For newspapers, the trends are clear: circulation and advertising revenues are falling, newspaper readers are aging, debt service and production costs are rising, and stock prices are stuck in the basement. Neither giving away online newspapers nor partnering with Google or Yahoo to sell ads has made an appreciable difference. The bleak headlines did not subside in 2009 as more newspapers shuttered, including the
Rocky Mountain News
and the print version of the
Seattle Post-Intelligencer,
and with the threatened closing of many others, the
San Francisco Chronicle
among them. Declining revenues—newspaper ad dollars fell by nearly one-third between 2005 and 2008—a reflection of new competition. Bloggers increasingly offer a wealth of local information and links that lumbering newsrooms don’t know how to match. The changing competitive landscape is being felt at the Journalism School, Columbia University While the foremost employers of 2008’s graduating class continued to be newspapers and magazines, according to Ernest R. Sotomayor, assistant dean, career services, there has been a profound shift. Many students clamor to take online media courses, he responds via e-mail, and to learn “to shoot/edit video, create audio content, Flash graphics and packages, etc.” And “virtually all those” who went to work for newspapers or magazines are working on their online versions. Increasingly, said Nicholas Lemann, the school’s dean, “many of our students go into ‘print’ or ’broadcast’ jobs that are actually mainly Web jobs.” Web sites have become for them, he said, the new Ellis Island, their point of entry to journalism.
Looking back on the investment mistakes made by newspapers, it is not hard to understand the too-sweeping contempt that people like Jeff Jarvis or Marc Andreessen harbor for them. Take the New York Times Company, which, though rightly proud of its flagship newspaper, has made its economic predicament worse with a series of what-were-they-thinking? business decisions. In 1993, at a time when it should have been clear that newspaper growth would slow, the Times spent $1.1 billion to acquire the
Boston Globe.
Instead of investing in new media, the Times purchased small television stations, which they have since sold, and spent more than $100 million to acquire a 50 percent stake in the Discovery Civilization digital channel, with an audience so small Nielsen could not measure it, and which was eventually sold back to Discovery in 2006. Instead of making other digital investments or reducing its debt, the company spent $2 billion to buy back its own stock, whose value has plunged; and it spent more than $600 million on a new headquarters building, which has since been leased out to help meet debt payments. The Times did make some smart moves: it made one big digital purchase, About.corn, an online source of information and advice, which has been a modest success; and it invested to expand its national circulation and advertising base, which helped cushion the paper from a local advertising and circulation falloff.
For the past decade, most other newspaper publishers have proclaimed that one answer to their woes was to offer readers more local news coverage, yet too few invested in local newspapers. Even fewer newspapers vied to make their Web sites innovative.
The Internet democratizes knowledge, allowing us to fetch information from most newspapers, magazines, or books anywhere in the world. It provides choices. It is convenient; Google aggregates information so that it’s easy to access. It spreads newspaper stories all over the Web, multiplying the readership. It opens lines of communication to bloggers and readers with valuable information and provocative opinions. And it generates some advertising revenue. But it robs actual newspapers of readers, reduces newspaper advertising and circulation revenue, and makes information in the New York Times equal to information from anywhere. Digital news has another side effect: it allows newspaper owners to quantify which stories appeal to their readers. As Larry Page lamented, “The kinds of stories that generate page views”—a Britney Spears meltdown or a Jessica Simpon weight gain—“are not the kinds of stories reporters want to write,” or that he personally wants to read, “and that kind of makes it worse.”
We are racing through a revolution comparable to the one ushered in by Herr Gutenberg’s printing press in the fifteenth Century. The outcome is as unclear today as it was then. “During the wrenching transition to print, experiments were only revealed in retrospect to be turning points,” NYU professor Clay Shirky wrote on his blog. He continued:
The old stuff gets broken faster than the new stuff is put in its place. The importance of any given experiment isn’t apparent at the moment.... When someone demands to know how we are going to replace newspapers, they are really demanding to be told that we are not living through a revolution.... They are demanding to be told that the ancient social bargains aren’t in peril, that core institutions will be spared, that new methods of spreading information will improve previous practice rather than upending it. They are demanding to be lied to.... We’re collectively living through 1500, when it’s easier to see what’s broken than what will replace it.... Society doesn’t need newspapers. What we need is journalism.
