Despite newspaper share prices seeing a 380% increasein the last year, don’t be swayed by the perceived recovery. The only way for newspapers to survive is by investing resources into innovation online.
Experiments are needed that not only challenge and test the behaviors of news consumption with digital and interactive forms of storytelling, but perhaps more importantly, business models are needed that are not limited to a silver-bullet hope that building a wall around their content will save them. With the exception of the few, the chances of pay walls generating revenue from readers who have grown accustomed to free content online are grim. Newspaper companies that continue to treat their websites as a dumping ground for news from their print product will meet their eventual demise.
While many in the industry were hoping the decline in ads was cyclical, the ad rebound has skipped newspapers. As Alan Mutter reported last week, ad spending on newspapers was down 9.7% (magazines were down as well), while Internet
ad spending had increased 7.5%, as did TV (up 10.5%) and radio ads (up 6%). The future doesn’t look any better for print, with Internet ad revenue set to overtake newspapers by 2014 or possibly sooner.
A Failure to Innovate and Reach A New Audience
The Economist recently featured a story that highlights the newspaper industry’s ability to adapt and survive. That ability has unfortunately not been borne from innovation, but rather from cutbacks and trimming — American daily newspapers have lost 13,500 journalists since 2007, reports the American Society of News Editors. Though the decline slowed in recent years, online staff haven’t been spared either, and the result is fewer resources to cover the news.And when it isn’t the bodies that are being cut, then it certainly is their pay. Print and online advertising has dropped for newspapers by 35% since the first quarter of 2008, according to the Newspaper Association of America. On top of the pay cuts, survival has come from slashing the number of words in the paper or printing fewer pages or slimming down the size of the paper itself — all to reduce costs. This trimming will eventually result in the extinction of these papers, forcing publishers to pay more attention to the web. Instead of being on the defensive, newspapers need to take strategic risks; getting comfortable every time print ad revenue makes slight recoveries isn’t exactly strategic.
The problem lies not in a stubbornness to evolve and recognize value in digital media, but a lack of resources. As a result of cutting, newspapers now have fewer resources to take advantage of new opportunities, such as that of mobile distribution on smartphones and their content walled-off from the web, and some are concluding that the best application on the iPad is the browser itself.
Admittedly, things do appear to be gaining traction for some newspaper companies who are experimenting with these tools, such as The New York Times’ recent release of The Scoop iPhone application, which integrates location-based features to provide a guide and service beyond content distribution for New York City residents (Disclosure: I previously worked at The New York Times). But smaller, local newspapers don’t have the resources that the Times does to create such applications. For them, experimenting with new distribution channels is difficult or infeasible.
There’s also the issue of a shrinking audience, which doesn’t help the grim advertising numbers. Of course, it doesn’t apply to all markets — in Japan the newspaper is still the main game in town when it comes to news, for example — but in most places, the average audience age is 50 and older and already declining. Youngerpeople are still reading, but they’re consuming information in new ways, sometimes through social media sites.
The New York Times’s David Carr’s words on the subject are perhaps the most telling, “Newspapers executives generally speak about a lack of visibility going forward, but as the picture becomes clearer, it also seems to be becoming darker.”
Impending Death of “Blogger vs. Journalist”
With a combination of downsized newsrooms and the new-found value in curation, newspapers are starting to curate more news to account for losses in resources. This brings up the question of how the gap of reduced news coverage will be filled. Poynter’s Rick Edmonds said in October that newspapers have created a $1.6 billion deficit in news coverage versus just three years ago. But that is assuming that only traditional/print journalists can fill that gap, and that the great divide and distinction between journalist and blogger is as clear as ever. But it’s not.The two roles and distinctions are merging and eventually we may no longer see the shallow and stereotypical references of bloggers who sit in their basements and write about what they had for breakfast. The truth is more bloggers are going out and doing original reporting, while traditional journalists are beginning to see the value in curation and are blogging themselves, though probably not from their mother’s basements.
