The Sky is Falling on Newspapers. Sorry, Dad.

[Joanne98]

“Nobody outside the newspaper industry really understands just how bad things are.” For over a decade I’ve heard this statement and others like it everywhere – at the dinner table and on family vacations, over the telephone and in the grocery store on trips home. I’ve heard them from my father, a newspaper journalist of 40 years, and from his friends, most of whom also began their reporting careers in the late 1960s and early 1970s.

As of today, nobody in or outside the business can deny the sad reality. The Tribune Company, which owns two of the nation’s great newspapers – the L.A. Times and the Chicago Tribune – as well as six others, has filed for bankruptcy. Sam Zell, the chain’s controversial CEO, insists that the bankruptcy is simply a way of restructuring the company's debt and not a catastrophe, but it’s hard to see how this could be true. Even if he’s right in about the outcome of this one bankruptcy – which I doubt – he’s wrong in the more important sense. Newspapers are dying.

I should know. Less than a week ago, my father’s current paper, the Rocky Mountain News, was put up for sale. In the current climate, with credit scarce and other papers on the brink (including the New York Times, which is – incredibly – offering its legendary office building as collateral for an operating-expenses loan), this almost certainly means that the paper will fold. Probably the best that the employees can hope for is that the process of folding takes long enough for them to find other jobs. The Tribune bankruptcy adds another layer of financial anxiety. Nineteen years of my father’s pension – from seven years at the L.A. Times and twelve at the Baltimore Sun – are now tied up in Chapter 11.

Something has to change. No matter how hard or well reporters work, there simply isn’t enough money to support them anymore. Truth-seeking (for better or worse) has never been a for-profit activity. Newspapers have just been lucky in that they found a way to subsidize this high-cost endeavor – classified ads. That subsidy is fast disappearing with the Internet in general and craigslist in particular. If we as a country want to continue having a written representative in the “fourth branch” of government, we’re going to have to come up with another one. The fifty cents or so we pay for a printed paper isn’t enough to pay for things like foreign bureaus or investigative reporting. (Expenses like these are why blogging is no substitute.) And of course, these days many people read the paper on the web and don’t even pay that fifty cents anymore. (My dad jokingly lays the blame on me and my online reading habits in his column about the Rocky going up for sale.)

continued>>>
http://www.creditslips.org/creditslips/2008/12/the-sky-is-falling-on-newspapers-sorry-dad.html

They are losing money because they depend on advertising and because they went public. They need to re-organize. Become NON_FOR_PROFIT! Get rid of the shareholders and the boards. We need newpapers but they need to "afflict the comfortable." They can't do that when the comfortable are their customers or shareholders. Sorry!

[blm]

1. Exactly - KnightRidder was FORCED to sell by a Bushloving major shareholder

unhappy with the DC Bureau's work uncovering the COOKING OF IRAQ INTEL BOOKS by the WH. When they reported the Downing Street Memos, they were really PUSHED HARD. The sale went through shortly after DSM story broke.

[Joanne98]

2. I know. Journalism is too important to be corrupted.

A new model is the only why.

[blm]

5. Opening it up to shareholders and 'investors' made it beholden to some elite crooks

Look how CNN was easily corrupted by the global fascists - and now it's major shareholder is House of Saud. Gee - no conflict there, right?

[Joanne98]

7. You're right. But now no one will buy their papers. They have to change.

I hope the good guys just start up their own.

[rvablue]

12. Really, the Saudis own CNN....I did not know that....that's

why I like DU....I learn something every day.

It might be as depressing as hell, like your tidbit, but at least now I know. Egads!

[blm]

13. It gets buried. AOL/TimeWarner/CNN....Kingdom Holdings controls a giant share.

.

[4 t 4]

14. Oh Man I am sure sorry for your Dad

It really is like the end of an era. One paper I know that does pretty well is the Chicago Reader. The paper is free, it prints once a week. The advertisements are more local than national but there are many of them and that is where they make money. EVERYONE reads it because it is free so advertisers pay up for ads. Just a thought. Good luck to you and your Dad.

