May 4, 2005

EVER TRY TO WRAP A FISH IN A GUI?:

Newspaper Circulation Continues Decline, Forcing Tough Decisions (JULIA ANGWIN and JOSEPH T. HALLINAN, May 2, 2005, THE WALL STREET JOURNAL)

The newspaper industry, already suffering from circulation problems, could be looking at its worst numbers in more than a decade.

Circulation numbers to be released today by the Audit Bureau of Circulations probably will show industrywide declines of 1% to 3%, according to people familiar with the situation -- possibly the highest for daily newspapers since the industry shed 2.6% of subscribers in 1990-91.

The biggest publishers may show the largest declines: Gannett Co., which owns about 100 newspapers, says it will be down "a couple of points" from last year's levels. Circulation at Tribune Co.'s Los Angeles Times is likely to be off in excess of 6% of its most recently reported figures. Belo Corp.'s Dallas Morning News expects to report daily circulation down 9% and Sunday circulation down 13% from the year-earlier period. All projected figures are for the six months ended in March. [...]

Long stuck in a slow decline, U.S. newspapers face the prospect of an accelerated drop in circulation. The slide is fueling an urgent industry discussion about whether the trend can be halted in a digital age and is forcing newspaper executives to rethink their traditional strategies.

Rather than simply trying to halt the decline, which can be done readily through discounts and promotions, they're being forced to try to "manage" their circulation in new ways. Some publishers are deliberately cutting circulation in the hope of selling advertisers on the quality of their subscribers. Others are expanding into new markets to make up for losses in their core markets. Some are switching to a tabloid format or giving away papers to try to attract younger readers. Others are pouring money into television and radio advertising and expensive face-to-face sales pitches to potential subscribers.

The losses come at a time when Americans have many news outlets that didn't exist 20 years ago, including cable-television news channels and Internet sites, as well as email and cellphone alerts. Many newspapers have substantial and free online sites offering much of what is in the printed paper. These sites might not hurt readership overall, but they can erode a newspaper's paying audience.

At the same time, many newspapers have undercut the print product itself, trimming staff and coverage. They also have failed to figure out how to attract younger readers to their pages.

At a recent industry conference, News Corp. Chairman Rupert Murdoch sounded the alarm about what he called a "revolution" in how young people access news. News Corp. owns television stations, movie studios, cable channels and 175 newspapers world-wide. Mr. Murdoch said young people essentially relied on the Internet for news, and unless the newspaper industry recognized these changes, it will "be relegated to the status of also-rans."


Speech by Rupert Murdoch to the American Society of Newspaper Editors (American Society of Newspaper Editors, April 13, 2005)
Ladies and gentlemen, I come before you today with the best of intentions. My subject is one near and dear to all of us: the role of newspapers in this digital age.

Scarcely a day goes by without some claim that new technologies are fast writing newsprint’s obituary. Yet, as an industry, many of us have been remarkably, unaccountably complacent. Certainly, I didn’t do as much as I should have after all the excitement of the late 1990’s. I suspect many of you in this room did the same, quietly hoping that this thing called the digital revolution would just limp along.

Well it hasn’t … it won’t …. And it’s a fast developing reality we should grasp as a huge opportunity to improve our journalism and expand our reach.

I come to this discussion not as an expert with all the answers, but as someone searching for answers to an emerging medium that is not my native language. Like many of you in this room, I’m a digital immigrant. I wasn’t weaned on the web, nor coddled on a computer. Instead, I grew up in a highly centralized world where news and information were tightly controlled by a few editors, who deemed to tell us what we could and should know. My two young daughters, on the other hand, will be digital natives. They’ll never know a world without ubiquitous broadband internet access.

The peculiar challenge then, is for us digital immigrants – many of whom are in positions to determine how news is assembled and disseminated -- to apply a digital mindset to a new set of challenges.

We need to realize that the next generation of people accessing news and information, whether from newspapers or any other source, have a different set of expectations about the kind of news they will get, including when and how they will get it, where they will get it from, and who they will get it from.

Anyone who doubts this should read a recent report by the Carnegie Corporation about young people’s changing habits of news consumption and what they mean for the future of the news industry.

According to this report, and I quote, “There’s a dramatic revolution taking place in the news business today, and it isn’t about TV anchor changes, scandals at storied newspapers or embedded reporters.” The future course of news, says the study’s author, Merrill Brown, is being altered by technology-savvy young people no longer wedded to traditional news outlets or even accessing news in traditional ways.

Instead, as the study illustrates, consumers between the ages of 18-34 are increasingly using the web as their medium of choice for news consumption. While local TV news remains the most accessed source of news, the internet, and more specifically, internet portals, are quickly becoming the favored destination for news among young consumers.

