[This Thursday re-run first appeared August 14, 2009]
If there is one topic that professional journalists just love to report on and analyze, it is the troubles of traditional newspapers. They’re in very bad shape, we are told, and if something is not done these vital institutions might just go away, obviously taking our civilization along with them. There are even pundits who quietly suggest that government subsidies are in order.
What is most weird about this (spectacularly self-serving) sort of commentary is that it often actually understates the economic problems that newspapers face. Some papers may stagger on for a few more years or even a decade or two, but make no mistake, this patient is terminal.
Imagine, if you will, that newspapers didn’t exist. Now imagine somebody came to you with an exciting new business idea. His plan is to print the news of the day on paper overnight in massive printing plants and distribute copies to driveways in the wee hours throughout the region using a network of motorized vehicles. This operation would be paid for mostly by selling advertizing, but he would also have to charge about a dollar a day to readers.
You would tell this person he was crazy.
And yet, apparently, many of the people who run and work at newspapers seem to be in denial of the basic fact that the printing of yesterday’s news on paper is an activity that has simply been overtaken by technology. It reminds me of the efforts of Kodak’s management to adapt to the challenge of digital photography. Some things you don’t adapt to. They just obliterate your reason for being.
Obviously, it’s the internet that is killing newspapers. There is much hand-wringing over the competition faced by old-style printed news from free web sites, many of them run by the same newspapers that are being killed. Why would anybody pay for a copy of the New York Times when they can read it on-line for free and sometimes a day earlier?
Partly, this is a misunderstanding of how the internet is doing the papers in. It’s not NYT.com or CNN.com that killed your local daily, it was eBay, Craigslist, Monster.com, Realtor.com, and a hundred other sites that cooked the local advertizing golden goose.
Moreover, there seems to be a widespread unwillingness on the part of the media punditry to confront the economics of on-line news. Much discussion and some efforts are spent on trying to get the free news genie back in the bottle, as if giving it away were some kind of ill-advised experiment that got out of control.
Yes, history has shown that people will pay a modest fee for news if they have no other choice. But that’s true about a lot of things. It doesn’t mean that it makes any sense to charge for it or that not charging for it is unsustainable.
A few weeks ago Brett Arends in the Wall Street Journal ran a column about the trouble the New York Times was in. Amongst the challenges was that although their currently free websites (principally NYT.com, Boston.com and About.com) were doing well, they generated "just" $300 million or so a year in advertizing revenue. Clearly, Arends and many others argue, they need to find a way to charge the on-line readers.
But how could it possibly cost more than $300M to run those websites, including producing the content? Pay 1,000 reporters $100,000 a year and you’ve only burned through a third of the revenues.
The answer is that the people who urge the Times et al. to start charging for on-line access are arguing, perhaps unconsciously, for on-line to subsidize the paper infrastructure.
And it’s quite an infrastructure. The New York Times corporation employs 9,346 people. How many of those do you suppose are writers, editors, or even advertizing salesmen? And payroll is less than a quarter of operating costs. Besides numerous printing plants, the Times owns a vast fleet of delivery trucks and interests in paper factories in Maine and Canada. This is a considerable industrial enterprise. And it’s an enterprise focused on the manufacture and distribution of a product we just don’t need any more.
Speaking as a member of the long-term structurally unemployed, I have authentic sympathy for the printers, drivers, newsstand vendors, and even lumberjacks whose jobs are in peril. But the inevitability of shutting down the industrial infrastructure of newspapers is not a threat to our civilization.
[Photo: LuigiNovi – Nightscream]