[FarCenter]

3. Why doesn't the on-line model work?

Practically all you have are the reporting and editorial expenses.

Servers, software, and ISP access don't cost that much.

No expense to buy paper, ink, and other supplies.

No investment in costly presses, printing plant building, folders and bundling machinery.

No composition or typesetting, printers, delivery staff, trucking and other transportation costs.

No compensation to distributors, newsstands, etc.

It would seem that you don't have to make too much from on-line advertising to support the reporting, news-gathering, web content management, and hosted data center expenses.

[Joanne98]

4. True. Good journalists should create their own papers. Like Huff post.

[rvablue]

9. Huffpost doesn't have any original reporting, just wire reports and opinion peices

I know they have that citizen report type feature, but as we saw with that Obama fundraiser tape, those individuals to not follow normal, basic journalist ethics.....

[blm]

16. Joanne - the latest Parry article is a strong companion piece to your post.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4626208&mesg_id=4626208

[Dark]

10. They don't make enough money on advertisements.

Not to mention journalists get shit pay already, and it's been going down. Also, it's easy for people to steal your stuff on the internet. Problem is, it's hard to avoid corruption when you dhave power bbut not money.

[happyslug]

15. I believe it is the old story of Milk, Bread and the Supermarket.

What are the top items most people stop at Supermarkets for? The answer for decades was "Milk and Bread". For this reason the milk and bread tended to be in the back of the store so shoppers could walk by and see the other items the supermarket were trying to sell. To a degree this is still true, what are on the top of most people's list is at the back of the store, other items closer to the cashiers.

Furthermore, most supermarket priced "Milk and Bread" to break even or at best a slight profit, knowing people will ALWAYS want them day after day. It is what pays the rent and salaries of the store. The items closer to the Cashier do NOT sell day to day, but when they sell, the profit is much higher then on Milk and Bread. This is where the store makes most of its profit, but stays in business knowing that Milk and Bread will pay the rent, utilities and salaries.

The problem with the Newspapers is that the want ads were its Bread and Milk, no high profit margin but stead income. You paid the Rent, the Salaries, the Utilities out of the want ads, the rest of the ads and the price of the paper is high profits, but varies to much from week to week to really budget the paper. The want ads is steady (Especially if the Paper is the paper named by the local Government as the paper that any legal notices must be published in). This is steady money, people wanting to sell their homes, rent out homes etc.

Over the last few years I have seen a transformation of the local real estate booklets, I have started to see places for rent. It use to be such rentals were only advertised in the local newspaper, but with modern computers the real estate booklets (and on line services) can get such ads to potential renters quicker then old fashioned newspaper ads. This is a tremendous lost of revenue, exceeding almost any other source of revenue. I point out this out for this lost of revenue has to be made up somewhere, and the ads in the main part of the paper may not be enough.

The lost of Auto ads is almost as bad (if not worse), this time do to the fact many buyers are no longing buying from the local car dealers, but instead ordering them over the net and then picking them up at the local dealers. The dealers lose money of such transactions, but this has been the waive of the future for over 20 years. I am surprise that local dealers are doing any advertisements in the paper other then to keep their names in the mind of the people who look at the papers for cars out of habit.

The lost of these three markets to the net (Real estate, rental units and Cars) are a tremendous blow to the papers. Where are they going to get the same stead revenue streams? Most regular ads barely pay for the cost of printing them, even the Politicians rarely adverse in papers anymore. magazines are not in much better shape, depending more on regular ads, with those advertisers dropping papers and going to the net even more then advertisers in the papers.

