Copyright 2009 Ben S. Pollock
The Internet is not killing the newspaper. The economy is.
This would be obvious as it’s stated in every halfway decent article on the print media, but the copy usually includes comments by people who seem to throw their hands out and cry, “Ach, die Web” (Japanese for “OMG, did U C that post on FacebookTwitterCNNdotCom?”). Thus increasingly when I’m at the barber, the park or the bookshop acquaintances ask if I have been laid off yet, then with sympathy they blame those durn computers. These two-minute chats are never the time to really explain, so I’d like to argue in Brick the ‘net plays a secondary role in today’s implosion of newspapers.
First, while this is a subject that fascinates news junkies and naturally my colleagues, others who want to think about the economy would be better off considering the auto industry, housing and banking. Their slow-mo collapse — it’s far from over — can ruin all of us. Heaping newspapers into society’s recycling bin doesn’t hold a pencil to these: We journalists sooner or later may find ourselves laid off, go on the dole for a while then get another job in another trade. Meanwhile, news that deserves distribution will sooner or later find a way to reach those who want the information. That is my optimistic conclusion: Newspapers won’t die, with or without us Watergate-inspired J-major boomers.
A few weeks ago, on the first warm Saturday — just before the month of rain — My Beloved and I stopped by a Lowe’s home improvement store. Its nursery was full of transplants still healthy as they hadn’t yet been neglected to wilting by clerks. The wing indeed the whole store was as empty of customers as the displays were full of tomato seedlings. Any previous season opener it would have been elbow-to-elbow, despite the fact that within two weeks there’d be another couple of frosts to kill anything you set out.
This wasn’t the only desolate place. Restaurants where we normally have to wait just a little (we don’t patronize places that are too busy; life is too short) have open tables even at high traffic hours. See the same number of people holding bags of fresh purchases at the mall as last season?
Whoa, baby, is that all?
These are among the places that advertise. To ease their budgets, they’re buying fewer ads or smaller ads or black-and-white not color ads, or they’re getting display ads and not glossy supplements. And so on. This leads to newspapers cutting pages, then cutting staff. Personnel comprises newspapers’ biggest capital outlay, Advertising takes care of payroll and profit to the owners. The piddly amount you pay monthly for home delivery — or the single copy you grab at the convenience store — basically pays for the ink and paper, and trucks and circulation crews. When the loud person says, “Such-and-such was on the front page just to sell newspapers,” do the math: A bad wreck or a just-caught politician would sell what, another 5,000 50-cent papers more than usual (a big number for my size city)? Whoa, baby, we made another $2,500. That figure won’t even get you all that big of an ad.
The Internet is a swarm of gnats for newspapers. They keep coming despite all the swatting, and they’re drawing blood but only at the ankles. Yes the Internet draws readers away, but in the generation before this one, 24/7 cable news channels comprised an earlier generation of biting gnats. There’s more rivals for Americans’ attention. If you have the newspaper addiction, thank you, but you can name old classmates who never picked up the habit of getting the daily paper from the driveway or doorstep as their parents and grandparents did.
The right thing to do in a hyperlinked essay is to point the reader to all the proof-texts about ad revenue and the history of circulation declines. Scan through Editor and Publisher. TV’s tanking, too, so channel-surf at Broadcasting & Cable.
Despite the domino effect of the overall economy slamming stores with the retailers cutting marketing costs before going after salesclerks and inventory, the return of advertising will provoke the return of print media. But it’s going to have to target a different audience. Media managers who hit the permanently smaller audience will make it, and those who either work to regain the old numbers or those who try to expand the 21st century audience where it won’t go will fail.
The Golden Rule of business
This conclusion comes from direct Golden Rule-based observation: I don’t click on Internet ads. Do you? Of course advertisers know this; that’s why ‘net ads are so cheap. They don’t work well. Print ads magically work better for some needs in some circumstances.
Unlike most journalists I have bought advertising as a small businessman. You need faith, remembering the Golden Rule, to buy ads.
The four partners who in 1998 owned Beaver Town Inn & Trading Post directed me to research advertising and buy just a little. I bought small display ads in the regional Active Years, now AY magazine, and the weekly What’s Up entertainment section of the local Demzette. Tom from the newspaper was up front, saying you can’t measure the success of ads you buy. It’s wholly impractical to ask customers why they came in that day, and it’s highly likely they couldn’t tell you why with any reliability, either. What seems to happen is your ad appears enough times that something strikes a bell and people come to your business or they happen to be driving buy and unconsciously Beaver Trading Post rings a bell, perhaps caused by the ad. That’s the faith: With halfway decent advertising, appropriately placed, and run often enough, store and inn sales go up. The young gal from the monthly just talked fast and smiled a lot with a heavily lipsticked mouth, yet I bought from her because I knew how deep the magazine penetrated our target.
