Friday, 6 February 2009

Newspapers of the World Unite, you have nothing to lose but your delivery costs

My friend Erik recently discussed a NYT editorial on the demise of newspapers and it called to mind a few thoughts I've had on the topic recently.

Personally, I'm not too troubled about the possibility that hard copy versions of newspapers are unlikely to survive. Well, I shouldn't say I don't care, I do really enjoy perusing the paper copy of the newspaper in the morning. It's nice to be able to take a section with me for long car or Metro rides or to pass the time at a kids basketball practice, or grabbing the, (not long for this world), Book Section to read in bed on Sunday night, etc. There's something idyllic about sitting together trading sections of the paper on Saturday/Sunday mornings, drinking coffee, or whatever. But we'd probably be better off if we all just got past those romantic notions and conveniences; the sooner we all stop demanding hard copies and just read on our laptops or PDAs, the sooner newspapers can redirect those, presumably substantial, production and delivery costs to news gathering, and the fewer trees we'll need to sacrifice and fuel we'll need to burn to deliver our news.

The problem is not that we're facing a day in which we may not have news sources that can double as bird cage liners, the real problem is that we're facing a world in which it just doesn't pay to produce high quality news reporting, be that delivered online or on your doorstep.

I'm sure that part of the problem facing newspapers is that demand for news is dropping. People prefer porn or youtube or the comedic stylings of Bill O'Reilly or Jon Stewart. As a cornucopia of media sources and alternatives emerge, the demand for some news may not be as high as it once was. I, for example, rarely watch TV newscasts anymore, but can recall a time when watching The National was a fairly predictable part of my daily routine. On the other hand, I think I've become a bit more sophisticated reader of "print" news, reading more stories, more sources for some stories (despite the shrinking newsrooms), more editorials and regularly taking advantage of my ability to peruse less mainstream sources such as ZMag or even National Review. So, in some sense demand has dropped, but in another sense, demand may simply have changed form. As the financial suffering of newspapers has increased, I, and many like me, having actually been watching less TV news and reading *much more* newspaper news.

Despite this, newspapers can't make money anymore. As the print editions slowly wither away, the revenue streams become smaller and more precarious. We know that the NYT and WaPo would have to shut their doors or run a skeleton crew if they had to rely solely on their online revenues. As the NYT editorial quotes, "The notion that the enormous cost of real news-gathering might be supported by the ad load of display advertising down the side of the page, or by the revenue share from having a Google search box in the corner of the page, or even by a 15-second teaser from Geico prior to a news clip, is idiotic on its face."

But the problem for newspapers isn't, or least isn't just, that demand for news has dropped off significantly, the problem is that there's very suddenly, via the magic of the internet, an incredible increase in the amount of supply. So, it seems a little early to mourn the newspaper if demand for its content persists. But what is the problem? I love Salon and NYT but I've never spent a nickel to access them online because they're not providing me with anything of which I can't get a reasonably decent version of for free from other respectable news sources or from intelligent bloggers. The NYT can't charge for content if the WaPo and the San Jose Mercury News don't charge for content. So, clearly what these newspapers need to do is to control and organize the supply. They must get together and assemble all U.S./international newspapers under one or a small number of central umbrella organizations. A condition of membership of these organizations, or cooperatives, would be to provide online content only through some portal controlled by the organization. The organization would charge subscriber fees and set advertising prices but would have absolutely no editorial control. Users could buy "all you can eat versions" or buy single articles. Revenue would be shared based on number of articles perused. If readers read more NYT stories, NYT gets a larger share of the revenue. Also, the organization sets rates for advertisers. The incentive to join such an organization would be, I'd hope, the willingness of advertisers to shell out a lot more money to this relatively stable source of large numbers of eyeballs and the potential access to subscription revenue that newspapers have heretofore been unable to generate in any substantial amount.

To my mind, this approach has an advantage over the endowment approach proposed in the NYT editorial, (although they're not really competing approaches, they could co-exist). It leaves the market for news essentially free without leaving news writers beholden to those providing or overseeing their large endowments. Presumably, the number of newspapers in the endowment scenario would be very small and newspapers would no longer be free to continue editorializing in any way they see fit. If the newspapers don't t do something like this soon, we'll see it occur in a different way as newspapers will continue to die and news will end up being controlled by smaller and smaller groups of people. Eventually we'll reach a point that the need to assemble an organization of newspapers will be obviated by the fact that all the newspapers will be in de facto organizations in virtue of having the same owners, e.g., Rupert Murdoch. This ownership oligarchy will then be able to start implementing this plan but without the need to split revenues with competing interests (and editorial perspectives).

I think the model I'm proposing probably isn't that much different than the structure being utilized in cable television, except perhaps the advertising might be centralized more than it is on cable TV now. Note that people are now willing to pay much more for TV access than they used to be in exchange for access to a much larger and more diverse body of content. Is it naive to think that we could expect the same thing to happen with online "print" news if only the news organization would stop undercutting each other by giving their valuable content away for free?

1 comment:

Erik said...

"It leaves the market for news essentially free without leaving news writers beholden to those providing or overseeing their large endowments."

I'll need to digest more your thoughts on consolidating print media, but in the meantime I will say that I share your concern about the endowments model, for the reason you suggest above. I'm as you know conservative-libertarian leaning, but I'd be horrified at the prospect of opening the NYT or and wondering whether Maureen Dowd or Paul Krugman had anything in mind when writing other than their sincere ideas. The media is so important to a free society (I realize this is cliche), it merits our best efforts to ensure that reporting budgets are adequate and that writers are staffed.

As an off the cuff, I was wondering the other day whether we could purchase "newspaper cards" like, say, a Barnes and Noble card, that gave us a discount on print versions. The major media organizations (like NYT) could then save distribution costs by stocking print versions only in retail outlets. If we buy one everyday, we could get a discount. Of course, this ignores the romantic quality of getting the paper delivered with our morning coffee...