Are Newspapers Headed For Extinction?

The short answer is no, despite the pounding newspapers have taken recently, according to the Pew Trusts' Project for Excellence in Journalism in its annual State of the News Media 2009 of March 16.  The Project found that the newspapers that survive are profitable, although new business models will be required to keep them that way.  Cable TV news shows are winning advertising dollars away from newspapers and from ABC, CBS, and NBC, while online sites like Craig's List have eaten away at vital classified advertising revenues.  The three big print and online newspapers, The Wall Street Journal, The New York Times, and USA Today held their own as their smaller brethren closed shop.  One-quarter of newsroom jobs that existed in 2001 will be gone by the end of this year.

There has been much angst in print recently.  Today's New York Times' David Carr gives a thorough review of "how do we survive" thinking - it comes down to how to charge modest fees for premium content without driving away the millions of Internet readers who expect their news for free and without whom online advertising dollars vanish.

Last Saturday's Washington Post carried an op-ed from two attorneys who urged tighter copyright standards, looser ownership restrictions, antitrust exemptions, and tax subsidies as ways to save newspapers.  As an economist, I could handle some updating of copyright for an Internet world to throw "micropayments" from Google to content providers, but I tremble at the thought of how Congress might draw that line.  Would that mean that the guy who Twittered the photo of U.S. Air 1549 landing in the Hudson would become a whole have become a whole lot richer than he did?  What about the music historian who spent his whole life unearthing a lost work of a famous composer, only to find it up on the web before his publisher could print it?  I have my doubts about letting Rupert Murdoch add to his media empire, and I can assure you that throwing tax subsidies at newspapers will enrich tax lawyers and do little for newspapers.

A long time ago, I was News Editor of the Campus Times at the University of Rochester.  I learned a lot stringing along with the New York Times reporter who covered Rochester's first draft trial in 1969.  I also learned that the lowly Campus Times could write a better story for students that would never get picked up by the major media.  Without the Watergate investigative reporting of The Washington Post's Bob Woodward and Carl Bernstein, I never would have been hired by Congress' Joint Committee on Taxation, not to mention what else President Nixon would have attempted with two and a half more years.

Now every major news outlet is begging for content from anyone who wants to send it in.  Dozens of blogs are the norm.  Everyone expects their own instantaneous personally customized news.  Fewer and fewer watch the Nightly News or read news magazines. Paraphrasing Tom Friedman, the news world is flat.  First hand sources proliferate all over the web, but hardly any of that content passes through the hands of a good editor. Sorting out facts from the chaff is a challenge.  As with most technical innovations, the good is accompanied by the bad.  Air travel was a boon, but, in the early days, you literally took your life in your hands.  It takes time, as in years, to integrate and to improve any new technology.

Let's face it, for hundreds of years, major newspapers were local monopolies.  They did what monopolies always do: sit on innovation, push one-size fits all, glorify themselves as arbiters of what's important, push their owners' points of view, grab political power, crush competitors, and charge captive audiences monopoly prices.  Now that the Internet has forced them to compete, newspapers are struggling for their lives.  Yes, some of their content is being taken by greedy search engines without compensation, but they have some obligation to catch up with the times and find a business model that works.  Like the Pew Trust's Project for Excellence in Journalism, I believe enough newspapers will survive, and become stronger for it, to sustain our democracy.