Allan Mutter offers a great capsule analysis of the predicament of newspapers and the historical forces that landed them there:
The collapse of the newspaper business most assuredly was aggravated by the downturn in the economy. But it is important to note that the sales decline was well under way before the economy cratered. It is a grave mistake to think, as some industry leaders apparently do, that the industry’s problems will be solved when the economy improves.
Without reproducing Mutter’s analysis or my previous discussions on newspapers, I’ll say this about the future . . .
Newspapers have basically lost the distribution game, similar to other traditional industries now competing online. Some local news-publisher brands have decent traffic and have built online audiences, but portals, search engines and aggegators of various stripes have won. This is about the scale of the Internet and the better user experience and greater efficiency that these sites can bring to end users.
As symbolic evidence of this the NY Times’ Saul Hansell just left to become the head of AOL’s Seed.com unit, managing the company’s more than 2K writers and freelancers. This is the “newspaper” model of the future and Hansell (perhaps wisely) sees that. Time will tell whether he helps maintain and boost quality or if he simply presides over a mountain of mediocre content designed primarily to generate page views for ads.
Portals such as MSN, Yahoo! and AOL are also moving aggressively into local news by doing deals with various types of publishers. MSN’s just announced deal with Hearst and NBC Local Media is one of several examples. Big branded news sites such as CNN and MSNBC have moved much more into local content. So this arena — once thought to be the salvation of newspapers (“hyper local”) — is being squeezed by larger online players, with the help of some of the affected entities. But it’s a “damned if you do, damned if you don’t” scenario because these larger sites control distribution and audiences.
If News Corp. pulls its content from Google, for example, that content simply “won’t exist” for many users. News Corp. will suffer not Google.
The thing that newspapers can offer that some of the online competitors cannot as readily is quality content, but that’s being undermined by layoffs and increasing reliance on wire services: AP, Reuters, AFP, etc.
The online world is “flat” and everyone is everyone else’s competitor. The distinctions between radio, print and TV don’t exist online. Period.
The audiences, with few exceptions, will continue to migrate toward these larger sites that can bring together a wide range of news and features content, with video and other functionality. MSN Local Edition is a great example. You can criticize it as incomplete or lacking depth but it will continue to get better.
There are newspaper publishers among the top news sites; however only the largest and most battle-tested of these publishers will make it as audiences consolidate around fewer and fewer major online players. Most news content creators will turn into feeder sites for these bigger players, making revenues very difficult to generate; they’ll get a fraction of what they used to get when they owned sales, content and distribution in the print world. That will require further layoffs and cost cutting in turn — the downward spiral.
At the bottom or low end, bloggers and specialized publishers (with different cost structures or very lean) will produce generally better vertical and “hyper local” content. They’ll be supported by larger networks or third parties, such as Outside.in facilitating distribution to the larger sites like CNN. However local “hard” news may suffer as bloggers and vertical publishers steer toward more commercial or feature oriented content and fluff/gossip, rather than covering the school board or police beat.
TV news and newly beefed up radio news online (such as NPR) will also fill the gaps left by the failing traditional newspapers. And the wire services will provide the national “commodity” news that is distributed everywhere. Reuters, for example, also recently redesigned to make itself more of a consumer news destination.
The argument that quality is being drained from news (or will be) because of the demise of traditional news publishers is partly correct but not entirely. Outlets such as NPR, CNN, Reuters, AFP, PBS, TV networks and others such as Pro Publica will provide ongoing high levels of quality to the range of news aggregators, portals and a few others that are becoming dominant. At the local level it’s more complex.
The decline of classifieds advertising for local publishers and their generally poor financial position will increasingly remove them from the realm of buyers of local online services, just as the yellow pages have been somewhat compromised in their ability to invest and/or buy local online startups. Thus the local ecosystem becomes weaker (this is an argument that Hearst’s Scott Wolfgang made to me a long time ago).
News and journalism are not dying, but the ability to make a good living as a journalist is getting much harder. Consumers largely won’t pay for “commodity” news content as the pay walls go back up. So there will be more bankruptcies, more consolidation and more failures on the horizon. The post-newspaper apocalypse is grim for journalism as a career and bad for certain types of content and coverage but consumers may hardly notice in major markets. Most of their news will come from big portals, which will be able to put together enough content from enough different sources to be sufficient for most readers and audiences. There will also be a few other big news brands that survive. Vertical sites and blogs will satisfy enthusiasts’ needs for niche or specialized coverage. Many of the top tech blogs are being run by former traditional journalists.
In a few non-metro local markets maybe traditional news publications will continue to survive or even thrive. But it will be very hard for individual municipal/metro editions to make it: they won’t have enough traffic to generate great ad revenues and their audiences will largely be unwilling to pay subscription fees. Even the NY Times, which will survive, will be subject to many of these trends.
I had a friend say to me just yesterday that he considers his subscription to the print NY Times to be a “charitable contribution.” There you have it.