Jonathan, sent me a link to David Simon’s blog awhile back and in the comments of the introduction he gets into a debate with someone about the future of newspapers. I know he’s right about the problem and solution, and despite the occasional idiotic moves by clueless investor/owners the industry will rise from the ashes soon. (I would not bet against Buffett on this.)
The media landscape has indeed changed and is still changing, and honestly, you’re missing it.
Yes, in the past, circulation didn’t support the paper — it was a loss leader. Advertising revenues supported the paper. Why? Because of the costs of circulation: Newsprint, presses, pressmen, trucks, gas, etc. It cost money to get a newspaper to a doorstep, regardless of how much coin you could charge for the product.
But now? Take a long breath and think about it.
Now, for the first time in the history of prose journalism, every paid subscription to a newspaper operating with a paywall is pure profit, save for the static costs of maintaining the digital website. The world has flipped and slowly, belatedly, the newspaper industry is realizing it. In fact, the reason the industry leaders failed to see it for too long was that they were wedded — as you are still wedded — to the model in which advertising with the god of revenue and circulation was the loss leader. But that isn’t true digitally. Now the future of journalism lies in paywalls and a paid circulation base. Now digital advertising can’t command sufficient rates to support first-rate journalism. (You’re wrong about that, too. Digital advertising on free webpages can only command pennies on the dollar of the print ad rates that once sustained journalism.) But digital circulation can sustain such an enterprise. And is doing so: The New York Times goes to a paywall and now has 700,000 paid subscriptions, and on the strength of that figure is being upgraded by Wall Street analysts. Next quarter they will be back in the black for the first time in many a year.
People always paid to have the paper come to their doorstep. Eventually, they’ll pay to have it available on their digital devices. As they are doing with the NYT. And the Wall Street Journal. And the FT. And even some regional papers and chains are now experimenting. Would it have been easier if they had not let the horse out of the barn for a decade or more? If they hadn’t eviscerated themselves in cost-cutting and ushered so much talent and content out of the newsrooms? Of course.
But they did and now the only road back is to nuture the paid subscription model and use revenues to reinvest in the coverage that people want and can’t get otherwise. And digital subscription revenue — which is now profit, not a loss leader as it was in the days of newsprint — will sustain the news-gathering function of a professional newsroom. The NYT at the top of the foodchain is proving it and most every other newspaper chain in the country is either following them or preparing to do so. This is the end of the beginning of a very dark and misplayed era for professional journalism.
Do the research. You’ll see that your argument is about two years behind the actual trend in the industry. Kind of embarrassing when you label people as Old Media and New Media, but then you go on to miscalculate your argument based on an Old Media model that no longer actually applies.
Then in a follow up comment
Every major newspaper chain — every single one — is now planning to eventually maintain paywalls. Again, it is end of the beginning.
You are used to a world that is unsustainable. News organizations have realized they must find a way to create a revenue stream through digitized delivery, and they are engaged in doing so. Your ability to get the best journalism for free is going to become less and less and at some point, if you want to have professional journalism, you’ll pay $10 or $15 or $20 a month for it. As readers did when it landed on their doorsteps every day.
And if the industry really gets their shit together down the road, it will get to the point where you’ll sign up with a consortium for digital access to your choice of various national, regional and local media. As with your cable bill. You want the NYT and the local regional paper and SI.com or ESPN and the WSJ, check those boxes and send the monthly bill. Sound crazy? Don’t see why it would be. We all once got television for free. Eventually, they ran the cable into our homes and now we spend $40 or $50 or $100 a month for television. And that revenue supports a multitude of programming that didn’t exist a couple generations ago. Same thing can happen with journalism. But job one is having the major papers get behind the paywall.
Read it all here: David Simon | Introduction.