Shirky is correct, I believe, that it’s vital to preserve journalism, but wrong about the unimportance of newspapers. By newspapers I don’t necessarily mean the printed papers we are accustomed to. I mean a product that offers readers a variety of news, including news they didn’t expect they would want or need. Maybe it’s a book review, or a recipe, or a description of pension padding by public workers, or the bonuses paid to investment bankers whose institution has received a federal bailout. Maybe it’s a report on the appointment of a finance minister in a country that’s going to be vital next year. A good online or print newspaper should be like a supermarket, with a variety of choices. No one is forcing readers to pull items down from shelves. But they ought to have available to them all the information they need to be well-rounded, informed citizens of a democracy Even a not very good newspaper—and most are not very good—broadens the horizons of its readers.
By newspapers, I also mean something often neglected by those who have a better understanding of technology than of journalism. While good journalism can be practiced by individuals—think Upton Sinclair or I. F. Stone—it is often a collaborative effort, the result of teamwork rather than solitary labor. Story ideas are kicked around in a newsroom. A journalist reports a story and phones the editor, who makes suggestions and prods the reporter to probe various angles and seek different interviews. When the story is completed it is transmitted to the editor, who usually asks: “Are you sure about this fact? Who’s your source for this anonymous quote? Have you got a second source on that? There was a report in X newspaper that drew the opposite conclusion. You buried your lede—the heart of your story is in paragraph ten. Did you talk to Y? This story needs more context.” On a big story, other editors will weigh in. This is not meant to disparage bloggers or other independent voices or experts. It is meant to say that the offhand dismissal of journalistic organizations—which is a cousin of the belief that a computer can assemble news without editors—will diminish the thoughtful journalism a democracy requires.
I asked Marc Andreessen, as I did others, to make believe he was the publisher of a newspaper. “What would you do?” The answer he shot back at me was a common one: “Sell it!” The problem with this strategy, as the
Rocky Mountain News
and other papers have discovered, is that there are no buyers. And those wealthy buyers who might be tempted to splurge for a newspaper trophy, the way their peers buy sports teams, risk looking like fools, not saviors, like Sam Zell at the now bankrupt Tribune Company.
Pressed further, Andreessen said he’d rush to put the newspaper online and move away from the print edition, as a handful of papers have already done. There are at least two vulnerabilities to this approach, as Andreessen recognized. First, because online newspaper ads today generate no more than 10 percent of what a print ad does, the paper really would be, as Mel Karmazin said, trading dollars for digital dimes. Second, public corporations are dependent on investors, and not many folks will invest in a declining asset. So the market value of newspapers will continue to fall, depriving them of the capital to invest in reporting and, in too many cases, the money to meet debt obligations. It may be true, as Rupert Murdoch’s News Corporation’s newspaper retreat concluded, that in another ten years online news will generate enough income to save the paper. The quandary is how to get through the next ten years. As Murdoch conceded, more than a few papers “will disappear,” either consolidating with others or collapsing. Some of these newspapers are mediocre outposts of former monopolies and will not be mourned. But many are valuable civic institutions that cannot easily be replicated.
Any number of ideas have been advanced to rescue newspapers and journalism. Newspapers are belatedly striving to make online editions more interactive and to better conform to a Web sensibility. Michael Hirschorn wrote a provocative media column for
The Atlantic Monthly
and took a stab at defining a Web sensibility. He wrote that newspapers should take some of their star reporters—he mentions Kelefa Sanneh, the pop music critic for the
Times,
and Dana Priest, the national security reporter for the Washington
Post-and
encourage them to create “an interactive online universe,” inviting others to share their information, views, or news tips. “Gaming this out in the most baldly capitalistic fashion,” he wrote, “the papers then stand a chance of transforming one Sanneh review (one impression) into the organic back-and-forth of social media (1,000 impressions).”