The Golden Rule drives you to include advertising in your budget unless the economy is tanking, when you must pare anything not absolutely necessary, based on the habits of you and people you know. The rule directs you to recall ads moving you to check out some business that wouldn’t have occurred to you otherwise.
Thus, back to Square One. But Square One has been hacked at the corners by the Good Depression (the Great Depression was suffered by the Greatest Generation, and at best we’re just a Good Generation). The Depression is shrinking all (imagine that, all) newspapers, some to zero. The Internet is changing newspapers.
Time for lonely tumbleweeds
Our Good Depression is laying waste to any number of industries. Outside of the jobs we have and those of people we know, we sense the Depression most in retail because that’s how all of us get stuff we use. It’s hard to feel sorry for journalism when thousands of new car dealers, the flamboyant guys who’ve been in town since your dad was a teenager, are being shut out by automakers. In a few months, a number of the showrooms with all the pennants and noisy commercials are going to be striped asphalt deserts. Cue the tumbleweed wrangler.
But I’m writing about my segment of the economy. You just can’t say that 35 years of minuscule but accumulating circulation drops suddenly causes the newspapers in Detroit to cut from seven days a week to three. The shift comes from the main revenue source, ads. Stores don’t buy ads when it’s all they can do to keep the lights on.
Yet a down economy is precisely the reason for optimism for newspapers. The economy is cyclical. Not spring up boing-boing, but in the two-steps-forward-three-steps back manner that alternates with three-steps-forward-two-steps back. Those two dance steps also comprise how my life works.
As the economy stabilizes, people will want to buy the things they had been delaying and stores will want to tell them what they’ve got, by print, broadcast, the Web, coupons, billboards and costumed characters dancing on sidewalks.
Yes, I see a rosy picture, but it calls for pragmatism. Readers will be different and stay that way, and fewer of them, and stay that way. Unless there’s a calamity. By definition calamities are very rare.
Those newspapers that survive will have to admit the readers they get are just about all they’re getting, and not dwell either on how circulation used to be or on ways to bring back the old demographics. Short of longterm national tragedy where information is vital to literally survive, young readers aren’t coming back, until they get older and hunting for something to read.
Wall Street is Main Street
The emphasis by some papers on local local local will only drive educated young adults and their wallets away. National, world and business news must be emphasized as well. Some street widening has only momentary interest, even if it’s on their commute, as does the graffiti at the junior high, even if it’s their kid’s school. Our military’s presence in the world’s hot spots actually is local, as far as that person who went to college with someone whose kid was. … Wall Street is Main Street, when it comes to your rent or mortgage and the policy changes your credit card company sends you more frequently.
The solution, and there is a solution, is for newspapers to analyze their audience, not the audience they once had or could have if they tweak something, but the audience that right now is hanging on. And convey to them advertising that’s appropriate. Retailers will help papers with this. It will make for smaller newspapers, available both on paper and online like now. Advertising will pay for nearly all of the business, as before.
The consumer likely will not pay extra for routine news online. In the event of calamity, the reader just might fork it over for a while. The few publications who’ve long been charging for online access — there haven’t been many — should do fine, because they’ve set their standard among their current and potential readership. The rest may make matters worse levying the two kinds of fees proposed: Register with a credit card for an annual fee, or micropayments where one debits for each article. It’s not so much that people expect online news to be free but that they feel they already are paying for it — the DSL or cable bill. That revenue is not going to the producers of the news, but to the consumer it’s still money out for that purpose and, what do you know, roughly the same as a newspaper or magazine subscription.
Prying the paper from cold dead fingers
In other words: If news is overpriced, only pundits will read it. Not that different from the original, “If guns are outlawed, only outlaws will have guns.”
This has been proven. A couple of years ago The New York Times ended the wall it set where one had to pay to read its acclaimed columnists. It didn’t work. One reason is if you needed to hear what Tom Friedman or Maureen Dowd had to say, you could get it elsewhere. As The Onion parody news source put it early this month: “Between Rush Limbaugh and Sean Hannity, half of America gets The New York Times read to them for free every day.”
