Media Watch

Fella said, "Cheer up, things could be worse." He was right.

Why the newspaper industry is on "the slippery slope"

What's different about this recession for the hallowed inky trade?

By Walter Brooks, Editor, CapeCodTODAY.com

Nobody noticed it when the good times were rolling, but the business model upon which the daily newspaper business is based simply does not work any longer, and it hasn't worked for a couple decades.

Here's why.

Over the last half century, after every recession, the newspaper industry uniquely recovered all it had lost. After each past recession, classified, auto and real estate ads came back to the daily press.

That's why the Fidelity Investment Company bought a couple hundred of New England weeklies and a half dozen dailies starting in the 1990s, calling their group the Community Newspaper Company, which is now owned by GateHouse Media and has eight mastheads on Cape Cod and the Islands.

Newspapers were a business Fidelity assumed was guaranteed to bounce back, and many if not most newspapers made over 30 percent. But after the last recession in 2001-2003 it didn't bounce back, and since then those three major revenue streams have all moved to the Internet.

Worse, publishers didn't notice that since around 1950, the newspaper industry's revenues growth no longer matched the population growth of our country.

There were 76 million Americans in 1900 and 276 million in 1999, almost 200 million more citizens during the last century, but daily newspaper circulations has lost nearly 20 percent of its total in only the last 16 years while the population soared.

Here are the reasons newspapers died

Until 1930 there was one dominant media in America:  newspapers.

A business either advertised in the local newspaper or printed up posters to paste around his town on walls. Newspapers garnered 94 percent of all the money spent in America to reach consumers, and 84 percent of all Americans read a daily newspaper in that decade.

Today, three generations later, only 17 percent of Americans under the age of 40 read a daily newspaper, and the industry garners less than 15 percent of all ad dollars. That's an astronomic market share loss.

Enter radio, television and cable

The first new medium, Radio, was born in the 1920s, and by the 1930s had grown into several major networks which all offered news every hour. Some more consumers decided that even this modest news coverage was all they needed, and they too stopped reading a daily newspaper.

After World War II the same thing happened again when television became a part of every American's life. TV offered an hour of news every night, and another big chunk of newspaper readers and revenue fell away

Indifference, inertia & drift

The newspaper industry pretty much ignored these two new, upstart media, but cable television really hurt with its 24-hour news cycle by CNN and its ilk in the 1980s. Now Americans could get a half hour of news whenever they wanted it, and like radio and television, it was free.

Then came the Internet.

Newspapers realized that this new medium was sort of like what they did, so soon every newspaper had a Web site, and almost always it was one which was useless to and disdained by the audience they hoped to reach with the Web.

The newspapers used "shovelware": literally uploading or shoveling bits of the same news they hoped consumers would also either subscribe to or buy on a newsstand.

But why would they? Again, another huge chunk of the population stopped buying a usual daily newspaper because they could get much of the same news on the online version free.

Worse, most of the old men in suits at the top didn't "use the Web" themselves, and hadn't a clue as to whether the people they hired to create and run their newspaper sites were doing anything which people under 40 would be attracted to in this new medium.

But there is another more basic reason that newspapers are dinosaurs. To illustrate it, here are two model, the first of your average daily newspaper today.

The print newspaper model;

• On Day One, a reporter is assigned to, and covers a story for the next day's edition.
• By late afternoon, he or she has written the story, a photographer or artist has added photos or art, and it goes to a copy editor.
• After editing, the story eventually gets to the production department which turns it into a printing plate and it goes to the press room.
• The presses roll around midnight.
• On Day Two, the thousands of bundled newspapers, with ad flyers and pre-prints collated into them, goes out on dozens or hundreds of trucks to carrier people waiting.
• By 3 a.m.,  most  carriers have yesterday's news and start delivery (see drawing on right).
• At 6 a.m., yesterday's news is thrown on my driveway.
• Around 8 a.m., I pick it up and read news the same story I saw on CNN 18 hours ago and read updated online this morning along with everything else which happened since..
  

Here's the Web model for an Online Newssite:

• On Day One, a reporter is assigned and covers a story with his own digital camera.
• By late afternoon, he or she has written the story, photoshopped the photos, uploaded it himself on the online news site he works for, and than even adds a headline on the news site's homepage. That's what this 78 year old journalist did with this story.
  
• I can read it 18 hours before it's in a printed newspaper.

The cost of doing it the Web way is a tiny fraction of the Old Media way, and no young and active consumers are reading the newspaper version anyway.