I wanted to write about the shutdown of newspapers weeks ago when the Rocky Mountain News published its last issue. I held off because I didn’t know how to give the story the right gravitas. In case you missed it, and you aren’t alone if you didn’t, there is a pretty big problem brewing.
Here’s the problem. Newspapers got themselves in a pickle. Their purpose in society was to provide information to the public so the rest of us could go out and do our daily work. You and I have to do these jobs and don’t have time to check in on the police blotter or the capital or the latest tragedy; newspaper reporters do that for us and we pay a very small price to get access to the information they found. A long time ago, readers of newspapers realized that if they could get a little blurb thrown in the paper, say they had a chicken to sell, they’d have an easier time selling the chicken rather than just walking up to every person on the street and asking them if they want a chicken. Some savvy business folks got on board and figured out if they bought some space in the newspaper, people would read that stuff too, and advertising was born.
So what’s the problem? The *money* newspapers make wasn’t connected with the *service* they were providing. Many people viewed this as a good thing from the *service provided* side of the coin. Proponents of a concept called “The Fourth Estate” were especially fond of the idea. The “fourth estate” is the concept that news media form the fourth check-and-balance of government watching over the Executive, Legislative, and Judicial branches and informing us, the citizens, if any of them got out of line. The theory was that as long as the reporters are free to work without being burdened with concerns for making money they’d be impartial. Everyone let slide the fact that newspapers, like any other business, must take in money in order to continue operations. It was easy to overlook the income needs because the newspapers were getting plenty of money from advertising.
But what if the advertising money went away? Then who would pay the bills so the reporters could keep focused on being a watchdog or snoop on the government and anything else deemed newsworthy? Why, the newspapers would have to shut down of course. And that pretty much catches us up to today.
The Rocky Mountain News shut down. It was a participant in a protracted newspaper war in Denver that drove subscription and advertising rates so low they still haven’t recovered. This happened years after a Joint Operating Agency agreement was put in place to call a truce between the Denver Post and the Rocky Mountain News.
The Seattle Post Intelligencer stopped printing a newspaper next, opting for an online only version. FYI, the SeattlePI was also in a Joint Operating Agency agreement with the Seattle Times until that agreement was severed; but the SeattlePI never recovered.
News on the street is that over 100 newspapers have shut down since January 2008 (see the aptly named PaperCuts.com for details). The current management operating procedure appears to be to (a) put business up for sale while (b) announcing you’ll board the joint up if nobody buys it in an arbitrary amount of time.
Now that the advertising has gone away and the newspapers that don’t just vanish are morphing into online editions. The unspoken assumption is that the online world is a place where advertising is lucrative enough and the costs low enough that the business will make money. Except no one is saying that out loud, perhaps because either (a) they realize they’d sound nuts if they did, and/or (b) they think its a big secret and want to keep the idea to themselves. What they are saying aloud is that the print editions of newspapers were not sustainable. At the SeattlePI, rough numbers indicate 160+ people made the paper go, and only 20 will remain to run the online only edition. What is missing from those numbers is how many people are involved in making the SeattlePI appear in a web browser? There is a lot of work involved in making a newspaper website run, and most of those jobs don’t have to happen from within the walls of the newspaper office. Server maintainers, network operators, advertising sales and click-stream analysts, database gurus, search engine optimizers, and (lest we forget why newspapers existed) content creators just to name a few. The sneaky bit that makes this all seems feasible is that many of those folks can be ‘distributed’. We used to call it “outsourced” but people became bored with that term and assumed it always had something to do with call centers overseas. Guess what? The people who used to print the newspaper have been outsourced; the concept is not just for customer service anymore.
Here’s the next wave of this problem. If advertising rates dried up in the print edition, what makes you think they won’t dry up in the online version too? The equivalent of a “full page ad” doesn’t exist, and the banner ad version (be it in-page, pop-up, pop-under or whatever you like) only generates pennies on the dollar compared to a print ad for the business displaying the ad. You can hear the execs now; “it’s OK, we’ll make it up on volume”. But can they really?