Newspapers are also experimenting with reducing costs by outsourcing functions to online ventures—investigative reporting to former
Wall Street Journal
managing editor Paul Steiger’s foundation-funded ProPublica; or international reporting to
GlobalPost,
a privately financed organization whose news operation is supervised by former
Boston Globe
foreign correspondent Charles Sennott, and which pays seventy correspondents in fifty-three countries one thousand dollars for four dispatches a month and gives them part ownership of the enterprise. Bloomberg has proposed that newspapers could outsource their business coverage to them; dozens of newspapers have ceded much of their national political and government coverage to the hundred reporters who work for
Politico.
Another form of outsourcing is for papers to share articles and photographs; this approach is being tried by a consortium of the New York
Daily News, Buffalo News, Times Union
of Albany, and New Jersey’s
Star-Ledger
and
The Record.
It has also been proposed that newspapers could be saved by acts of philanthropic generosity similar to the Poynter Institute’s ownership of the
St. Petersburg Times;
or by injecting new revenues into newspapers (Yahoo has had some success in selling ads for a group of about eight hundred newspapers); or by various governmental actions, from relaxing regulations to tax breaks to advertising subsidies (as France did starting in early 2009) to—a really bad idea—direct subsidies.
While any of these Band-Aids might help slow the bleeding, two things are essential if print or online newspapers are to have a shot at survival. First, newspapers have to stop acting like victims, bemoaning their fate and clinging to the past. To blame Google is to prescribe a cure for the wrong illness. Second, they have to go on the offense by trying new things, including trying to charge for their content.
I was smacked in the face with this realization when my friend Kenneth Lerer, who started the
Huffington Post
with Arianna Huffington, mentioned in the summer of 2008 that he had hired a single twentysomething employee to launch its local Chicago online edition. The Web site, like Google, was free and offered links to stories in the
Chicago Tribune, Chicago Daily Herald,
and other local papers and Web sites. Aside from inviting citizens to blog, this local online “newspaper” was little more than a collection of links to work done by others. Lerer said there was promotional value for content providers like the
Tribune.
True. He said the more page views their content got the more advertising they’d sell. True. He said that “citizen journalists” often provide valuable information. True. But at a time when most newspapers proclaim local news as their potential salvation, these papers were suicidally supplying the
Huffington
Post with their own murder weapon. By 2009, the
Huffington
Post was discussing similar local editions in as many as fifty cities.
What to do? Eric Schmidt once told me that he thought “Apple’s iTunes is a great example of compromise” between old and new media and, of course, users pay for their music there. “Google,” Schmidt continued, “has not found the iTunes” model—yet. And unlike music and other forms of entertainment, few will keep replaying a newspaper story on their iPod. Andrew B. Lippman, the associate director and senior research scientist at the Media Lab at MIT, wonders whether the example of ASCAP, the organization that has channeled copyright payments to musicians since 1914, might be a way “for newspaper companies to share revenues.” Newspapers and Google have to keep looking.
Even if they locate the right model, the technical challenge is daunting. “Can you put it behind a wall and charge for access? Yes,” said Andreessen, who despite his criticism of traditional media still subscribes to the print edition of the
New York Times
and owns some eight thousand books and six thousand CDs. “Can someone still take that content, copy it and mail it to friends? Sure. Can somebody post it on a Web site in Russia and provide it for free? Sure. Can you get the Russian government to crack down on that? You can try. Can somebody put up every copy of the
New York Times
ever published on BitTorrent and make it available in a single pirated download? Sure. You can’t stop it. It’s bits. If anybody can see it, then there is going to be a way for everybody to see it.”