44 percent of the study’s respondents said they use a portal at least once a day for news, as compared to just 19 percent who use a printed newspaper on a daily basis. More ominously, looking out three years, the study found that 39 percent expected to use the internet more to learn about the news, versus only 8 percent who expected to use traditional newspapers more.

And their attitudes towards newspapers are especially alarming. Only 9 percent describe us as trustworthy, a scant 8 percent find us useful, and only 4 percent of respondents think we’re entertaining. Among major news sources, our beloved newspaper is the least likely to be the preferred choice for local, national or international news going forward.

What is happening is, in short, a revolution in the way young people are accessing news. They don’t want to rely on the morning paper for their up-to-date information. They don’t want to rely on a god-like figure from above to tell them what’s important. And to carry the religion analogy a bit further, they certainly don’t want news presented as gospel.

Instead, they want their news on demand, when it works for them.

They want control over their media, instead of being controlled by it.

They want to question, to probe, to offer a different angle. Think about how blogs and message boards revealed that Kryptonite bicycle locks were vulnerable to a Bic pen. Or the Swiftboat incident. Or the swift departure of Dan Rather from CBS. One commentator, Jeff Jarvis, puts it this way: give the people control of media, they will use it. Don’t give people control of media, and you will lose them.

In the face of this revolution, however, we’ve been slow to react. We’ve sat by and watched while our newspapers have gradually lost circulation. We all know of great and expensive exceptions to this – but the technology is now moving much faster than in the past.

Where four out of every five americans in 1964 read a paper every day, today, only half do. Among just younger readers, the numbers are even worse, as I’ve just shown.

One writer, Philip Meyer, has even suggested in his book The Vanishing Newspaper that looking at today’s declining newspaper readership – and continuing that line, the last reader recycles the last printed paper in 2040 – April, 2040, to be exact.

There are a number of reasons for our inertia in the face of this advance. First, newspapers as a medium for centuries enjoyed a virtual information monopoly – roughly from the birth of the printing press to the rise of radio. We never had a reason to second-guess what we were doing. Second, even after the advent of television, a slow but steady decline in readership was masked by population growth that kept circulations reasonably intact. Third, even after absolute circulations started to decline in the 1990s, profitability did not.

But those days are gone. The trends are against us. Fast search engines and targeted advertising as well as editorial, all increase the electronic attractions by a factor of 3 or 4. And at least four billion dollars a year is going into R&D to further improve this process.

So unless we awaken to these changes, which are quite different to those of 5 or 6 years ago, we will, as an industry, be relegated to the status of also-rans. But, properly done, they are an opportunity to actually improve our journalism and expand our reach.

For those who are confronting this new reality, we tend to focus on the technological challenge, which is understandable, since it is one we believe – or hope – that we can do something about.

Thinking back to the challenge that television posed to the newspaper business, we can see some similarities. A new technology comes along, and like many new things, it is somewhat exciting at first, simply by virtue of being new. Like the advent of radio before it, television was always going to be at best an alternative way to get the news, and at worst a direct competitor. There was no way to make it a part, or even a partner, of the paper.

That is manifestly not true of the internet. And all of our papers are living proof. I venture to say that not one newspaper represented in this room lacks a website. Yet how many of us can honestly say that we are taking maximum advantage of those websites to serve our readers, to strengthen our businesses, or to meet head-on what readers increasingly say is important to them in receiving their news?

Despite this, I’m still confident of our future, both in print and via electronic delivery platforms. The data may show that young people aren’t reading newspapers as much as their predecessors, but it doesn’t show they don’t want news. In fact, they want a lot of news, just faster news of a different kind and delivered in a different way.

And we in this room – newspaper editors and journalists – are uniquely positioned to deliver that news. We have the experience, the brands, the resources, and the know-how to get it done. We have unique content to differentiate ourselves in a world where news is becoming increasingly commoditized. And most importantly, we have a great new partner to help us reach this new consumer -- the internet.

The challenge, however, is to deliver that news in ways consumers want to receive it. Before we can apply our competitive advantages, we have to free our minds of our prejudices and predispositions, and start thinking like our newest consumers. In short, we have to answer this fundamental question: what do we – a bunch of digital immigrants -- need to do to be relevant to the digital natives?

Probably, just watch our teenage kids.

What do they want to know, and where will they go to get it?

They want news on demand, continuously updated. They want a point of view about not just what happened, but why it happened.

