdoch can therefore afford to take a long term view.
Perhaps though he doesn't like what he sees. The WSJ newsroom lost another 20 journalists in February on top of 50 last year. According to one projection, total US news workforce will shrink by the end of 2009 to 20 percent fewer people than were employed in 2001, a loss of more than 10,000 jobs.
The trend is grim, but not so grim as to believe the April 1 report that Ariana Huffington's The Huffington Post has bought a majority stake in The New York Times and, as from Friday next, the Times will be appearing as a web-only publication. (Although The Christian Science Monitor, also a highly regarded publication, recently became a web-only pablication apart from a print edition on Saturdays. It has long been subsidised by its associated Church, but size of subsidy reached a limit.)
What do we lose as news services of record shrink, lose their international coverage and perhaps finally disappear altogether?
The answer is a very great deal indeed, although with the reach that the web provides, not as much as we would have lost a decade or more ago. Even so it is a disturbing prospect.
But prognosis may not be as bad as it seems and in my next post, I'll discuss some encouraging possibilities.
