Sunday, May 3rd, 2009

The Future of the American Newspaper

I admit it, I love newspapers. I really enjoy spending time with a cup of coffee and a leisurely read. Whenever I travel, I always try to grab as many newspapers as I can in the town I’m in. That’s one reason I love London – so many to choose from. I’m probably one of the few people buying both The Sun and The Guardian. When I was in Buenos Aires for a couple weeks last year, I would make a 30 minute hike from my hotel every morning to find the one news stand selling the Newspapers Direct edition of the The Guardian. Even today, if I’m in Chicago on Monday, I walk over to Borders State St. and pick up The Observer for $6, because I’d much rather read the actual paper than read online. I subscribe to the New York Observer via mail order.

It’s no secret that newspapers in are a state of crisis in America. While this post might seem a bit OT, newspapers are an essential part of civic identity in most places, and have historically played a key role in city life. So given that, and my love of the newspaper, I feel justified in turning the Urbanoscope on the newspaper industry.

The True Concern

Print newspapers could be out of business almost completely in America in short order. There’s no guarantee, but all the trend lines are heading the wrong direction. The recession has only brought the structural problems into stark relief. Many people feel it is essential to save the newspaper. But I think first we need to ask ourselves what it is that we want to save. We could be talking about, I think, three different things:

  1. The business model of the newspaper (i.e., delivering eyeballs to advertisers)
  2. Journalism as currently conceived
  3. The physically printed paper

I don’t think anybody would be sad to see #1 go. Most of the angst seems to be over the decline of journalism, and secondarily over the decline of print. So I’ll focus my thinking there. But this does highlight the problem in most thinking about the future of the newspaper, since most of it has been around how to continue to attract readers online, without sufficient thought around the business model.

Drivers of Decline

Why is the newspaper business model failing? There are a few reasons:

  • Readership, especially among younger people, has significantly declined. They are more comfortable getting their information online than via print.
  • The economic model of online content distribution and advertising is significantly different than that of print. People tend to expect content online for free (which actually isn’t that different from print truthfully – in fact, many newspapers are free today). And advertising is based more on a “pull model” (e.g., Google search keywords and pay per click) than the traditional “push model” of banner ads and such, making news a poor fit with online economics.
  • Alternative platforms have provided a superior eyeball aggregation platform for selected segments of the advertiser community. Things like general classified ads, personals, dating, cars, etc. have all be effectively taken over by specialty platforms that better match advertisers than consumers. This has really hit the revenue of newspapers.
  • The fragmentation of the great middlebrow American common cultural institutions makes the newspaper an anachronism. The idea that a single monolithic platform like a daily paper will appeal to the entire broad community is as obsolete as the notion that American’s will only watch three networks. We are seeing a trend towards more segmented niches in almost every market, and the traditional newspaper is a very bad fit for this. The stab that the newspaper industry has taken at this, namely the proliferation of local editions segmented by geography, has done some good, but ultimately hasn’t stemmed the slide.
  • The journalists at the daily paper are no longer the arbiters of news. Their gatekeeper function has been destroyed. The idea that the daily paper sets the agenda in the local community is obsolete. Newspapers still can “move the market” with investigative reports, but they are no longer the sole arbiter of what news is “fit to print”. Alternative channels such as blogs and talk radio have had a huge impact, particularly in political coverage. One thing that this has really exposed, frankly, is that journalism has always, despite its pretense of objectivitly, skewed the story. What previously would never have been discovered, is now often exposed by bloggers. The Rathergate story comes to mind, as do few of the “fauxtography” scandals. These sorts of things have incredibly damaged the brand of journalism as devoted to facts not opinion. And the fact is, people seem to want opinion, something that Fox News successfully exploited. Traditional news outlets basicaly responded in kind, by becoming more overtly political themselves. The idea that, especially when it comes to political coverage, that there is anything like a neutral point of view, has basically been exploded.

Frankly, I’d argue that in some respect the quantity of real investigative journalism has gone up in the era of blogs. If you want to know more deeply what’s going on in Indianapolis news, you don’t read about it in the Star, you read about it from people like Gary Welsh, Paul Ogden, Jennifer Wagner, Chris Worden, Abdul Hakim-Shabazz, and Bil Browning. These are all people with agendas to be sure, but fairly transparent ones and you can easily process anything they say through that lens. Interestingly, they are mostly rather colorful personalities as well. Abdul, for example, in addition to being a lawyer, blogger, and radio show host, is also a cigar smoking, black Muslim stand-up comedian.

The challenge with these media, however, is the economic model. Consider my own blog. I’ve targeted a niche and successfully acquired an audience. I’m frequently told how valued the analysis and insight that I provide is. However, economically speaking, the blog has a value of zero since I receive no income from it. (As an aside, one of the most personally disappointing things for me about running this blog is that people have come to perceive me primarily as a writer/journalist. That’s a noble calling to be sure, but while I don’t think I’m a bad writer, I’d like to think that the secret sauce to this blog is not my pretty prose, but compelling content that comes from powerful strategic insights about what makes a city tick).

That might be a sustainable model for some blogs, especially those where the publisher is on some type of personal holy crusade (which seems to be a lot of them), but is probably insufficient to sustain journalism as we know it. Consider the example of Cory Schoutten at the Indianapolis Business Journal. Cory is the kind of guy who will camp out at the county courthouse all day groveling through files to try to make sense of a dispute. Putting aside for a moment whether one agrees with the conclusions in the article, who is going to do the heavy lifting to research investigative pieces like this one without a full time platform to do it from? I’d like to believe this type of research is important. Who will uncover tomorows Hired Truck Scandal when there is no more Chicago Sun-Times? It’s an interesting question.

So let’s make an attempt to take this thing apart and put it back together again and see if we can come up with a sustainable economic model that will continue to support print style journalism in some form, even if it might not be journalism as we know it today.