They want news that speaks to them personally, that affects their lives. They don’t just want to know how events in the Mid-east will affect the presidential election; they want to know what it will mean at the gas-pump. They don’t just want to know about terrorism, but what it means about the safety of their subway line, or whether they’ll be sent to Iraq. And they want the option to go out and get more information, or to seek a contrary point of view.

And finally, they want to be able to use the information in a larger community – to talk about, to debate, to question, and even to meet the people who think about the world in similar or different ways.

Our print versions can obviously satisfy many of these needs, and we at news corporation will continue to invest in our printed papers so they remain an important part of our reader’s daily lives. But our internet versions can do even more, especially in providing virtual communities for our readers to be linked to other sources of information, other opinions, other like-minded people.

And to do that, we must challenge – and reformulate -- the conventions that so far have driven our online efforts.


The New Old Journalism (Adam L. Penenberg, Apr. 28, 2005, Wired)
What Murdoch found particularly disturbing was younger readers' attitude toward newspapers: "Only 9 percent describe us as trustworthy, a scant 8 percent find us useful, and only 4 percent of respondents think we're entertaining. Among major news sources, our beloved newspaper is the least likely to be the preferred choice for local, national or international news going forward."

Then again, perhaps Murdoch was thinking of the way many Americans view the decidedly unhip New York Post, a tabloid he owns.

Yes, it's true that newspapers are steadily losing readers and that younger people will undoubtedly choose the web. Ultimately, the printed word will die off. Not tomorrow or the next day, but in the coming decades. It's inevitable since it will be more cost-effective (not to mention better for the environment) to distribute news over the web and via cell phones and PDAs than by printing it on paper and relying on trucks to deliver it to newsstands and subscribers' doorsteps.

What is not true, however, is the notion that newspapers are dying. They aren't. In fact, more people read traditional news outlets today than ever before. But they are doing it on a screen.

Look at the most popular sites on the internet - not just news sites but all sites - and what do you get? NBC/MSNBC, Yahoo News, CNN, BBC, Google News, The Drudge Report, USA Today, ABC, Reuters and Forbes. They come from all over the country: The Arizona Republic, Chicago Tribune, Los Angeles Times, San Francisco Chronicle, Seattle Post-Intelligencer. And all over the world: The Guardian, Sydney Morning Herald and The Times of India. Some are solely web-based and cater to specific niches: Wired News, CNET. Then there's The Onion, a category unto itself.

Nowadays, news consumers have an almost unlimited choice. They don't sit down with a newspaper for an hour to read it cover to cover. Instead, they bounce from site to site, story to story, link to link, customizing their newsgathering experience, clicking on whatever stories from whatever publications appeal to them. They don't stick around long, but they do visit. It may be difficult for newspapers to figure out how to make money on them, but that doesn't mean that consumers don't find the product appealing.

People haven't been abandoning newspapers (and magazines). They have been abandoning the print medium.


There's a continuing need for someone to go out and report the news, just as there's a need for someone to gather intelligence for the government, but what foilks have come to recognize is that neither the MSM nor the CIA are much good at analyzing the data.

Posted by Orrin Judd at May 4, 2005 11:44 AM
Comments

The Internet is bringing about a tremendous increase in the quality of news ... MSM are suffering because they're not increasing quality to meet the new standards. They'll have to become more engaged with the Internet in order to reach both the sources and consumers they need to survive. Meanwhile, more sophisticated matching software may do them in.

Posted by: pj at May 4, 2005 1:18 PM

If newspapers didn't exist, try to imagine pitching the idea today. Paper, presses, trucks, etc., all to hand carry a hard copy to every subscriber, 90% stuffed with information the subscriber has no interest in. You wouldn't raise a dime.

Now consider that all the talk about the newspaper based sites basically treats the actual news as a by-product of the newspaper producing (ad containing) business.

Then think about this quote: It may be difficult for newspapers to figure out how to make money on them, but that doesn't mean that consumers don't find the product appealing.

Posted by: David Cohen at May 4, 2005 2:28 PM

Mr. Judd;

It's not so clear that Old Media is all that good at going out and reporting the news. Just consider all of the posts you've had here about the insularity of the Old Media crew in Iraq, hanging out at the hotel pool with each other instead of gathering data. The PajamasMedia collective seems like a closer approximation to the future, where networks of webloggers exchange local, on the spot, in depth reporting.

Posted by: Annoying Old Guy at May 4, 2005 3:31 PM

AOG - A big advantage Old Media has over Pajamas Media is that Old Media can maintain numerous anonymous sources. The multiplicity of anonymous sources makes it hard to tell who their sources are. These sources like the Old Media because they trust them not to reveal their identity.