Thus my point, it is the lost of the ads in the want ads section of the paper that are killing the papers. These subsidize the rest of the papers. Historically before the US Civil War, all papers carried ADS on their front page. You had to buy the paper to read the news article, if you just saw the paper all you saw was the ads, for the ads paid for the paper. During the Civil War to get people to buy the latest news from the front, what we called headlines and front page news was invented (and then mostly about local people and units). This new format stayed the dominant form of paper till today. The problem is the paper can NOT go back to the pre-1860 version of newspapers, for no one will buy a paper with ads on the front page. Papers can NOT pay for printing the paper and writing the stories without ads in the want ads section. Sooner or later all of them will go under, unless a new way to pay for reporters and staff comes up. I suspect what will come up is products dominated by people who donate to a news agency, like we donate to DU. It is the only way to get a stead stream of income to pay people's salaries (an alternative method, NOT exclusive of the former method, is political parties form "news agencies" to get their message to the people via reporting. Governmental agencies will also get into publishing papers, but keeping them more as press releases as to what each agency is doing then anything else. News will change, the key to be able make sure the change improves information that gets to most people as oppose to restricting what news get to most people.

[rvablue]

6. While it can and has served it's purpose, in a few years, Craiglist will be

remembered most for killing the American newspaper industry. CL, also paired with the fact, as you mentioned, that so many papers were purchased from families by corporations...that was also the death knell....

I don't think we are going to fully understand the consequences of this -- such as potential rampant corruption (more so than today) and the total, final dumbing down of TV news -- until after they are gone.

I think the first step that newspapers should take is laying off editorial writers, as they are some of the highest paid staffers at newspapers and there is already more than enough OPINION in the news that we get anyway, on a cable and with syndicated columnists.

[Joanne98]

8. Craig's list has really hurt.

[blm]

18. There's a DailyKos diary you might find interesting.

What happens to reporters who DO their jobs honestly? Gary Webb story should be a warning to any citizen.

http://www.dailykos.com/story/2008/12/10/9337/2915/828/671427

[Blue_Tires]

11. sad state of affairs

<----- former reporter who could never get hired and stay hired....

[blm]

17. This post deserves more Recommends.

.

[RB TexLa]

19. I think trying to save newspapers is a lost cause. I'm sure a lot of good hardworking people thought

their candle making businesses could compete with electricity as well. There will always be a market for alternative, ethnic, or otherwise targeted newspapers but the days of "major" newspapers are coming to a quick end.

[Octafish]

20. ''Truth-seeking (for better or worse) has never been a for-profit activity.''

Like your father, I, too, am in the news biz. Good journalists, like good teachers, make a lot less than they deserve. The stars are millionaires, but they're entertainers.

Here in Detroit, the then-owners of The Oakland Press, followed about a decade later by the then-owners of The Detroit News and The Detroit Free Press, brought in legal experts to bust the unions at their papers. The results have been three new sweatshops, where everyone feels threatened with termination because they have a stack of resumes ten-feet high that can do a job for even less.

You answered this, Joanne98: Why would teachers and journalists and other truth-telling professions be paid so poorly? Keeping We the People uninformed helps the rich get richer and more powerful. By getting around the Constitution's mandate to the free press -- the only business mentioned by name in the Constitution, the free exchange of ideas is needed for our Democracy to thrive -- today's ruling class needs to use the powers of government to afflict the afflicted and comfort the comfortable. That's why public schools are bad. That's why public broadcasting is going broke. That's why the media monopoloy works for Bush Inc.

[williesgirl]

21. I used to work at Wash Post. They had tons of reporters who's by-line you never saw. We

used to wonder what they all did! I think newspapers should eliminate their editorial depts first as they really aren't necessary to collecting and reporting the news and usually end up bringing charges of bias against the newsroom. There should be no sacred cows left in the building. Classified Depts have shrunk as the ads have moved on and computerization allows ad agencies to do their own layouts etc and send them in electronically. Ad Services depts are practically non-existent as a result of major companies doing their own ads and sending them in electronically as well. That should have resulted in major cutbacks in ad reps.

I think if they focus on real news, leave their opinions out of it, cut the stupid fluff that supported the dumbing down of America, they can survive. God knows they're necessary to all of our survivals.

Maybe they should do a fundraising drive for their online viewers like DU does. I'd sure support washingtonpost.com.

I was shocked to read recently that for the Wash Post Company, Kaplan was their revenue leader, not the newspaper. When I was there, the paper supported everything else. How sad.