The Flaw in the Model

Firstly, let’s consider who reads newspapers and why? The traditional business model of the newspaper was eyeballs for advertisers. The customer of the newspaper is the advertiser. The newspaper’s product was being able to aggregate eyeballs and deliver them to the advertiser more effectively than the advertiser could do this itself. Advertisers want to reach potential customers, and to do so they need a platform. The newspaper provided this platform by generating content that people would find valuable enough to read, and provided it to those readers below cost in order to boost the subscriber base.

I think this is important to understand. The newsstand price for a paper is as much an illusion as the fare one pays for transit. That is, it is not paying the full cost of production of the end product – not by a long shot. In fact, many papers such as alternative weeklies or the Red Eye are free.

My hypothesis is that there were large fixed costs involved in publishing a newspaper – printing presses, advertising departments, corporate overhead, distribution, etc. – which led to a strategy of maximizing the number of readers by bundling different types of content that might logically target different markets into a single package – e.g., news, sports, lifestyle, entertainment, business, etc. It wasn’t that economic to create a daily paper focused on a more narrow market. The marginal cost of adding a new section was low compared to the overhead of the paper itself, making this monolithic approach rational.

As I said above, I don’t think this model is sustainable. In effect, the newspaper is like an old school department store – and we all know how well that turned out. The online world is hyper-focused. And the fixed costs/scale economics of that model are very different. Thus the first thing we need to do when looking at how to evolve the newspaper is to question the idea of everything for everybody and do a basic customer segmentation analysis. Who reads the paper? Why do they read it? How many of them are there? What are they willing to pay and how much are advertisers willing to pay to reach them? Armed with this information, you can decide the best markets to target and figure out the right economic model for each.

Possible Models

I believe an essential part of the future news organization will be that it is targeted on specific reader segments, not a conglomerate type model. This means more specialty publishers, possibly with different economic models supporting each. Here are some potential economic models that could be applied to various forms of media:

  • Marketing Model. This is about viewing spending on journalism as a marketing expense for some other activity. Much political discourse is already funded this way. A lot of what is written in the political world is effectively underwritten by wealthy benefactors who are willing to pay to get their preferred political message out. Political parties and others publish stuff all the time. We are seeing any number of organizations see the value in hiring journalists to write for them as a form of marketing. For example, the Indiana Pacers hired Indianapolis Star reporter Conrad Brunner to write for their web site. A lot of blogging can conceivably be justified as a brand building exercise to support other activities.
  • “Red Meat” Model. Sadly, the best way to attract large numbers of eyeballs online seems to be by catering to some specific, generally highly partisan segment of the political community and just pounding the table all day long with the party line. This isn’t a model in and of itself, but it enables sufficiently high traffic to enable advertising to possibly work, as well to enable community supported models. Several of these sites run fund drives to keep themselves in business.
  • Professional/Trade Journal Model. This seems to be viable. Anything where you can possibly justify charging the subscription cost as a business expense would appear to be fairly stable. The Wall Street Journal hasn’t lost subscribers. Most local business weeklies appear to be hanging in there. These types of papers can a) maintain subscribers because of their focus, b) charge a lot of money since someone else is paying, and c) have a higher income reader base that is valuable to advertisers. The Journal and FT both even charge extra for online access to print subscribers – and get away with it. That seems to show they will have some durability, even online.
  • Public Broadcasting Model. This involves creating a non-profit that raises funds from individuals, foundations, and governments to finance some type of journalistic activity. Given that non-profits of various types seem to survive, this seems intuitively plausible. As with the marketing model, however, this implies journalists who are capitve to the funder base.
  • Magazine Model. Magazines seem not to have been hit quite as hard as newspapers. You’ve seen a proliferation of glossy, high production value publications that sell at very steep news stand prices. Could some type of higher production quality attract an audience willing to pay a premium price (and possibly advertises to follow), and would this enable the economic model to survive?
  • iTunes Model. This seems to be what many people are hoping could save various forms of content. The cost per song is low, the convenience factor of buying online is high, and thus people are actually willing to pay for musics, movies, etc. Amazon is trying something similar with the Kindle, and while I don’t own one, my understanding is that you can buy newspapers through it at an attractive rate, though whether this would pay the freight of producing it remains to be seen.
  • Financial Newsletter Model. There have traditionally been any number of people out there selling financial newsletters with investment advice that sell for a very high price, even thousands of dollars a year. I don’t know where this model is today, but if you are offering extremely high value content that a select audience is willing to pay a lot for, that could offer a model for selected types of content.
  • Traditional Advertising Model. A newspaper could attempt to do the eyeballs for advertisers model in an online fashion. If the cost base were low enough, this potentially might be viable.

The key is to find market segments/economic models that are viable longer term and migrate to that structure.

A few other thoughts come to mind as well.

