During the current economic dilemma we are experiencing the gradual deterioration of both the free market economy and the newspaper industry. Actions of our new federal administration thus far have shown its approach to solving our economy by first paying back their huge political obligations to the special interests, especially the Unions and liberal establishment.
Of immediate danger is the American newspaper industry which is closing more newspapers almost every week due to falling advertising lineage and circulation and ever increasing labor costs. In an earlier commentary I listed the top ten prospects for closure. Those papers have either shut down or are in bankruptcy. I believe that the situation has grown so severe that the trend is now irreversible.
Technical advancements have given the newspaper industry tremendous competition for each pair of profitable eye-balls with the advent of the internet and the 24 hour cable news channels. News can be viewed on cell phones. Particularly the younger generation is going elsewhere for news and information.
Although my local paper is still viable, I personally will miss my morning newspaper when the day comes that it ceases printing, and I suspect that shortly I will only be able to rely on USA Today and the Wall Street Journal for good analytical journalism. As we lose more and more newspapers we will be deprived of thorough investigative reporting that has provided us with invaluable information, i.e., would we have learned about Watergate without the Washington Post? How will we learn about political issues, especially on the local and state level? Gone will be the days of solid foreign bureau analysis from respected reporters in the capitals around the world. It has just become too expensive to maintain foreign news bureaus.
It is not just the rising cost of paper or ink, but the unrealistic expectations of the newspaper unions who represent the pressmen and reporters. As circulation shrinks, the expense side of the balance sheet continues to grow due to built in benefit obligations. Something has to give and it is obviously going to be the quality of the actual newspaper product. My local paper has reduced the page size, and now it is about half the size it once was in page count. We no longer see advertising lineage increases, but more fluff pieces, and thus less reader appeal. I am just about to drop my local newspaper subscription, but I hang on out of the fact that old habits are hard to break.
I once could rely upon the New York Times for solid information, but its growing liberal vent has turned me and thousands of other readers off to its biased agenda. It is sad to see a once proud institution’s demise just because it no longer gives the customer what they have learned to expect.
Why do a few newspapers continue to increase their circulation? Both the USA Today and the Wall Street Journal have reported increased ABC (Audit Bureau of Circulation) figures. They are surviving and actually growing in this ever changing competitive climate, because they are giving their readers what they crave. Crisp writing, good reporting, excellent coverage of both local and foreign news, with superior business information, and just enough sports information to satisfy their customers.
When I started working in the exploding television industry back in the mid-1950’s the owners of newspapers were investing heavily in the new medium. Television scared the hell out of the print industry, so they joined the ranks of television to protect the bottom line. Many newspapers still own and operate both papers and television stations, but television is failing lately, too with excessive competition. No one has found a way to make a significant amount of revenue from their new web sites, and there is not sufficient time left for the newspapers to survive. They have simply run out of both money and time.
At sometime in the future I would love to read the conclusions of case studies that will be conducted by graduate business schools like Harvard University’s MBA program or the University of Pennsylvania’s Wharton School. Time will provide us a better perspective as to why the newspaper industry disappeared.
With the demise of the newspaper industry as we have long known it, we the readers will lose an invaluable source of information, insight, understanding, and my morning coffee will never quite taste the same ever again.