More on Newspaper Shrinkage

At least two of the country’s major dailies, the San Francisco Chronicle and Newsday, are going to start charging for their online content.

The brutality continues:

Late Thursday, Tom Zucker, COO of Newsday‘s parent company Cablevision said the paper plans “to end the distribution of free Web content.” Zucker declined to specify when when Newsday will begin charging to read content on its site, and did not reveal what that pricing would be. The shift comes as ad revenue and circulation are both down at the paper: Cablevision bought Newsday for $650 million in May 2008, and was recently forced to write down Newsday‘s value by $402 million, leading to a fourth-quarter loss.

Meanwhile on the West coast…

San Francisco Chronicle parent company Hearst said Tuesday it would be forced to sell or close the paper if a series of layoffs and cost-cutting measures do not put the paper back into the black. According to former Chronicle city editor Alan Mutter, the paper’s management team revealed at emergency meetings held Wednesday that plans for the paper include the creation of “pay-per-view sections on the Web site.”

The San Francisco Chronicle also reported losses for 2008, to the tune of $50 million.

I’m not sure this will fully solve the problem of MSM figuring out what to do to boost online revenues, but, like newspaper bankruptcies, I think you’re going to see more and more of this. As Jacob Weisberg points out in this well-conceived Slate piece, newspapers are populated with basically a three schools of thought on how to address financing.

  • One camp favors what the Chronicle and Newsday are doing, directly charging customers
  • A second group argues for philanthropic support where newspapers would be “more like universities, with their independence underwritten by charitable endowments.”
  • The third school thinks that newspapers should simply beef up their ad rates for online content, since that’s where the future is.

Weisberg’s thesis is that this debate largely misses the point that journalism, in its most traditional, serious form, has never truly been a money-making pursuit, and that newspapering has been a subsidized in one form or another since its earliest days.

I think newspapers charging for their online content was inevitable, and that a micro-subscription, iTunes-style payment system might actually work.

But no matter what the end result is, the fact is that the way newspapers do business is rapidly changing, and these shifts are likely going to claim some more victims along the way.

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One response to “More on Newspaper Shrinkage

  1. Here’s what I think:
    IF you simplify to the extreme, you can liken what’s happening in the music industry to what’s happening in the newspaper industry. Major money-making arms of both industries (records, classifieds and subscriptions) are no longer feasible because of the extreme democratization and inevitable powershift towards the consumer delivered by the Web. In the music business, the revenue pools are shrinking and shifting (live concerts, merchandice), just like in newspapers (online ad revenue, and….???? uh oh).

    I don’t really think charging for content will work. The NYTimes tried it and hemorrhaged ad revenue. On the web, everybody who is anybod makes money with page views. Does google charge for gmail? Yahoo? Hotmail? Of course not. They make all their money by attracting eyes, and selling ads because of their high numbers. As the (ahem, blind) Gov. Patterson recently found out to his shagrin, PORN IS ALSO FREE ON THE INTERNETS. This is how the internet rolls, people. Making yourself less-accessible is not the answer.

    I see our future more as a combo of option two and three. First of all, a free and diverse press–in whatever form–is an essential part of American democracy, just like jazz and classical music and other subsidized arts in general are essential parts of American culture. Papers aught to make this as clear as possible to people with money while they can, and plead for support. There was actually a really interesting article a few months back in The Nation about papers run as community trusts, with endowments, etc.. It actually works fairly well in plenty of places around the world. Second option, get young, energetic people to sell the shit out of ads online, be inventive about getting unique page views and everything else.

    Yes, it’s sad. Yes, real watchdog journalism the old school way will give way to blogs. And yes, you’ll have to shrink your swollen news rooms and your circulation departments and your fancy design etc. etc.. But this the world you live in….until you cease to exist.

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