  • Most newspaper companies are burdened with a lot of debt and cruft resulting from legacy practices. Traditionally, local newspapers had a pretty much impregnable franchise. Most markets had only one daily paper and one alternative newsweekly. This gave advertisers few other outlets to reach customers, which led to fairly stable cash flows over time. Owners were then able to use gearing to optimize their capital structures and boost returns. And the value of the franchise only went up over time, so there was always an exit strategy. I’m not a real estate guy, but it strikes me that this was similar to real estate investing and thus fundamentally a buy low, sell high business not entirely dissimilar from securities trading, enabled through the use of leverage and backed by fluctuating but reasonably stable cash flows. No doubt this accounts for part of its attractiveness to Sam Zell, who was the absolute master of this strategy in real estate. Nobody did it better than Sam Zell. Unfortunately, he made his newspaper investment just as the revenue stream of the newspaper business tanked, killing a highly levered enterprise, and destroying the asset value. Instead of buy low, sell high, it was buy low, sell lower – if you can. Also, what do you do with assets like printing presses if you are getting out of the print business? The Boston Globe appears to have a union contract that guarantees jobs for life. It might actually be easier to start de novo rather than trying to reposition an existing entity. (The Tribune Company has the “benefit” of being in bankruptcy, so that facilities a restructuring).
  • Investigative reporting and the “watchdog” function of journalism has a lot of the characteristics of a public good. That it, it is non-rivaled and non-excludable. This makes economic production difficult due to the free rider problem. Typically, public goods such as national defense are provided by the government and financed through taxation. Obviously, serving as a watchdog on government can’t easily be done by the government. Hence, there is a structural problem here. The key to resolving this problem and taking on the legitimate and necessary function of keeping watch on the government is probably to find a model that is economic and provides some other good in its own right, but produces this watchdog function as a by-product or externality. This is how newspapers used to work. They produced this good as a by-product of delivering eyeballs to advertisers. That old model no longer works, however.
  • Interestingly, journalists are behaving just like factory workers in dying Midwestern towns. They have a way of life they were steeped in that brought enormous personal satisfaction and enabled them to live the way they dreamed of. Now that model is obsolete and they have to find a new one. This means their entire way of life is no longer viable. That’s a hard thing to accept and indeed journalists aren’t accepting it. Greg Hinz over at Crain’s Chicago Business points us at a Tribune email in which 55 reporters express their indignation over the Trib’s management effectively doing “test screenings” of news story ideas to find out how they play with the public. This didn’t go over well. The journalists said, “Aside from the practical issues, such as the legal and competitive ones, this policy raises very serious ethical questions. It is a fundamental principle of journalism that we do not give people outside the newspaper the option of deciding whether or not we should publish a story, whether they be advertisers, politicians or just regular readers.” These guys just don’t get it. You can’t have journalistic ethics if you don’t have any journalism. I’ll be the first to acknowledge the potential practical problems of this test, but in an industry that is collapsing, you’d think experimentation to try to keep it going would be welcomed. Not by the workers, apparently. They want to cling to their “work rules” and other legacy practices, treating their field as if it were a holy calling instead of a business. Again, just like the manufacturing sector. I said before that the elite knowledge worker crowd shouldn’t be too complacent and condescending towards what was happening to blue collar workers, and that the latte sipping crowd wouldn’t like it one bit if this happened to them. Well, I was right. Journalists are latte sippers extraordinarie and they don’t like it one bit and are going through the exact same process of denial as blue collar workers did. The end result is going to be no different. The entire notion of what journalism is needs to be rethought and every option needs to be on the table.
  • Facts (that is, news) is a commodity. In the era of the 24 hour news cycle, newspapers are not going to be able to make money simply telling us what happened. There has to be some basis of value apart from that. And again, I’ll ask, is there any value in content aggregation as praticed by the traditional newspaper? I don’t think so. Google and Yahoo already do it well, and do it for free. Aggregation by itself is also no basis of value.
  • The value of being a journalist needs to be re-thought. When I complimented someone on his newspaper writing and said that I thought people like him were part of the future of journalism, he told me the problem was that it took ten years to be able to do that, and how do you pay for that apprenticeship? Thinking about this, I recall an article I saw elsewhere about how experts in all sort of fields were now blogging and writing intelligently on various topics, acquiring significant readership in the process. The question posed was, is it is easier to teach journalists content expertise or to teach writing and journalism to people who are already content experts? We’ve seen the rise of alternative certification programs for teachers that are attacking this very problem in the education field. Rather than expecting a purely educational vocation training, with some content layered on top, we’re finding people who are experts in various fields or otherwise just generally knowledgeable and teaching them to teach. This is something that is probably a big part of any future model. Maybe we solve the ten year problem by letting people spend a decade actually practicing a field, then figure out how to complement that with journalistic expertise.

What the Future Will Look Like

With all this as backdrop, I’ll put out some thoughts about what a viable local print/written journalism business might look like in the future. Keep in mind this isn’t my preferred outcome. I’d rather be able to keep reading traditional newspapers. But that just isn’t reasonable. And of course, the future is highly uncertain. With that proviso:

