Newspapers Continue Their Rapid Decent
- By Michael Stillman
If you want read the rest of this Wall Street Journal article, you'll have to pay for a subscription.
By Michael Stillman
Circulation at America's newspapers took another huge hit during the last quarter of 2009 and the first quarter of 2010. According to figures released by the Audit Bureau of Circulations, the premier organization for tracking such things, average weekday sales at all newspapers declined 8.7% on a year-to-year basis, while Sunday readership declined by 6.5% Some tried to paint a happy face on this news by pointing out that this was actually less of a decline than last year, when weekday circulation tumbled 10.6%, Sunday circulation 7.5%. The difference hardly matters. This is a rate of decline barely better than freefall, and most newspapers are locked into a business model that is no longer sustainable. The fat lady is practicing her scales.
Of the top 25 U.S. newspapers, 24 experienced declines in circulation. Only the Wall Street Journal saw an increase, albeit very small (0.5%). More about its case later. The San Francisco Chronicle, on a death-watch for several years, was hammered the worst - weekday down 22.7%. However, many major names in the business also took hits nearly as bad. U.S.A. Today dropped 13.6%, the Washington Post 13.1%, the New York Times 8.5%. Weekday circulation at the Los Angeles Times dropped 14.7%, the Chicago Sun Times 13.9%.
Several newspapers attributed at least part of their declines to attempts to shore up their balance sheets. Several large papers instituted major increases in the newsstand price. However, it would appear that much of their gains were eaten up by circulation declines, and more importantly, advertising rates are based on circulation figures. Those, too, will have to fall. Short term relief will likely lead to even greater long-term stress.
One positive noted by many newspapers is that their websites have been seeing increased traffic. Indeed, it seems almost a foregone conclusion that newspapers will have to migrate to the web or die. They will not survive as print media, but perhaps may as electronic media. James Tyree, publisher and part of a team that recently bought Chicago's Sun Times (-13.9%) was recently quoted as saying newspapers still have 10 good years left. My guess is some may, but that there are plenty which will fold, at least as print media, long before then. One of these days, we will for the first time see some major city lose its last newspaper, and after that, to paraphrase King Louis XV, will come the deluge.
Tyree also stated that newspapers need to evolve into something else within, perhaps, five years, so as to be able to make the transition out of print. At this point, the only alternative that appears to be being actively pursued is websites. Naturally, there are no printing and delivery costs associated with online editions. However, there is no circulation revenue either. It also is not clear whether their online sites will provide the advertising effectiveness, or bring in the advertising revenue, of print editions. The potential reach of online editions is much greater, but potential is not a synonym for actual. Meanwhile, they may have to compete as equals against competitors from all over the world for national and international news, and other local sites, such as television station websites, for local news. The virtual monopoly on news that their circulation/delivery base gave them as print editions will disappear in the thin air of the web.
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Newspapers Continue Their Rapid Decent
- By Michael Stillman
If you want read the rest of this Wall Street Journal article, you'll have to pay for a subscription.
Readers on this site may wonder whether this doomsday scenario is facing the book world as well. The situations are not identical, but as print media, the answer is probably more or less "yes." News is now being delivered to computer screens online. People have become used to obtaining information this way for a decade, so the process is more advanced. Books are more likely to be downloaded to electronic readers, something new to the market, so the migration to electronic is still in its infancy. Nonetheless, that migration appears almost as inevitable for books as for newspapers, even if it will take longer.
Authors and publishers also have another advantage over newspaper publishers. People have become accustomed to getting news online free. There is no such expectation with books, at least not yet, and if publishers don't so overcharge for their wares as to create a secondary market for file sharing, as the music industry did, they may be able to hold onto this advantage.
Getting back to newspapers, can they survive on the online free model, to which they now seem locked in? No one really knows. If they do survive, can they support the type of news staff they did as print media, or will the number/quality of reporters decline? Will newsmen be replaced with bloggers, long on opinion, short on facts?
One voice is holding out for a paid model for online news, a model that was tried early on and abandoned for lack of readership. That takes us to the one paper with an increase in circulation, and its controversial publisher. Rupert Murdoch firmly believes newspapers must charge for their online editions, a policy he has instituted with his publications. The Wall Street Journal, despite the ABC report, had a decline in print circulation too. However, the auditing service allowed the Wall Street Journal to include online subscribers to their circulation figures since their online subscriptions are paid. This provided their slim gain. Whether many people will pay for online subscriptions remains to be seen. Murdoch is probably right that they will if free content is not available, but first he may need to convince his competitors to charge as well. It is unlikely people will pay for news so long as they can get it elsewhere for free.
Murdoch faces a tough battle converting a world of free content to paid. However, television, once free when delivered over the air, has become a paid service when delivered through cable and satellite. The dreaded idea of "pay TV," a coin box attached to our television sets, never came to pass, and yet, in effect, most people now subscribe to a form of pay TV, despite the existence of free over-the-air television. More choices proved to be the key. Whatever one thinks of Rupert Murdoch, and his plans for news delivery, one should not underestimate his prescience as a businessman. After all, who would have thought Americans would rather get their news from a Glenn Beck than an Edward R. Murrow? Answer: Rupert Murdoch.
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