Sunday, January 27, 2019

are newspapers dead?

One of my favorite editorial cartoonists is a guy named Steve Benson. He became the editorial cartoonist for the Arizona Republican in 1980. He moved to the Tacoma Morning News in 1990, but returned to the Arizona Republic a year later. He won a Pulitzer Prize in 1993, and was nominated for the Pulitzer 4 more times after that.

Here is a sample of his work:

This week, he was laid off.

This week was scary for American media: About 1,000 people were laid off by major outlets, including Buzzfeed and the Huffington Post. Nearly 400 were let go from news giant Gannett alone. 

These people are editors, support staff, and writers—including at least one Pulitzer Prize finalist—who worked to report news stories, check facts, edit, and promote important content getting too little attention. In the age of Trump, this work is absolutely critical. 

In a way, guys like me are to blame for his departure. I read 5 (and sometimes 6) newspapers every day, but I only pay for 2. I pay $15 a month for the digital version of the New York Times, and I also pay more than $20 a month for the Arizona Republic, which gives me online access, as well as deliveries on Wednesday and Sunday. I also read the Washington Post, Al Jazeera, and the Daily Star (Tucson’s home town newspaper) but I don’t pay for any of the views from those sources  – and therein lies the problem.

Total circulation of daily newspapers peaked at 63 million in 1973, and has been going downhill ever since. By 2017, that number had dropped to almost exactly half, to 31 million. The reason for that decline is that more and more of us get our news from electronic sources, like Facebook. The New York Times was one of the first papers to notice the trend, and they started offering “digital only” subscriptions 8  years ago. The nation’ largest newspaper, The Wall Street Journal also started offering online subscriptions a short time later, and the Washington Post joined the movement in 2013.

Going electronic has been a smart move for newspapers, since it has allowed a large INCREASE in circulation. In 2017, the New York Times increased digital subscriptions of 42% over increases in 2016, and the Wall Street Journal experienced gains of 26%.

Newspapers make most of their money from advertising. The peak year for advertising revenue was 2006, when it reached $49,000,000. After that, it took a very steep dive, and by 2017, it had dropped to $16,000,000. Newspapers have made up for some of that lost revenue with digital advertising, since the percentage of advertising revenue from digital sources has risen from 15% in 2011 to 30% in 2017.

Since ad revenue from electronic sources is less than from conventional advertising, newspapers have had to make some very painful cuts. In 2006, the total number of newsroom employees peaked at 74,410. In 2017, that number was 39,210. Benson’s departure from the Arizona Republic happened just a few weeks after a columnist named Linda Chavez stopped appearing in the Opinion section.

Since newspapers seem to be such a losing business, why in the world would Jeff Bezos buy the Washington Post in 2013 for $250 million? Donald Graham, son of legendary publisher Katherine Graham had approached Bezos about buying the newspaper, even though he knew that Bezos knew very little about newspaper publishing. Bezos, however, DID have a mastery of the internet (which is why he is now the world’s wealthiest man).

In his own words, here’s Bezos’ explanation:

“It is the newspaper in the capital city of the most important country in the world. The Washington Post has an incredibly important role to play in this democracy. There’s no doubt in my mind about that.”

Bezos drew his optimism about the paper’s future from one simple fact. The internet destroyed most advantages newspapers had built. But it did offer “one gift: free global distribution.” 

With Bezos's help, The Post developed a new strategy to “take advantage of that gift.” They implemented a new business model. The old model relied on generating a high revenue per reader. Their new focus would forego revenue per reader in favor of acquiring more readers. In other words, a volume play.

Early signs of success indicated the strategy was working. The Washington Post was quick to post profitability and a growing newsroom. In fact, the Washington Post is about the ONLY newspaper that is ADDING to the number of people in the newsroom.

The Arizona Republic is owned by Gannett, the country’s largest newspaper chain. Between 2016 and 2017, the value of its stock decreased by 50%. It is surviving for exactly the same reason that the Washington Post is prospering – it is expanding its audience.

(To the chagrin of a lot of old white guys, the Gannett chain is being run by a 57 year old Jewish girl from New Jersey named Joanne Lipman, and the largest owner of the New York Times is a Mexican telecom entrepreneur named Carlos Slim, who was the world’s richest man from 2010 to 2013).

More than 200 years ago, Thomas Jefferson knew how important that newspapers were to a democracy. Given a choice between a government without newspapers, and newspapers without a government, he would choose the latter.

Not every newspaper can rely on wealthy benefactors like Jeff Bezos, so what can they do to survive and prosper? One idea that would seem to bear merit is one that was introduced by Democratic senator Benjamin Cardin in 2009. It was called the Newspaper Revitalization Act, and it would allow newspapers to become nonprofits if they chose to do so. Cardin’s bill did not pass in 2009, and it’s unlikely that it would get passed during the current administration – but it is still a good idea.

Newspapers play an extremely important role in our society. The Washington Post effectively brought an end to Nixon's presidency, and they will help do it again before 2020. My prediction is that it will happen sometime prior to August 9, the day that Richard Nixon resigned in 1974.

I’m optimistic about the future of newspapers. Their business plans will need to be very different from what they were in the past, but I’ll still be able to read the comics in the Sunday paper for a lot of years to come.

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