  • The future is online (including mobile device), not print. (Though see below)
  • Because of the economics of online content distribution and advertising, it is imperative to have a low cost base. Creating a low overhead, low cost platform is key.
  • These new online newspapers will be out of the business of providing facts. Some of this is happening already. Most newspapers have ditched stock tables. But this hasn’t gone nearly far enough. Why bother with box scores in sports, for example? In the online world, if that’s free to aggregate, fine, but don’t spend money on it.
  • As Mike Madison put it, the content of local news should be, well, fundamentally local. But the audience is now global. That is, it’s the global audience for local news, including expatriate audiences and others. This means that local papers should be out of the national news business, out of the national sports business, out of the national business business, out of national entertainment and celebrity news, etc. Why do I need a local paper to include wire service reports when I can read them myself online easily? Conversely, there’s a potentially bigger audience for local news than there traditionally was.
  • The various departments of the newspaper will fragment. Even if the customer set overlaps, there really isn’t any reason to bundle all the various topics that existing in a newspaper together in the online world.
  • The daily “paper” will get out of the business news business. Again, we already see this happening. That market should be ceded to the major national outlets and the local business weeklies. I think those markets should hold up as long as people can expense the subscription cost, which seems likely for at least the higher level employees the advertisers crave. So you get the best of both worlds, a high charge for an online business, and good advertising revenue.
  • Similarly, it seems sports should be outsourced. One possible model is what I call the Fox Sports Net model. That is, you’ve got a national organization like Fox Sports or ESPN that effectively produces local web sites covering local sports and featuring local columnists. These could be even part time employees who work as commentators on TV or other things. This leverages all of the existing infrastructure of their sites and global audiences. Plus the national news and “facts” all all right there. How many people does it actually take to cover local sports? Probably not that many. This model could conceivably work for any vertical, including news, business, entertainment, etc. News could become vertically partitioned with a national-local approach. With low enough costs, it isn’t hard to imagine advertising support adequate to pay for it in sports, with ticket package specials, logoed apparel, beer and bar adverts, etc. On the other hand, perhaps in sports what will happen is that the “news” part of it will go away, and it will be like pacers.com where the coverage is sponsored by the team as a marketing expense, with volunteer fan sites like Pacers Digest covering the gaps. National coverage would similarly be sponsored by the league.
  • News will be opinion and analysis driven. The rise of talk radio, Fox News, etc. shows that this is a model people crave. People already know the news, they want opinion on it and want to know what it means. Instead of ponderous, studied neutrality, how about a combination of old fashioned reportage, opinion, analysis, and gossip? Ben Joravsky is the only reason I even pick up the Reader these days. It’s not that I agree with everything he says, but you know he’s going to say something interesting and entertaining.
  • News organizations will be more overtly partisan. While some might bristle at this notion, the idea of neutrality and objectivity in news has always been problematic. If it totally went away, that would only be a reversion to the status quo ante. There’s probably a longer tradition of overtly partisan journalism than objective. When you read what they used to say about each other in the papers in the 18th and 19th centuries, arguably a golden age for newspapers, it might be more vicious than today, but it was also certainly more entertaining. This also lends itself to a publishing model based on marketing expenditures and support from people with a stake in the message. This seems emminently more sustainable than a model based on a “wall of separation” between advertising and editorial.
  • Newspapers in an online world need to leverage the power of community and social networks to build relationships between the readers and the staff. This could include things like message boards and comments and reader blogs. Now newspaper message boards have become a byword on the internet. They’ve effectively been left untended with predictable results. If you want to build an online community, it needs to be somebody’s job to build it and watch after it. Even something as simple as comment moderation can radically upgrade the quality of discourse. The average comment page on a Tribune article is purest spew, but the comments on Blair Kamin’s architecture blog are usually thoughtful. Why? Kamin moderates his blog. Why not actually leverage user voting to drive content placement? Get out on Twitter and elsewhere and engage. The Tribune made a big deal about having their folks get out on Twitter. I used to read Eric Zorn (@ericzorn) occassionally, but when the Trib made their Twitter splash I took a peek at his feed, which looked promising, and starting following him. Now I read his column regularly. He’s a great example of the right way to use Twitter. His persona is actively engaged there, not just using it as yet another RSS syndication outline.
  • Look for ways to create high value content that could potentially be offered on some type of proprietary basis that lends itself both to sponsorship and to a financial newsletter model of payments. The best example I know of today is the various “Top X, Y, and Z” lists that are published by business weeklies. Perhaps the online newspaper could have a research or think tank arm doing more deep studies than a traditional newspaper. This again also lends itself to alignment with party or policy oriented groups who might finance it.
  • Exploit the potentialities of the online medium. In response to my piece about the power of design in cities, and the TED video on newspaper design, someone noted that the problem with design in a newspaper is that it creates a rigid format that automatically excludes things that don’t conform to it. My blog would never be carried in a newspaper, for example. Very true. But while I think constraints can be healthy, there’s goodness in liberation too. In an online world, why should anyone deal with the tyranny of a word length? Rather than trying to hit a particular word count, why not have a broader range and let the topic at hand dictate the length? This might also increase productivity in writers. Online calls for a different kind of editing. Length is less of a constraint, but clearly people with diarrhea of the keyboard like me need editing.
  • As I noted earlier, the “wall of separation” between editorial and business needs to be re-thought. As Mike Madison put it, “The explicit, ‘nuclear bomb’ theme is that newspapers need to reconsider their most fundamental truth: That the editorial side should have nothing to do with the business side (i.e., advertising and circulation), and vice versa. Every other institution in Western society is being forced to reconsider fundamental truths; newspapers are no different. Chris and every other paid journalist would say: Wait! If the editorial side knows what the business side is up to, then the paper will pander to advertisers and lowest-common-denominator readers. We’ll see sports on the front page (and sports on page 2, and on the editorial page, and on the business page, etc.). The Post-Gazette will turn into US magazine, with writers writing (badly) about themselves, and celebrities, and society balls, and Survivor contestants from Western Pennsylvania. The paper will ignore or under-report serious news about local politicians and will fail to investigate allegations of corruption in city government. And in response, I’d say: I already read the Post-Gazette every morning. Tell me how the world would *change.*” Maybe there needs to be a line, but it needs to be drawn differently. Maybe we do let people pay to have stories placed in more prominent positions or to pay for coverage, but not to allow them to dictate content. There’s always been a big distiction between “publicity” and “advertising” where the value of publicity is higher because it is perceived to be independent, but the control is less because you aren’t paying. Maybe there’s a hybrid model where you pay for coverage, so you are guaranteed placement, but don’t get full control like you would with an ad. Perhaps some disclosure would be needed. I won’t pretend to have a model fully worked out and it would certainly require a lot of thinking, experimentation, and refinement. Keep in mind, the alternative is likely to end up being a purely marketing oriented approach such as pro sports team web sites unless new revenue streams are identified for papers.
  • Leverage an “Amazon marketplace” model whereby the paper includes user or outside created content as well. Huffington Post made a business out of this. As the Reader noted, however, a lot of the business value of Huffington Post comes from SEO optimization on content stripped from elsewhere. Is there a valid business model without this? (While I’m no fan of internet regulation, I do think some controls on malicious content stripping would not be totally unwarranted). I recently read somewhere that the Tribune has something like this in the works.
  • Get serious about design. The average newspaper web site is atrocious. I write about design a lot in this blog and will be the first to admit that the design of my blog and web site are not good. (I’m planning to correct that). But at least I’m a volunteer venture. Take a page from the likes of Google or the Drudge Report. Less is more. Ease of navigation, and well integated ancillary functions are king. Think about the interaction model from the user’s point of view. Why are they coming to your site and what do they want to do there? Make that as easy as possible. And of course it goes without saying that your content should be perpetually online with permament links.
  • The traditional print side of the business will be treated as a mature, declining business, and managed for cash until it is wound down.
  • A lot of “journalism” is going to be citizen-journalism done on a volunteer basis, often by people with an axe to grind. Blogs are already the land of the quixotic crusader, many of them performing legitimate watchdog type functions. The fact that you have to take some of what is said with a grain of salt and realize it is spin doesn’t change the fact that it would appear to be here to stay. I think most people are smart enough to see through a blogger’s personal agenda and judge what is said accordingly.
  • Journalists need to bring back the swagger and have a bit of a maverick attitude. I always thought journalists were supposed to be hard edged, free wheeling, and love to hang out at dives like the Billy Goat and get drunk regularly. When I met several journalists, my romantic illusions on this front were shattered. But it got me to thinking. With the dawn of the internet and the online world, this could be the beginning of a new golden age of journalism. This could be real exciting, gold rush stuff. And indeed it is – for the bloggers, owners of web sites like Huffington Post, and others embracing the new era instead of fighting it. Why should the alternative media have the field to themselves? Why can’t traditional newspaper reporters treat this as a liberating moment instead of a moment of defeat? The news is clearly bad in the industry. People are losing their jobs – including a lot of friends of the guys who are left. I get it. I’ve seen it happen in my own industry too. But that doesn’t mean that newspaper reporters have to end up beaten and defeated. Instead, decide to be the shapers of the new order, not the victims. It’s like that John Belushi line in Animal House, “This could be the greatest night of our lives, but you’re going to let it be the worst.” I won’t go that far, but the story doesn’t have to end like this. Maybe it was never really there in the first place, but bringing back the pride and the swagger, the notion of being an elite crew out to conquer the world, liberated from the constraints of the publishing cycle and the need to suppress opinion or conform to a word length or anything else, and adopting a we’re going to go out and win this new territory for ourselves attitude, might be just a dose of what’s needed. The winners are yet to be chosen in this new world order, and I see no reason that today’s journalists can’t claim the title for themselves.
  • The reader has to be treated like a customer. Today the advertiser is the customer. That may be true tomorrow as well. But in the new world you also need to treat the reader as the customer. In the old days, when someone had no choice but to subscribe to the local paper, newspapers could afford to adopt a “we don’t care, we don’t have to, we’re the phone company” attitude. Well, even the actual phone company doesn’t do that any more. Since it’s my blog and I can write what I want to, I thought I would indulge in a bit of a personal complaint to illustrate what I’m talking about. Until recently I subscribed to the Financial Times home delivery at a price of about $300/year, paid for by me, not my company. I consistently had delivery problems, especially on Saturday, the one day of the week I actually cared about getting a paper since I couldn’t pick one up at the office and there is no place convenient to buy one in the neighborhood. Despite complaints, this was never resolved, so one morning when my paper didn’t come, I called them and cancelled my subscription. The agent told me not to do that and that they could put in an emergency redelivery request. I told her that this had been done many times in the past, and I never once got a paper delivered. But I’d make her a deal. I’d cancel my subscription, and if they got me a paper before the weekend was out, I’d call back and un-cancel. She immediately lost interest in the redelivery request and simply processed my cancellation. It was apparent to me that this notion of a redelivery request was never anything legitimate. In an era of decling readership, how many people writing $300 checks can the FT afford to lose? It’s similar for any paper. Readers are precious and need to be treated like valued customers and community participants, not utility ratepayers.