Michele McLellan, a fellow at the Reynolds Journalism Institute and an expert on trends in community journalism, said that journalists displaced from newspapers are often starting their own blogs to cover news in their community through reporting and curation, while more bloggers at news startups are starting to integrate professional reporting standards in their work. She recently wrote about Oakland Local as one such example that mixes community building and professional reporting.
Content Creation From ‘Sprouts’
Of course, to truly fill the gaps of lost coverage, it will take time. It isn’t going to happen overnight. Perhaps a good analogy is to think of it like a forest, McLellan said. The tall trees are old journalism (newspapers), which will eventually wither and die. But slowly all around us, we’re beginning to see “sprouts” that are quickly growing and starting to get more light (as the tall trees wither around them). That light is coming from recognition that the work they are doing is important and valuable.Some of this is at the local level from civic groups who want to figure out how to support news coverage, McLellan said. It also doesn’t hurt to point out that they are also being recognized by journalists, such as the Pulitzer Prize being awarded to an online-only publication for the first time, and Edward R. Murrow Awards being given out to recognize excellence in online journalism. Many efforts won’t be impressive at first, and some may not even survive. But some will, McLellan said. She’s keeping track of some of these initiatives with a list of local news startups. And of course, in many ways success is less dependent on trained journalists who break great stories, and more on finding a business model that can support the work.
Learning From News Startups
Despite new media companies and technologies filling some of the gaps created by downsized newspapers, the problem of funding innovation and the work of journalists is persistent. We’ve seen many great examples of innovative ways of producing and displaying content, or calls to enlist the audience more deeply into the process. But what about innovative ideas in producing revenue? Perhaps there are creative ideas that traditional newspapers can gather from online news startups, such as the Real Time Ads model from nonprofit news startup Minnpost.com and recent Knight News Challenge Winner NowSpots, but it is difficult to know whether such ventures will scale and whether advertisers will be interested.“I think it’s scalable,” said Karl Pearson-Cater, director of operations at Minnpost.com, a nonprofit news startup in Minnesota.
He told me that businesses have responded well, specifically to buying real-time ads on targeted, niche portions of the site. The idea is simple, Pearson-Cater said, small businesses in the community were already marketing themselves using social media, and so this was meeting them halfway. They could buy ad space in the form of widgets that pull an RSS feed from their Twitter
, Facebook or blog.
The site launched Real Time Ads a year ago as a side project and sells the widgets for a flat weekly fee, a method popular with blogs for years, rather than the traditional standard of charging per one thousand impressions served to readers. On their Book Club Club blog, it was sold for $3,000 a year for the top spot and $1,000 a year for the one below it, for example. Pearson-Cater eventually wants to enable other publishers to use the platform, but needs to make sure it actually makes money.
“No one’s gonna use it if it doesn’t make money,” Pearson-Cater said. “With anything, the goal is always to create a sustainable model that supports journalism.”
It certainly will be an interesting experiment to watch, but may result as simply a small piece of a big pie that is quickly becoming depleted.
Funding Innovation and Journalism
Some worry that there simply needs to be more funding to support innovative ideas in journalism and for newspapers that are struggling, which then have the potential to eventually solve the looming revenue problem. Josh Stearns, the program manager at Free Press, a media reform nonprofit, is one of those people. He said the Knight Foundation’s funding of innovation is great, but that journalism needs a bigger fund, something like the NSF. People have great ideas for journalism, but aren’t able to fund them, he said.“There needs to be more federal funding or a combination of multiple foundations supporting a bigger fund. We’re not fostering innovation by talking about it.”
Journalism is a profession that is a service to society, and most that decide to fulfill that service are not doing it to get rich. Perhaps in the golden age of newspapers they were, but with the changes to technology and social media, the barrier to entry to being a writer is almost non-existent and the former audience is now contributing to that service as well, and without complaint.
The reality is that newspapers are still a valuable resource to communities that do not have access to the Internet, a reason that prompted the San Francisco Public Press to publish a print edition. But sooner or later, the costs of printing a paper will outweigh the tangible benefit and more newspapers will take the plunge into online, exploring the murky waters that news startups are getting their feet wet in now. Whatever the result, news will and is being produced, it just may look and feel different while this revolution takes place.
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