A newspaper bailout? Maybe they’re not kidding
Many newspapers are in trouble. But that’s not news. Once popular and highly profitable papers have been merging, failing and disappearing for the past 60 years (examples of those gone long ago in New York alone: the Herald Tribune, the Daily Mirror, the Journal-American, the World-Telegram and Sun, all of which except the Mirror were consolidations of earlier independent papers).
Competition among papers and from radio and television took a toll on the business, winnowing down the number of publications, typically to one or two in each major urban market. Now, with the Internet stealing away the audience for news, entertainment and advertising, the industry is in such a steep decline that the current recession may finish off the weakest and cripple even the seemingly robust.
Just recently, the Detroit Free Press and Detroit News announced that they would cease providing daily home delivery. The estimable Seattle Post-Intelligencer was put up for sale with a warning that it may shut down in a couple of months if a buyer doesn’t materialize. And the Grey Lady herself, The New York Times, appears to be in a financial squeeze, forced to start selling advertising on its front page and taking out a mortgage on its headquarters building. In the past couple of years, the Times has also cut the size of the broadsheet on which it is printed, eliminated a great deal of the space previously devoted to business and other specialized news, and cut its headcount. Sharp workforce reductions have also hit the Los Angeles Times and other big city papers.
Meanwhile, smaller dailies are still folding left and right, which is what was about to happen to two Connecticut papers until a buyer came forward a few days ago. Before that, a Connecticut lawmaker, apparently caught up in the current bailout fever, actually proposedÂ that the state prop up the papers because “the media is [sic] a vitally important part of America.”
I’m sure that’s how the Politburo thought about the importance of Pravda, too. What’s sort of scary about this is that it stirred something of a “debate” about the wisdom of bailing out newspapers, instead of prompting laughter and derision. When push comes to shove, however, newspaper publishers are as likely to want government favors, even bailouts, as any other businesses. In fact, many newspapers and magazines prospered for a century or more because of favorable postal rates.
The harsh reality facing the industry is that you can read the entire content of The New York Times and other publications online for free, while the printed paper costs $1.50 at the newsstand. You can also find everything you used to look for in lucrative classified ads online. And you can look up the weather forecast or check stock prices or the sports news online. Increasingly, advertisers are looking to the Internet instead of print for audiences. Each year, the number of younger people who rely mostly or entirely on the Internet grows and the number of older people tied by habit to the print publication shrinks. Throw in a prolonged recession, and no paper is a sure thing to survive.
I will probably keep buying the printed Times as long as they publish it. It’s a habit; I like to read it, whenever and wherever I feel like reading it, without being tied to a desk, lugging a laptop around, or squinting at the screen on a tiny hand-held device. But it’s clear that the future lies online.
Within a few more years, any publication that has not migrated its content and its ability to generate revenue to the Internet will die. It’s that simple, but it’s not going to be easy to get the revenue. Faced with financial failure, publishers and their friends in government may well look for ways to get public support. Cash handouts won’t look good, so the likely approach will be to secure less in-your-face subsidies, such as loans, favorable tax treatment or even “public service advertising.” After we’ve dished out a trillion dollars to banks, auto companies and whomever else, it may be hard to reject the argument that the local hometown newspaper is any less worthy of some taxpayer moolah.
(Visit me at The Purple Center)