More bad news for news junkies: The press is the fastest shrinking industry in the United States. Advertising sales have halved since 2005. For every digital ad dollar earned, newspapers have lost $7 in print ads. Digital advertising is expected to surpass the combined advertising of newspapers and magazines combined. “There’s no doubt we’re going out of business now,” one executive was quoted as saying in this Financial Times article.
More newspapers are talking about charging subscriptions for access to their content., but so far the Wall Street Journal appears to be the only U.S. newspaper capable of generating meaningful revenue. In any case, charging for subscriptions would be a double-edged sword. Cutting off Web readers would reduce page impressions and Internet advertising revenue.
Here in Virginia, Landmark Communications has expressed an openness to selling its newspapers, which include the Virginian-Pilot and Roanoke Times (where I worked five years). Media General, which owns the Richmond Times-Dispatch as well as newspapers in Charlottesville, Lynchburg, Danville, Bristol and Manassas, is considering a divestiture of its newspaper properties. (See Peter G.’s article in Style Magazine.) Even the mighty Washington Post is suffering from eroding revenue and falling profit.
For the most part, newspapers are still profitable. But they are maintaining margins only by cutting expenses, including reporting staff. Even with a resumption in economic growth, there is no sign that the slide in revenue has bottomed out. Meanwhile, digital alternatives continue to proliferate.
I would not lament the passing of newspapers if I thought digital media were creating new business models for reporting and sifting the news. There is no lack of opinion and commentary, which Americans appear to be willing to publish in great quantities for free. But few digital outlooks are doing much real reporting, as opposed to repackaging news created by others. Politico and Huffington Post are exceptions, but it’s not clear to me that they have financially sustainable business models.
Our media future will provide more opinion, more commentary, more content creation by interested parties, more aggregators uncritically packaging that content, and possibly more reporting by enthusiastic amateurs untrained in the basics of journalism…. but less news reporting. It is frightening to think that in a world awash in information there will be less reporting by credible and financially disinterested entities than before.
— JAB
