CNN Money today repeated reports that Freedom Communications will declare bankruptcy. Freedom is one of those family owned newspaper conglomerates, and is known for owning some fairly right-wing newspapers such as the Orange County Register and the Colorado Springs Gazette.
This development just helps to illustrate that no daily newspaper is safe from the trend that will destroy old-fashioned paper dailies before long. It has been believed for a number of years now that going local might save paper dailies from oblivion. Sam Zell thought this was an ingenious plan for his Tribune-owned papers such as the LA Times. And then Zell’s Tribune declared bankruptcy. (The last I heard of Zell, whom I loathe, his creditors were hunting him down for his gargantuan incompetence.)
But, the OCR and the CS Gazette are both very locally oriented papers, and Freedom is declaring bankruptcy. The problem isn’t what they’re covering. The problem is simply that no one but old people wants paper dailies. Also, there is evidence that the very structure and model of the daily newspaper prevents it from functioning in a world of instant electronic news.
If we look at the weekly business journals that dot the landscape, for example, we see that they are doing quite well at the electronic news game. They all have daily email updates which go out to readers and contain the latest news tailored for their readers. Business journal updates contain the latest news from the wire, but also contain local business stories, which are the best part of any local business journal.
They can put out news as it happens, while dailies cannot. Dailies must constantly worry about scooping themselves. For example, when a new business story turns up, many of the dailies aren’t willing to publish the story online right away because then the reader will have already read the story by the time it turns up in the paper the next morning. Obviously, advertisers don’t like self-scooping because they want the news in the paper edition to be all new to the reader so he feels the need to look at every page. And, a paper filled with old news will eventually be deemed unnecessary altogether, which is definitely bad for the newspaper company. True, it might be possible to produce an online version of the story, and then a longer more in-depth version for the paper, but that requires more time and more staff.
So, while the weeklies crank our daily stories online and disseminate them through email and other means, the dailies often hold back on news so that the news in the morning paper appears fresh. It’s not hard to see who will win this game. The well-informed reader doesn’t need the daily to get the news, so all the news in the morning paper turns out to be old news in spite of the daily’s best efforts.
In addition, the weeklies offer in-depth analysis and lengthier coverage that only weeklies have traditionally been able to manage. Longer stories are best read in paper format, so subscribers continue to buy the weekly papers, and consider the daily news to be an added bonus. Meanwhile, the dailies continue to offer the same old short stories, but that type of news can be had through an endless array of other news sources.
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With all due respect, the problem is that Zell and Freedom and many other newspaper companies took on enormous debt in the 1990s and or early part of this century.
If they did not have to service that debt, most of these companies would be enormously profitable.
Mike, you’re wrong. Advertising dollars have cratered, and subscription growth is nil. Also, they have adopted enormous debt in order to stay afloat. No one’s willing to pay a subscription price that covers the cost of doing business.
Also, saying they’d be profitable if they didn’t have debt is a little like saying that we could jump off skyscrapers if there were no gravity. In the real world, the debt is there, and it’s a factor in addition to plummeting advertising dollars and lackluster readership. They could make money if people were willing to actually pay for the newspaper, which they are not.
I doubt that daily newspapers will entirely go the way of the dinosaur. Although it is true that internet competition is forcing dailies to struggle to stay relevant, daily newspapers still have a few advantages over other forms of media.
Papers, particularly tabloid style papers such as The Metro still have direct advertising access to consumers. The effectiveness of internet advertising is not yet proven as far as local businesses in many areas are concerned. Local businesses are justifiably distrustful of advertising on the internet. However, print ads are well understood, and proven.
Not all consumers get news on the internet yet. Some people may never use it. Also, the format of certain sections of newspapers, such as the sports section, letters to the editor, entertainment, etc… are appealing to many consumers. Although internet sites duplicate these formats, consumers might still see them as inferior substitutes.
Ben, yes, in fact, I tend to think that the rack-and-stack papers that are found in coffee shops and similar places have actually increased in relevance. They are free, and people actually read them over lunch and on the train, etc. I like to read the Denver Daily News which is the local rack-and-stack daily.