What does all this leave us with? A small, lean, local news only organization. There are no printing presses. There might not be much of an office either since people can work remote. Things like photography can be outsourced. I’m envisioning a pretty small, nimble staff, similar to a startup type company. Low bureacracy, low overhead. Reporters are personalities, and are out there interacting the community that grows up around their publication. There are a few staff members doing hard core R&D/think tank/investigative work. The major investigative reporting is done with an eye towards brand building. Possibly with a low enough cost base you can sustain this sort of organization with a mixture of advertising, subscriptions, and a public broadcasting/foundation supported model.

There’s also a constellation of other organizations, such as overtly political sites, sports team web sites and online communities, a business weekly, citizen-journalists, etc. What used to be the newspaper is now fragmented, online, much more opinion driven, and with a much looser set of journalistic rules.

Will Print Survive?

What about actual print? Will it survive? I’d like to hope so, at least in some niches. I don’t want to live in a world without newspapers. But probably many if not most won’t survive. The national business papers like the Journal seem like winners. Maybe the New York Times evolves into a truly national publication catering to the upscale audience. But for the average daily paper? I don’t know.

Consider this: the CD is in serious decline as music buying (or not buying as the case may be) moves online. But vinyl has made a huge comeback as an audiophile format. Could something similar happen with the newspaper? Freed from the constraints of the mass market, could an upscale, super-high quality publication make it? This is sort of what I called the magazine model. It seems possible. There always seems to be a backlash against everything. As electronic media has become pervasive, the notion of having a physical object becomes a luxury, and perhaps like mechanical watches, fountain pens, vinyl records, etc., physical newspapers could be marketed as such to a limited audience.

One way to do this might be some type of print on demand solution. The Newspaper Direct printouts are pretty high quality, on standard 11.5×17 paper I believe. Conceivably a top quality color printer with good paper stock could allow people like me who are willing to pay $6 plus printing costs to print our own paper in the morning, or to buy one at equipped news stands. Of course, this means you need someone to do physical layout, which undos some of the benefits of online. But perhaps the original web publisher doesn’t have to be the one to do it. There is a startup publication called The Printed Blog that is looking to do just this with blog content. They actually contacted me about it, which is how I found them. Maybe something like this is a win-win. Specialty publishers will aggregate content from multiple sources into a slick, upscale printed form.

Plus, there is the problem of legal notices. How can you publish legal notices in the local paper when there isn’t one? A question to be asked for sure, but perhaps the requirement to physically publish legal notices provides the start of a revenue stream here.

Again, nobody knows where this thing is going. There are more questions than answers at this point. But as with many industries before it, the newspaper industry is now discovering that the way things have always been done just isn’t going to get it done in the future.

Thanks for reading and I welcome your thoughts as always.

19 Comments
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19 Responses to “The Future of the American Newspaper”

  1. Anonymous says:

    This could have been 20 words shorter.