Newspapers have cost the reader next-to-nothing since before the Civil War: The Penny Press undercut the going price of a newspaper in 1833, 6 cents. The federal inflation calculator only goes back to 1913. It states that what cost 6 cents in 1913 costs $1.29 now and a penny in 1913 translates to 22 cents now. Estimate back 80 more years and when you see a newspaper at EZ Mart at 50 cents daily and 2 bucks Sunday you know that the charge remains “blow your nose” money.
Newspapers will adapt to a world where the Internet is a fixture in much the same way as it adapted to each new media technology of AM radio then broadcast TV then FM radio then cable TV — most of which seems free or nearly free. Newspaper managers will get this when the economy bounces up and advertising bounces back. If I’m facing a new job as overnight baker at Panera, then it can’t come too soon.
3 replies on “We’ve Met the Enemy. So What?”
As is true of everything else you’ve written, this is so very well thought out and stated. It very much challenges my assumptions.
I fear the situation is much more desperate than you suggest. Yes, newspapers have been in a long decline that precedes the rise of the Internet, and one may hope that journalism will continue and therefore its aggregators will survive.
But the Internet presents challenges unlike those already survived from TV, radio and so on. For one, the Internet hurts classified advertising, because online aggregation and search is better, faster, broader than local classifieds in print media. The Internet enables the combination of classifieds from print (online sources absorb print classifieds) but as people flock to eBay and craigslist or whatever, they stop placing local print classifieds in the first place. As I understand the business numbers, classifieds have basically been the profit margin of the newspaper industry during its long, slow fall. Everything else — advertising and circulation revenue, personnel and print costs — is a wash, a zero-sum game. These days, the plus side is much smaller, and the newspaper industry has lost its maneuvering room, if not its oxygen line.
As you have mentioned, though, it’s not so much the Internet itself as the already weakened condition of the patient that is the problem. Still, the new age also has changed the whole equation: the Internet means the consumer owns the production technology. “Newspapers” will move toward this consumer-held machinery because the single most expensive part of their continued operation is the printing press. And it is meant to carry information that can be gotten faster, fresher, more vividly (with images and sound) from other places.
As you say, advertisers don’t see results from this broad, fresh medium of the sort that they are used to from journalism’s customers of a slower time, and they don’t pay the same. It’s a vicious circle, because even when the economy rebounds and advertisers have disposable income again, newspapers won’t have the audience to be able to demand the rates they will need to generate the necessary income to keep polishing a product to attract enough readers to entice advertisers …
Something much different is going to have to arise, lest we start turning to something like the football bowl games: “The Tasty Catsup Neighborhood Times” or the “Stinkin’ Ale Smalltown News.” Unless readers decide they will pay “blow your nose” money for reports on the local street improvements or that they will support something along the lines of PBS for newspapers (print or digital), we’re going to find out what democracy is like in the dark.
We do agree, Bruce. You just cite particulars and I lean toward a global view, a generous way perhaps of saying maybe I prefer generalities.
I do say the Internet is drawing blood, but the drop in display advertising resembles bludgeoning. When the economy buoys up, there will be fewer readers, and not as attractive ones, forcing ad rates to drop. That is due to the Internet, a harder blow than those from TV, radio and movies in their corresponding days of novelty. My guess is that print newspaper ads will be for the proverbial brick-and-mortar retailers, while ads on the Web component of newspapers will be for online shopping and online services.
But I still don’t understand our business model, staying as I do on the buggy whip quality control end. You cited classified advertising. That apparently brings in less revenue than reader subscriptions or single buys. To win the Little Rock newspaper war of the 1980s ending in 1991, you’ll recall that one key strategy of publisher Walter Hussman was to make nearly all classified ads — those not for businesses — free. He has kept them free after 1991, to this day. Evidently, the readers hunting for garage sales then thumb through the rest of the paper and heed display advertising, the big profit. Second, the classified sections of large daily newspapers — Dallas and St. Louis sorts of places — are small, given their overall population, and shrunk long before eBay drove doughnuts across the level playing field.
Further, the suffix of the scary Craigslist is dot-org — nearly all of its online ads are free, free to place and free to read. The few Craig charges for, pays for the rest and makes him and his relatively few employees rather well off. (This just in.) Classified sales of beat-up furniture have great power but not profit. This might be an example of how the theoretical Gift Economy explains the Internet while the Market Economy runs stores you drive to. But that doesn’t explain much at all: The two dudes who created the universally popular but revenue-less Twitter must be close to having to sleep in their cars.