Pajamas Media may be able to develop that trust in the future, but because they work on a smaller scale, it would be hard to have large numbers of relationships or to build close enough relationships with sources to be able to win the source's trust, know they're not being played by the source, and confidently vouch for the source to readers.

So I expect an elite, personally-connected media that distributes anonymous leaks, scoops, and purchased news (like the tabloids) working alongside a cost-efficient Internetworked media for routine public news.

Posted by: pj at May 4, 2005 3:41 PM

The big daily bi-costal newspaper outlets -- The New York Times, Washngiton Post, Boston Globe and Los Angeles Times -- have yet to face the same cunumdrum the big TV news outlets of NBC, CBS, ABC and CNN have had to face with the advent of Fox News as a direct competitor. But the advent of the internet has caused many people angered by the news slant of those papers to look elsewhere, a trend that will grow as more online sources become available.

However, the big papers are probably going to take the same attitude that many in Hollywood do towards the idea of curbing their biases to attract a larger audience -- for now, ideology trumphs increased profits, and some may be willing to keep the faith even if those profits turn to losses. There are a few conservative papers on East Coast, but Murdoch's New York Post and the Washington Times are dismissed because of their owners, while the Post also has its focus more on the flashy stories due to its tabloid nature.

The economies of scale work against the start-up of a major conservative broadsheet paper, since you can't nationalize your audience the way Fox News did (the New York Sun is struggling to find a niche as the conservative alternative to the Times). But if the circulation numbers continue to fall, it will be interesting to see if the owners of the papers are willing to ride their declining numbers down into the toilet while trying to change everything but the political slant of the paper's coverage, or if they try to push the coverage towards the right to try and stem the loss of readers.

Posted by: John at May 4, 2005 3:44 PM

The only reason to read a paper is local news.

Posted by: David Cohen at May 4, 2005 3:50 PM

The personals, David, the personals! Often, they are funnier than the comics.

Posted by: ratbert at May 4, 2005 4:05 PM

PJ:

Not so sure about the anonymous source point. Look at the many blogs today who do have sources like this. Admittedly, a number of them are military but the number is increasing in other areas.

David:

Agreed. Local news and sports will be about it in the future.

All:

I find less and less reason to watch or read the news these days from the MSM. I would rather read about a Supreme Court decision from Instapundit or Profs Bainbridge, Althouse or Volokh. Same for economics with Daniel Drezner or Jane Galt. I mean, why should I read the reporting of some good-looking knucklehead who drew the short straw and knows less on the subject than I do? My wife subscribes to the Sunday Chicago Trib. After reading the transportation section and comics, it takes me about 20 minutes to get through the rest of it. Just nothing I care to read about.

Posted by: Rick T. at May 4, 2005 4:54 PM

If you want data on the economy go to one of the Fed sites, the Bureau of Commerce, etc., etc., etc. If you want hyper-left proselytizing, well The Nation has a website, so why pay for content from the New York Times? If you want sports, try Yahoo, etc.
John - "Some may be willing to keep the faith even if those profits turn to losses." No doubt about it...but after enough losses, they've destroyed all their capital, then it's Chapter 11.

Posted by: Tom at May 4, 2005 5:09 PM

MSM is still clueless. Its the content stupid! They turn out the same old left wing pablum and they discover no one wants to pay for it. Morons.

Posted by: Robert Schwartz at May 4, 2005 5:39 PM

Rick - You make good points. Bloggers will probably get a lot of anonymous leaks that, for one reason or another, large media won't cover. Captain's Quarters releasing the Adscam testimony that Canadian media were barred from publishing is an instance. But I was thinking more of Presidents, Senators and the like, people who constantly have leaks to put out, need their leaks to reach a large audience, and have to have great trust that their distributor won't betray them. If a President used a blogger, people would eventually figure out that the President was behind the leaks. In short, if we didn't have an Old Media, the politicians would have to invent it.

In my view, local news and sports are well suited to Pajamas Media.

Robert - We can go to the DNC web page and browse their press releases for free.

Posted by: pj at May 4, 2005 8:35 PM

Slightly OT, but is "Belo" the perfect name for a media company, or what!?

Posted by: TimF at May 4, 2005 8:42 PM

"If a President used a blogger, people would eventually figure out that the President was behind the leaks."

Why is that any more likely with a blogger than with an Old Media newspaper?

Posted by: Tom at May 5, 2005 7:32 AM

When somebody blogs an 11-hour county budget hearing, I'll think you guys are on to something.

It's true that most people don't care about county budget meetings -- although they probably should.

Posted by: Harry Eagar at May 5, 2005 6:25 PM
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