But again, no reader would be willing to pay for them, and even they are struggling. Some daily rack-and-stacks have recently switched to 3 issues per week.
The problem isn’t what they’re covering. The problem is simply that no one but old people wants paper dailies.
Old people and government employees. Those are the only two groups that I know of who are still subscribing to newspapers.
I think that content has something to do with it. Newspapers are full of pro-establishment fairy tales and extreme fear-mongering (the Ottawa Citizen on the weekend devoted its entire front page to a panicky story about the Pig Fever non-epidemic as if it was Pearl Harbor or 9/11 – I wasn’t going to waste my time reading their swill but probably they were banging the drum for forced vaccinations and other pre-emptive emergency measures).
The eminent superiority of the internet is that whenever you smell a con job in something you are reading it is only a matter of a couple of clicks to find out the other side of the story, discover the history and credibility of the sources, and read the debate between bloggers and other anonymous persons who sooner or later will expose all of the facts and viewpoints which the newspapers (and radio/tv) would sooner die than acknowledge or help to propagate to the public.
Old people dislike internet news because you have to be fairly nimble to dig up facts quickly and they would rather receive bland reassurance than raise uncomfortable questions about the soundness of their state benefits. Government employees prefer establishment sources of information because they need to know the partly line and only the party line, in order to survive and thrive on the job. Laughing out loud at CO2 or Pig Flu concerns when discussing next year’s budget priorities would be a career-limiting move.
That is why there are more and more calls to rein in the “irresponsible” internet and to make bloggers “accountable”. The gatekeepers are losing control and they will not let newspapers disappear without getting the upper hand over the wild, wild nets.
You cannot wrap fish with computers. You cannot or should not swat flies with computers. You cannot make kindling with computers. You cannot line a poor man’s coat in cold weather with computers. You cannot crumple computers and throw them at people. You cannot rip a computer in half when angered by a Krugman column.
Print has its uses, however humble.
Print has its uses, however humble.
True, but the price must be discounted accordingly. And you forgot about lining bird cages…
Speaking for myself, I’d much rather read a newspaper than read the same story on a computer screen. No lag, no annying popups and slow to load sites. The problem is that the printed word on newsprient is mostly garbage and I wouldnt subscribe to any available fishwraps if they were free.
Most of the news I get comes from blogs. Too bad they cant be printed daily and distributed to my front door.
The only flaw I see in this article is calling the Orange County Register a “fairly right-wing” paper. It carries pretty much the same AP/NY Times/WashPost articles as every big daily in America. They just have a pro-freedom editorial page.
Most of the news I get comes from blogs. Too bad they cant be printed daily and distributed to my front door.
whoa. There’s a business idea.
Daily newspapers are dying a slow, painful death. Unless they can evolve by offering new services (say, the local news on your i-Phone by paying a monthly or yearly fee) they’ll either downsize considerably or disappear.
Newsstands here smelt the wind and started selling pretty much everything they can to stay afloat: toys, housewares, clothing etc. A sign of times.
I buy the local newspaper every day, mostly to learn how towns are wasting more money, but given the fact that I seem to become more irritable the older I become I’ll probably quit the habit.
but kakugo, aren’t you in italy, where even “libero” gets government subsidization, as part of the government subsidy of “free speech”? the print lobby in italy still seems quite robust.
Creative Destruction…
FYI
http://74.125.47.132/search?q=cache:NusYQyohJsgJ:adage.com/mediaworks/article%3Farticle_id%3D134795+newspapers+debt+profit+%22advertising+age%22&cd=1&hl=en&ct=clnk&gl=us&client=safari
How has the Christian Science Monitor been doing since their switch to an online daily focus and producing a weekly?
Newspapers are dying because of changes in technology, demographics and journalistic competence. The last item is preventing their survival by innovation and improvement. Even their websites suck. But as these corporate monopolies and their news-bureaucrats release their grip on the marketplace, entreprenuers should come in and take local journalism to a new era, whatever that will be.
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