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net.wars: All change

by Wendy M Grossman | posted on 09 January 2009


Every so often you wake up and discover the future is hitting you with both fists. The US media is (or are) having such a moment. First, besides the usual reasons for the news being all bad – scare stories sell papers, the economic news really is all bad – journalists themselves are feeling the pinch. Newspapers in the US are in a dire state. And second, next month the US is due to switch off analog broadcast television, a change for which the country seems insufficiently prepared. (And think of the waste in dumping all those perfectly functional TV sets!)

Wendy M Grossman

Newspaper economics are all bad. The Atlantic thinks the New York Times will be dead by May (although writer Michael Hirschorn calls chances "slim"). In response, Poynter says nothing good about that Hirschorn's arithmetic or fact-checking.

But the far bigger risks are to more purely local papers. There are rumours that the venerable Hearst Corporation is going to put the 145-year-old Seattle Post-Intelligencer up for sale and may fold it. The paper's Editor disclaims all knowledge.. In one of the few other two-newspaper towns left, Detroit, the two rival papers print only three days a week.

Even more unnerving is the financial state of other local newspaper publishers. Lee Enterprises, which owns 49 local newspapers as well as more than 300 weekly newspapers, has seen its share price drop as low as 30 cents (though it's now more than double that), and its staff pared to the point of demoralization. McClatchy, owner of such well-known papers as the Miami Herald (home of columnist and novelist Carl Hiaasen) and the Raleigh News and Observer, has a share price of $1.87, $4.77 million in cash – and debt of $2.07 billion.

Meredith, which publishes Better Homes and Gardens and many other titles, looks good because it's only cut 250 jobs and closed a title for a one-time charge of $16 million.

You can track all this cheery information at – what else? - Newspaper Death Watch.

What's happening isn't a simple matter of old media failing to adapt to new media. As Jack Shafer points out in Slate, many of these papers jumped on the Web quite early. The News and Observer, for example, had such a good Web site by 1995 that it drove Ben Rooney to persistently ask the why a small local paper in, of all places, North Carolina, was beating a large UK national. Result: the Electronic Telegraph.

Shafer's point is that once the newspapers tried the Web, they stopped innovating; Salon.com's Scott Rosenberg adds that by stagnating newspapers lost the experimentally inclined staff who should have guided them into new media. Probably, true. Although, you have to point out that as lovable as Salon is, its financials don't look that great either: share price 35 cents and a $1.28 million quarterly loss on revenues of $1.98 million as of September 2008.

Salon isn't alone; Digg has a fine burn rate of nearly $5 million a year. And see this analysis of The Huffington Post, which puts its value at $2 million (instead of the $24 million it recently secured in venture capital) and its revenues at $302,000. And that's even though the site prides itself on not paying its writers and is being called out on stealing stories from other sites. Salon.com actually pays for its content, how quaintly old-fashioned of it. (ObDisclosure: I have written for Salon, though not recently.)

Three obvious things are killing the newspapers:

  • the downturn in advertising due to the recession;
  • the flight of classified ads to Craig's List and other Web services, which are so clearly a better medium; and
  • the migration of readers to the Web, blogs, and other free services.
  • Blogs in particular get some of the blame; while many blogs take the trouble to link readers back to the original site for the full story, adding to the originator's page views and therefore ad revenues, many more just republish in full. (See again the Huffington Post, whose behaviour as a commercial organisation run by a media professional, is truly shameful.)

    But the bigger problem seems unquestionably to be the amount of debt some of these companies took on during recent boom times, apparently convinced by the stories appearing on their own business pages. Newspaper Death Watch is right; but the story in many cases is hard-working local staff suffering for the sins of their corporate owners.

    "Where," asks one of my American journalist friends, "are Americans going to get their news?"

    Most, of course, get it even now from TV.

    And it's just too bad that the same groups – the elderly, the poor, the disabled – who rely on home newspaper delivery, which is going the way of the doctor's house call, are the same groups that will be left staring at a blank screen if Congress doesn't accede to Obama's request to delay the February 17 switch to digital, in part because there's a waiting list of 1 million for coupons to help consumers make the switch – and the program to supply those has run out of funds.

    Government sponsorship to replace your TV? Seems very American, somehow. Life without newspapers? Uninformed. Life without television? Unthinkable.


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    Wendy M. Grossman’s Web site has an extensive archive of her books, articles, and music, and an archive of all the earlier columns in this series. Readers are welcome to post here, at net.wars home, follow on Twitter or send email to netwars(at) skeptic.demon.co.uk (but please turn off HTML).