Is the current economic crisis sparking the demise of print media as we know it? Some 28,000 journalism jobs in the United States were lost last year; the Tribune Co., publisher of the Los Angeles Times and the Chicago Tribune, has filed for bankruptcy, and the Seattle Post-Intelligencer will close or will follow in the footsteps of The Christian Science Monitor and The Detroit Free Press and go digital-only if no buyer for the 145-year-old title is found within 60 days.
Concern is now focusing on the future of The New York Times. "…as the industry gears up for an even worse year, even the New York Times has become the subject of panicked speculation," reports Paul Harris in today's The Observer. Like the rest of the US media, The New York Times suffers from reduced advertising and competition from the Internet at a time that the United States is weathering a deep recession. Writing in The Atlantic, Michael Hirshorn wonders whether the Times and journalism as such can survive the death of newsprint. He warns that America's paper of record may default on $400 billion in debt this May.
Crisis produces opportunity and that is true for the news business too. The struggle for survival is likely to be the catalyst for the media to do what it should have done 10 years ago: adapt to the paradigm shift produced by technological advance. In an industry in which print and distribution often accounts for 50% of total cost, going digital only makes perfect sense. It allows print media to reach out to a much broader local and global audience and to move to the forefront of technological advance and the change in reader preference involved. It would also fuel hardware manufacturers to advance screen technology as Amazon did with the Kindle and could force them to develop more affordable A3 printers for readers who would like to print the paper at home or in the office. In effect, the cost of print and distribution is shifted to the reader.
The print media have been slow to adapt to technology. With the exception of The Wall Street Journal, which successfully refused from the beginning to offer its content for free online, most newspapers initially thought all they needed to was put what is in the newspaper online for free and garner revenue from advertisement. The model failed. Like with the switch that many papers made from broadsheet to tabloid, newspapers failed to recognize that form dictates content. In addition, readers grew used to demanding free content, foiling attempts to move away from an advertisement-driven model to one in which readers pay for content. The current media industry crisis may enable papers to finally make that switch.
It may also force them to think creatively and come up with new models, products and market segmentation. A fountain of ideas is being developed by The Nieman Foundation's Nieman Reports. "Today's obsession with saving newspapers has meant that, for the most part, media companies have failed to plan adequately for tomorrow's digital future. The economic downturn has added to the urgent need for a change of direction," says Edward Roussel, digital editor of the Telegraph Media Group (TMG), in a Nieman Report entitled To Prepare for the Future, Skip the Present, in which he suggests 10 ways the media can make the paradigm shift, including: invest in premium content rather than trying to be everything to everyone, build alliances and networks to provide coverage of areas in which one's own capability is weak, adopt the 24/7 model instead of old media deadlines and have the guts to experiment.
Predicting that The New York Times if it goes digital only, may have to initially lay off 80 percent of its staff, many of whom would leave journalism, Hirshorn argues that there is a silver lining. "…over the long run, a world in which journalism is no longer weighed down by the need to fold an omnibus news product into a larger lifestyle-tastic package might turn out to be one in which actual reportage could make the case for why it matters, and why it might even be worth paying for. The best journalists will survive, and eventually thrive. Some will be snapped up by an expanding HuffPo (which is raising millions while its print competitors tank) and by the inevitable competitors that will spring up to imitate its business model, or even by smaller outlets, like Talking Points Memo, which have found that keeping their overhead low allows them to profit from high-quality journalism. And some will succeed as independent operators. Figures like Thomas Friedman, Paul Krugman, and Andrew Ross Sorkin (the editor of the DealBook business blog, which has been a cash cow for The Times) would be worth a great deal on the open market. For them and others, the bracing experience of becoming 'brands of one' could prove intoxicating, and perhaps more profitable than fighting as part of a union for an extra percentage-point raise in their next contract,@ Hirshorn writes.
For now, its uncharted waters. It all makes sense at first glance. Peter Preston, also writing in The Observer, points to the success of the four-year old Huffington Post: Eight million unique users, a 448% annual growth rate and awards showering down, a valuation of $100m. “Here's one sort of journalism that can shrug off recession, surely? Tina Brown with her ultra-competitive, somewhat derivative, Daily Beast is already turning a wheeze into a formula. And that formula - from Arianna Huffington to Lady Harry Evans - seems suitably promising. No more tons of newsprint and heavy lorries; no more futile costs. Here's the web standing proud and unencumbered, giving you the basic news you need in a neat, edited package that moves swiftly into blogged opinion. Huffington calls this her search for truth. Jaundiced readers of American newspapers would call it a long overdue reaction to too many po-faced balancing acts in monopoly papers afraid to express any opinion,” Preston says.
Yet, the picture is not all that rosy. The underlying figures do not support the perception of success? “A TNS Media Intelligence analysis quoted in Advertising Age last week puts Huffington Post revenue between January and August last year at a mere $302,000 or so. It's no secret that, at best, Huffington's enterprise was only occasionally profitable, in an election year during which US liberals flocked to the site,” Preston says, arguing that digital only news and opinion providers confront the same dilemma as traditional media: they can't turn what they have into worthwhile money.
A closer look at what the backbone is of the Huffington Post or The Daily Beast’s source list, which includes an impressive roll call of bloggers, remains far more conventionally: some 40 traditional mainstream newspapers and broadcasting stations. “Dig a little deeper among individual strands, moreover, and you wonder how on earth either Huff or Beast could get by without the Associated Press and New York Times. And there's the rub. The Huffington Post has around 50 staff, most of them technical and production hands. It would like more reporters of its own, of course, but (unlike Brown's Beast) doesn't attempt to pay its big bloggers a cent. Honor and glory stand in for a check. As CP Scott never said (in schoolboy parody): Comment is free, but facts are expensive,” Preston writes.