  2. Derek Young says:

    Brilliant analysis. Seriously, I have been thinking a lot about this lately and have yet to see this level of thought put into the issue by anyone, including mainstream journalists. I just stumbled across your blog the other day, but I hadn’t expected to find this so glad I subscribed.

    My primary concern with respect to the demise of newspapers is that there are no obvious solutions to the vacuum that leaves in local political reporting, namely with respect to local and state government. You’re correct that much of the rest can be found elsewhere (why in the world does my local paper still employ a movie reviewer?) But talk radio, TV, and blogs all source their material back to newspapers. There must always be that type of journalism to feed the opinionators out there. I think it’s a frightening enough possibility I’d support a government endowment, a la NPR, for local reporting so long as the government was unable to reward/punish income and end up with State media.

    I agree that more overtly partisan reporting is probably the future and frankly I’m ok with that. When you travel abroad you always know which angle the paper is taking. It’s known by all and therefore read with that in mind. Conservatives were the first to push this model because they perceived more subtle bias. It appears that liberals are recognizing it and beginning to shed the objective cloak as a result. We all know how to consume that format, sith a skeptical eye. But I like the notion of a more true watchdog role for an opposition outlet. Who is more likely to break a negative story about the Obama admin these days… the NYT or Post? Ok maybe calling the Post journalism is a stretch but you get my point. And it’s nice to have another outlet challenge the opposition in kind.

    Anyway, I can’t say enough about how brilliant this is. Well done.

  3. Crocodileguy says:

    I agree with a lot of what you wrote. I've tried to figure out ways in which the newspaper could become more appealing to consumers, and I've come up with very few practical ideas regarding this. Honestly, I know the reason I don't read newspapers is because they are bulky, the folding can too easily be crinkled, and that nothing reported in the paper provides enough detail or analysis for my liking, with the exception being the ever-fewer investigative series of reports.

    Frankly, if newspapers want to be relevant for ME, I would advocate a magazine format, with smaller pages that do not fold out to be huge, factual and neutral information about local government (meetings, legislation, etc.), local & world news (factual and neutral), weather, sports results, investigatie reports, and then loads of detailed, nuanced op/ed-type analysis. There is no reason for a local paper to delve into reporting business news, but I think there is a market for business analysis. Same with entertainment, sports, politics, etc. Analysis is important, and as you noted Americans have seemed to choose opinion over "news."

    Like the WSJ, if the level of journalism and analysis is high, people will pay to read because they derive some kind of unique value out of it. Which blogs simply contain news, and no contemplative analysis of said news? Not very many. The value is derived both from the news and the analysis, and that analysis is a competitive advantage–no one else can duplicate the opinion/analysis of an individual working on a particular paper or blog–no two takes are alike.

    It's all about discovering a competitive advantage and taking advantage of it. High quality journalism would be rewarded far beyond any of the current watered-down crop of drivel comprising most pages of the modern, local branch of the national news conglomerate paper.

  4. Pantograph Trolleypole says:

    Great work as always. I wish I could read all of your posts but I’m trying to keep up with the 400 other feeds in my Google Reader. Which gets me thinking, I don’t read national news because I can get the gist of what is going on by heading to Kos or any other slanted blog. But local stuff is pretty worthless at the newspapers as well. If you want real local content you go to the local blogs for the deep dish on the subject you’re interested in with more background than the page will allow in a newspaper.

    When doing my own aggregation for work (i send out an aggregation of transit and TOD news every day) It’s nice to know that something is going on (like a new transit line or a TOD plan), but the reporting is atrocious and so basic. No one is asking the right questions which makes the blog findings much more stimulating and engaging. College level instead of high school level. On local issues this has to be killing newspapers as well. Sure bloggers link to the basic story, but then they rip it to shreds or give you ten times more information as background.

    I do like the suggestion of teaching experts journalism instead of having journalists become experts. As someone who consumes an inordinate amount of transit and transportation related content, I can tell you that the worst thing I see daily is someone from a newspaper writing with transportation as their “specialty” who doesn’t actually understand it. Ben Wear from the Austin American Statesman is a classic example of someone who drives a car and thinks that is the only transportation he needs to cover. Little details like calling a catenary a pantograph drive me insane and make me ultimately question the rest of the reporting.

    Anyways, keep up the good work. It certainly makes me want to keep reading each time I see a post. I’m trying to keep up!

  5. thundermutt says:

    The economist in me always wants to look at demographics. A few thoughts in response:

    1. The percentage of adults with college degrees is still only around 30-33% across the US. Therefore, people who have the luxury of thinking deeply about things (an obvious majority here!) can be said to be a minority. Newspapers as currently configured and written do not address this educated elite, with the exception of the WSJ and NYT.

    2. As the demographic bulge of Gen Y ages (leading edge now is pushing 30), they will not likely “discover” print. Text, to them, is written and read on screens. And generally, their approach and outlook is web-centered: they have almost always had instant access to facts. They have not learned (yet, one hopes) the discernment (research and thoughtful analysis, accompanied by synthesis of competing views) that converts facts into “information”.

    3. There are already institutions with people who get paid by donors and the Feds to research, analyze, and synthesize facts into information: colleges and universities. Their work is vetted, published, and freely available. For those of us who are educated, it is easily accessible.

  6. Jeffrey Cufaude says:

    One of the things that frustrates me most about Indy is the deplorable quality of the Indianapolis Star. It, like our state legislature most days, is an embarrassment in an otherwise fine city.

  7. Radarman says:

    Everyone interested in this exceptionally thoughtful (and that’s saying a lot since this is as thoughtful a blog as one can find) post should check out the Voice of San Diego to see what a model on-line local news site can look like. They’ve already won prizes there.

    We here in Cincinnati have been living without a real newspaper for decades.

  8. Ironwood says:

    Urb:

    Congrats on tackling a subject that is quintessentially urban, but not typical for your blog. Keep pushing the edges of content
    and comfort for yourself and your readers!

