Dead dead trees

Pushed over the edge by the slump, the American newspaper industry is going the way of buggy whips. But while we know what replaced horse-drawn conveyances, there’s no agreement on what is going to take over from the hunk of highly processed dead tree that lands on our doorsteps each morning, or, more accurately, how, and if, the contents are going to be produced when the traditional container ceases to be viable.

This is not a good time to be a producer of those contents.  Denver’s Rock Mountain News closed last month. Hearst is expected to close The Seattle Post-Intelligencer any day.  Tribune Co., publisher of the Chicago Tribune, the Los Angeles Times and the Baltimore Sun, is in bankruptcy, along with the Minneapolis Star-Tribune and the Philadelphia Inquirer. The McClatchy chain, whose titles include the Miami Herald and the Kansas City Star, is slashing payrolls.

The New York Times, perhaps the strongest brand in the business, saw ad revenues plummet 12 per cent last year and is battling to make a debt payment due in May. It has sold its smart new headquarters under a leaseback deal to raise $220 million and, according to the Washington Post’s media correspondent, Howard Kurtz, is borrowing $250 million from a Mexican billionaire it only recently described as having a “robber baron” reputation.

It’s not that people aren’t reading the Times. In fact, its content has a larger readership than at any other time in history. It sold 1.03 million newspapers every weekday last year, and 1.45 million on Sundays, only slightly down on 2007 (1.06 million and 1.52 million respectively).  As for unique visits to NYTimes.com, they reached an average of 19.5 million a month up from 14.7 million in 2007.

These numbers don’t support the widespread belief that the Times and other papers have committed hari-kiri by putting their content on the web for free.  The decline in print circulation, the Times says,  was  “primarily due to managed reductions in sponsored third party sales as part of our circulation strategy”, not cannibalization by its website – which in fact made a positive contribution to its bottom line. Ad revenue from the website posted a healthy 8.7 per cent gain. Without it, the Times overall ad revenue would have been down 16.7 per cent, not 12 per cent.

To be sure, newspaper readership is declining nationwide and more people are turning to the web for their news. According to the Pew Research Centre, 39 per cent of adult Americans said yes in 2008 when asked “did you read a newspaper yesterday?”, down from 43 per cent in 2007, while the proportion who said they got their news from newspaper websites rose 9 per cent to 14 per cent.  The real story, though, emerges when you break the numbers out by generation.  The print/web split narrows to 21 per cent to 18 per cent for people born after 1965, and to 16 per cent versus 14 percent for people born after 1977.

In the US, the younger you are the more likely you are to get your news from the net, assuming you’re interested in news. But chances are you’re not, especially if the news purveyed by traditional news organizations.  On or offline, it matters not. Fewer and fewer Americans under 42 are getting news from newspapers or their websites. Journalism’s traditional economic model is broken and it is not simply because newspapers have been giving away their product for free.

Debate rages about the next model.  In the current recession-accelerated shakeout, a number of US papers are starting to go web-only. The venerable Christian Science Monitor has taken this route.  The Seattle Post Intelligencer may follow. Others like the Detroit Free Press are no longer publishing daily while boosting their web presence. The Huffington Post, a blogging conglomerate that breaks news, is proving viable. This is all to the good. If it is to continue performing its essential function, the Fourth Estate has to abandon its hopelessly inefficient delivery system and attendant carbon footprint.   It’s time, in the US at least, for newspapers to stop sucking scarce ad revenue from their websites.

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