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Can Newspapers Be Saved?

By John Keister | March 28, 2008

I was struck recently by two events, one national in nature, the other very local.

First, the national event: When The New York Times announced in February 2008 that they were cutting 100 positions from their newsroom, it was a sad moment. A prominent national paper that informs our opinion and dialogue was announcing a cutback. This, of course, is not the first event of this ilk. The San Francisco Chronicle announced last May that 25% of its staff would be cut by the end of summer 2007. One report states that there have been more than 70,000 US media layoffs since 2000. So that begs the question: How far will this go? Will offline versions of national papers wither further? Will the online versions of the newspapers be composed of a skeleton crew of writers?

Then, there was a local event: The same week as The New York Times announcement, I noticed that the newspaper vending machine for The Seattle Times was removed from a sidewalk location on my way to work. I always stop at the vending machine, read the headlines, and if I see an interesting article…I go to my desk and pull up Seattletimes.com. All of this led me to think…will we see an acceleration of newspapers going digital or going away? Will the paper versions of these newspapers be a thing of the past? Should I have bought more of those newspapers on my way to work instead of using it as a free teaser for the online version?

Why do I care?

All the obvious reasons! Newspapers inform our opinion, educate us, entertain us and keep us in touch with the world. They employ some of the most educated and experienced writers on a variety of subjects. The New York Times, like many large national newspapers, is constantly a reference for events that are shaping our nation. An article in that paper can swing elections, throw elected officials from power, and swing public opinion. Somehow I believe that as the resources at national newspapers decrease, the chances of the Woodward-Bernstein team uncovering the Watergate scandal, for example, go down in tandem. The chances of a great, well-researched, well-articulated news piece on the Iraq war, our presidential election process, health care, social security, and most importantly, the Seattle Mariners, all go down.

People have been watching the plight of newspapers for some time now, as the digital era marches on. So let’s be frank, this topic is not virgin territory. In the February 2007 version of Vanity Fair, Michael Wolff wrote an article titled “Is This the End of News?”, where he argues that the newspapers have no clear revenue model to pursue online, and that they are undermanned when faced with the likes of Facebook, Google, Digg, etc. He is not real hopeful that the major newspapers will find and pursue viable solutions to transition their businesses.

So if we lose some of our national newspapers, one cut at a time, what will we reference for informed opinion on important subjects? Will we rely on the Drudge Report? Valleywag? The Onion? Blogging sites? Entertainment Tonight? For some, the free online magazines or bloggers are plenty to meet their news needs. For many others, we believe the large national papers are important, whether that be the New York Times, The LA Times, The Washington Post, San Francisco Chronicle, Miami Herald, etc.

So why are newspapers cutting staff, struggling to make money, make payroll and hold up subscription levels? Yes, online news and information is a big reason. I can read most national papers like newyorktimes.com for a fraction of what I pay for the paper version (many of the digital versions of national newspapers are free).

There is no easy fix here. Newspapers try to move their business online, and most have zero/minimal subscription revenue and, more importantly, substantially more competition for advertising dollars. Twenty years ago, offline, the newspapers were the kings of their respective cities, advertisers needed to be there. Online, an advertiser can use Google or Yahoo! or other online traffic sources to target consumers in a given city.

So what is a newspaper to do? Well, they have tried many models. To date, unfortunately, there has been limited success. Here are some of the avenues that newspapers have pursued:

  1. Some entities have tried to transform their entire business via M&A activity — like when NYT bought About.com. The M&A route takes a great deal of money and effort, but I do believe that if a newspaper group has the resources, this is a legitimate way to try and bring the online advertising and online business DNA into your organization. It certainly does not guarantee any change to the old media DNA, but it can be a catalyst if senior management is truly committed to a revolution.

  2. Some have tried to sell a blend of offline and online newspaper placements. The issue here is that there is not enough online newspaper traffic to make up for the offline spend in most cases.

  3. More recently, some of the newspapers have tried to band together and bundle their traffic for advertisers in an effort to make up the ground on volume. The question is how much traffic do you need to be relevant to an advertiser? The other problem here is that most online advertisers want the major search engines to be an important part of the mix when they place their online marketing buy.

  4. So some of the newspapers have tried something else: They try to package newspaper advertising sales with a Google/Yahoo! search marketing package. In effect, they want to “draft” off the success and name recognition of Yahoo! and Google. One of the challenges here is that the newspaper sales teams may not understand the online search marketing sale as well as the newspaper sale. It takes a substantial amount of training and incentives to change behavior in the newspaper sales team. To date, very few newspapers have committed the financing and muscle to succeed in this regard.

As I said at the top, I care about newspapers — whether in the online or offline form. I want them to succeed, flourish, and have the means to staff the best writers in the country. What I am going to read in the park while I drink my coffee on Sunday? The Catcher in the Rye? Forget it! I want my old school newspaper! I want to read the columns from my local scribes, and from folks like George Will, Maureen Dowd, Mitch Albom. In my next post, next Friday, I will offer a couple of possible solutions for newspapers to defend their advertising dollars, and potentially grow them over time.

Topics: Newspapers, Advertising, Content |

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