    I've been reading a lot on the topic of whither the newspaper (hard to avoid in the past weeks), and a lot of it is either gleeful crepe hanging by younger bloggers, impatient for the New World Order, who were never hooked on print media in the first place, or, as you describe so well, wistful belly-button gazing by long-time print reporters.

    Your is the best piece I've come across so far. Will need to go back and read a couple more times. It is dense with ideas.

    I'll speak to just one here. I'm more intrigued by what drives people to investigate and report, than on what drives readers to read. Maybe I should be relying on a sample that bigger than one (i.e., myself), but I, as a reader, am motivated to seek out good content. so I'll assume other readers feel the same way.

    The more important question, for me, anyway, is what motivates people to investigate and report? Not that hard: a salary, a yen to write, an axe to grind. Ah, yes, that pesky salary. That's the core costs of the new media, isn't it? Sure, travel expenses, but essentially it's salary.

    For the reporters, investigators and bloggers who can't pay the rent on love and passion alone, you need cash. That's aproblem if you're young, want to start a family, get a nice couch.

    But if you're approaching traditional retirement age, can be a little more flexible in work schedule, can rely on social security and some other part-time income? Maybe not so much. I return to a pet subject you've let me write about here before: Boomers. 76M of them, one turning 60 every 8 seconds. And most of 'em don't want to retire. They don't want to work full-time, either. they're not sure what they want to do, actually, but they plan to stay involved, informed, flexible and busy.

    Though raised on print media, millions of Boomers are as computer-savvy as their kids (notwithstanding the caricatures), and are already making up a significant part of the blogosphere and consuming their news online.

    I don't have the figures, but I will bet you dinner at the Billy Goat that the fastest growing group of bloggers and blog readers is the 55+ age-group. (Sorry, but the fastest growing segment of almost any group is the 55+ age group. There's just to many of us. Get used to it. It's like China. There's just too many of them, too.)

    An army of 55+ year-old reporters and bloggers is enough to strike terror into anyone's heart, mine included. (Surely, one of the joys and strengths of the current blogosphere is hearing from younger writers who might have to wait many more years to get their thought pieces published in the print media).

    But leave aside the justifiable terror of a tsunami of pompous, nostalgic, cranky, Crosby, Stills & Nash types using up band-width. There's also a justifiable shudder of terror that should be running down the backs of elected officials, who can expect floods of FOIA requests, grey-haired former research assistants combing over public records, people with thick rolodexes and industry connections, who can connect dots, decipher jargon and double-speak and can rely on 30-40 years of professional experience to figure out which closets have the skeletons. (This goes back to your point about whether it's easier to teach the world to journalists or teach journalism to the world.)

    Here, as with all trend-spotting, problem solving, prognosticating and opportunity searching, we're making mistake if we don't factor in the enormous, heretofor unknown phenomenon of a third of the workforce turning 60 (the wealthiest, best educated and most experienced part), and just looking for ways to stay involved, make a difference and remain interested, interesting.

    Anyway, great piece. You may end up getting more comments on this one than on your recent one on Cleveland.

    Cheers.

  9. Redrabbit says:

    I always enjoy your thought provoking articles – thank you.

  10. JG says:

    With existing local papers not completely disintigrating, I would like to see their sustainability come through more focus on LOCAL news. Urbano made this point nicely somewhere around word 425,805. Within that, does anyone think the typical newspaper audience would prefer more local business and arts? INDY has several smaller newspapers dedicated to this, and the INDY STAR tends to have sparse coverage of business.

  11. Anonymous says:

    I was wondering if you would finally say it, and you managed to at the end. Print should survive in a “national” newspaper (maybe two or three).

    The only problem I have with the factionalized political coverage is that the moderate/rational voice always gets drowned out simply because it is the least sensational sounding of them. There’s no “call to arms” and no name-calling, so therefore it doesn’t get noticed.

  12. Anonymous says:

    For the record, I am 21 years old, and even though I use the web for many news information, I see the value of what a newspaper can represent.

    One of the things I have like about the physical newspaper is that it makes a much better collectable item than an online website. Over the past few years I have formed a collection of newspapers from historical dates within the past decade. My collection includes both USA Today and the Star from the day after 9/11, the 2000, 2004, and 2008 elections, the Colts winning the Super Bowl, and even the first day of the war in Iraq, as well as other major events within the past few years.

    To me, if nothing else, the newspaper can give me a portal into the past as I often look at these papers I’ve collected just to see what things were like even a few years ago. To see the opinions change about Iraq from March 20, 2003 to last year is still astonishing to me. An online website doesn’t give me the same as this, and I’ve tried printing off pages for a historical event, it does not feel the same.

    Just look at how popular the newspaper was on November 5th last year, even if nothing else, the newspaper should still be around for historical events, as collectables of a big event in history, as of yet I haven’t seen any website that has brought people out in droves as I did when many newspapers sold out last November when people suddenly wanted a paper.

  13. David says:

    In Detroit, the Free Press has moved to one of the most aggressive online models in the nation, in a big city anyway. Its caused me to start picking up USA today at lunch each day, so I can still feel the print between my fingers and flip pages between bites. Sign me up for that super glossy New York Times, as soon as it arrives. The Free Press has chosen a different model.

  14. The Urbanophile says:

    Thanks for the comments everybody – sorry I’m so late chiming in.

    Derek, thanks for the props! I share your concern about things like statehouse reporting in an era of no newspaper, though I think blogs can fill some of the gap.

    Pantograph, you’ve got me beat on subscriptions, but my reader is getting full too. Perhaps I’m too harsh on aggregation. The right kind of aggregation and editing of material can be useful. While they aren’t the most interesting posts for me personally, my periodic “news roundups” I’ve been told are valueable to those who don’t have time to scour the web looking for the best Midwest/urbanist reading.

    Thanks, Radar – appreciate the kind words. I try to go to the Enquirer daily, but the site design is terrible. It is all crime news and stuff like that. Very little really interesting about Cincy.

