Thursday, October 29, 2009

Newsprinter circulation: a vehicle driven to tears

Freedom of the press is limited to those with the ability to run one
- A. J. Liebling

What's black and white and read in the red all over? The newsprinter business apparently. Well, not actually. In fact many newspapers are more profitable than the evil health insurance companies (here + here).

The Audit Bureau of Circulation released newspaper circulation numbers a couple of days ago...the Washington Post and other walking-dead media continue to bemoan the accelerating decline in paid circulation for America's newspapers (here and here for example). For a complete roundup, check Newspaper Death Watch (here)

And while the Newspaper Association of America tries to convince itself of the successful migration of newsprint to digital (here), it would seem that everyone also understands why the economics of the move online are not working in a quid pro quo manner:

"Ads on newspaper Internet sites sell for pennies on the dollar compared with ads in their ink-on-paper cousins."

That's generally what happens when you apply technology to gets cheaper.

So What?

What the decline in the nation's largest newsprint organs means is anyone's guess, but here's mine:

1. Journalism isn't dead: If the NY Times (and other big media) disappears in a sea of red ink, the republic will survive. The issue of newsprint's decline is one of inefficient media...not content. Investigative reporting doesn't really have anything to do with distributing a crossword puzzle, Paul Krugman, or the Yankees. Those are legacies of big media's bygone mass attention monopoly. The economics of the NYT investigative reporting is still built on the presumption that the book reviews matter...and that the newsprint that carries them matters too.

2. Print isn't dead: At least, it isn't if you are relevant.  Like politics, the most relevant news is local. The same ABC statistics show that small dailies seem to be doing ok. Newsprint subscribers seem to find the cost of a printed newspaper reasonable when it covers news that is local. Thinking smaller, though, isn't generally in the nature of an organization that thinks it's already printing all the news that's fit to be printed. And even local news organizations get that print has to be integrated with low cost online outlets.

3. News is a commodity: Newsprinters trade in information and information is a commodity. Analysis and opinion, on the other hand, are the stuff of differentiation. They also tend to engender polarization. The newsprinters who reconcile their ability to draw an audience around their opinion may survive, albeit as smaller enterprises. But smaller is where their headed one way or the other.

4. Economics matter: Advertising is subjected to the same forces of cost efficiency, measurability and effectiveness as every other industry. As long as newsprinters rely on advertising, their cost structures will have to reflect the declining value of advertising. This may mean that those who want print have to assume more of the cost of print. And of course, the major newsprinters aren't losing money just because they aren't selling ads. They sucked from the same debt trough as so many of their readers...buying baseball teams, buildings and trucks with low cost Greenspan dollars for example. The bills have been coming due for quite some time. What the profitable papers are figuring out is that, like everyone else they have to reduce costs or raise prices...or both. How that works out in an era of deflation is anyone's guess.

And let's not even start on the environmental considerations of the meantime, I'll wipe away my crocodile tears and continue looking forward in the new age of news.

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