    Ironwood, interesting thoughts from a boomer perspective, as always. I think the idea of being a crusader of sorts appeals to that demographic as well.

    Redrabbit, thanks!

  15. Michael Pereckas says:

    I can certainly understand your frustrations with delivery. I was a subscriber to the local paper for a dozen years, and while I paid for the paper very reliably, actually receiving the thing was another matter. It’s had to tell exactly what portion of the problem was actual non-delivery and how much was theft after delivery, though clearly theft was the major problem. So every morning I’d jump out of bed and immediately put some clothes on and run out to see if maybe the paper had been delivered and had not yet been taken by someone else. Sometimes yes, sometimes no. Honestly, it’s really nice now that I’ve dropped the subscription to not get up extra-early just for the sake of trying to actually get the newspaper. I know the paper isn’t exactly to blame for a culture of theft, but when your business model is to ask people to pay for something that you then just drop on the ground outdoors (they don’t even put your name on a sticker or anything, it’s totally anonymous) and hope no one walks off with before your customer gets it, there may be some problems.

    I did like having the printed paper, but the web site, it’s there every single morning, I don’t have to get up early and run outdoors hoping to maybe actually get what I paid for. Indeed, in exchange for no longer paying them at all, I no longer get frustrated in the morning a large fraction of days.

    I’m not sure what the lesson for the newspaper is, exactly, but when your customers feel genuinely happy to no longer be customers, there’s going to be a problem. (Reminds me of broadcast radio. Do I want to listen to the classical station in mono with loud background hiss? NPR with the signal randomly cutting out totally? Even though I live right in the city? No, I’ll download an mp3 over the internet from somewhere or other, that technology actually works.)

    Magazines don’t suffer that, at least. 12 issues a year instead of 365 leaves much less chance for screwup, and if the magazine was a day-or even a week-late, you’d never even know. Theft from mailboxes must happen, but it’s nothing, absolutely nothing like the newspaper thing.

  16. Invogen says:

    Very good analysis of the newspaper industry. We should take you to see our clients ;-)

  17. Levi says:

    I don’t pretend to have given this the thought and analysis of the original post, but there is one issue I’d like to raise. The newspaper industry after television was drastically different than it was before the advent of television. And the current problems may well trace to this shift more than any other fault in the current economic model.

    Prior to television, nearly all towns and cities had competing newspapers. Even the really small towns had separate daily papers. And because of this competition, you often had papers with clear editorial slants. There would be a democrat paper and editorial staff in the morning daily. There would be a republican paper and editorial staff evening daily. There were papers that favored specific agendas, for example, Populist papers were notoriously “dry” during Prohibition, and thirty years before that, firmly behind adherence to the gold standard. People generally subscribed to the local paper that favored their political alignment, and when you read a paper (or when historians read 19th and early 20th century papers today), you had to read it with that bias in mind.

    Fast forward to the development of television and network news. For the first time, the dailies had competition from technology. This competition hurt circulation, and many newspapers folded. By the time television was a staple in American households, most towns and cities were left with only a single daily newspaper.

    There was another shift going on at this time, as television before cable was limited to the networks. And because there were only three principal networks, Washington prohibited (or tried to prohibit) the creation of biased or slanted network news through the Fairness Doctrine. Under the federal rules, Network news had to give each political party equal time.

    I’m not a journalism scholar or historian, but I think it’s a fair statement to say that the modern concept of neutrality in reporting was a direct result of these two occurrences. Newspapers consolidated so that most cities and towns only had a single paper, or at least one dominant paper. They had to appeal to ALL people to stay economically healthy, and could no longer target one party’s loyalists. And television networks were required by federal law to give equal treatment to political news in order to keep their licenses.

    So where I’m going with this (or at least trying to go with this), is that our natural consumption state may very well be for slanted or biased news. It’s what we had when print was the only form of media and when there was competition among newspapers. It’s what we are starting to get now with television through cable news. And it’s certainly what we see with internet reporting.

    Trying to draw a conclusion from this, I think the problem with the newspapers began when they adapted to meet television sixty years ago. The Internet and online media have simply accentuated a problem that was already there. The problem for the papers, simply defined, is that when given a choice, people are going to seek out people (and news sources) who think like they do.

  18. Sid Burgess says:

    To throw out a piece of meat to everyone, here is an idea or two.

    Why don’t newspaper companies approach municipalities and attempt to set up franchises? Like your cable company, municipalities grant franchises for industries that otherwise can’t see an economic advantage for installing the infrastructure with the threat of getting under priced by a larger more capitalized company.

    I am sure that newspapers could convince some city councils, that if they would allow such an agreement, profitability of print media would rise. This however fails to address any fundamental shifts (as outlined in the piece) that are causing the decline of the papers in the first place.

    Another highly controversial idea would be to treat print media like public education. Though it may be easier to use the illustration of of your trash service. In many cities, you pay the muni for your trash service but they in turn are simply subcontracting the work to a private trash service. If cities already have an inerrant responsibility to educate people (i.e. public schools) could the case be made that having a strong strictly journalistic daily paper to ensure locals have access to the news they need? Funding would be just like your trash service… privately provided through a contract with the muni, but you pay for it on your water bill.

    I really don’t like either of these concepts but I love a lively debate. :)

    On a more serious note, why couldn’t a informal and voluntary agreement be reached. Citizens could “opt” for the service of receiving their local news in print every morning and pay for it on their water bill. This may change the way people view the medium more which in part, is part of the reason the papers are failing to begin with.

    My position is very simple. Papers are failing because people like me are not getting what they are looking for in a paper, not because it is printed with ink. I print of tons of articles to read later and I am sure millions do too. I would happily pay a much more significant due rate to receive a high quality paper full of good journalism and zero opinion. Am I alone?

  19. Anonymous says:

    Read this short article. If we do get the big flare the scientists think we might then the print media better be ready. Their future would be secure for several years after such an event and they should make the most of it.

    http://science.nasa.gov/headlines/y2009/29may_noaaprediction.htm?list1306490

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