Newspapers are where the railways used to be, not where they’re at today. At the beginning of the 20th century railways had a virtual monopoly on long distance land transportation for freight and passenger. Then they gradually lost that monopoly to the motor vehicle and the airplane. By mid-century things had deteriorated so badly that many once profitable railways were going bankrupt. Since then there has been a remarkable turn around and the industry is once again very profitable.
Like the railways, at the start of the 20th century newspapers had a virtual monopoly on the reporting of news. Ironically the very thing that initially helped newspapers has led to their current tailspin – the invention of the electronic media beginning with the telegraph. Radio hardly made a dent in newspapers. TV was the first to make a serious dent as it made news immediate and visual. The assignation of Lee Harvey Oswald demonstrated TV’s superiority for that. However newspapers were still quite profitable.
It was the coming of the Internet and sites like Craigslist, Kijiji and Facebook that turned a once profitable industry into a seemingly dying one by stealing the classified ads. Revenues are falling and papers are closing.
Things have gotten so bad that Paul Godfrey, CEO of Postmedia, came cap in hand to the House Of Commons Heritage Committee in May asking for government assistance of some sort. One MP, Liberal Adam Vaughan, accused Godfrey of seeking government assistance to bail out Postmedia’s considerable debt load. As of November 30th its debt stood at $671.2 million
It would be very easy to ignore this if it was just Postmedia that was suffering, but it isn’t. The Torstar and other newspapers across Canada and the United States are also suffering. Papers have been laying off people, closing papers, losing advertising and losing readers for over the past decade as the Internet grows.
Thomas Walkom, national affairs columnist for the Toronto Star, argued in a column , that some form of subsidy, probably a tax break of some kind, is needed. Up to a point I agree, but even if adopted a tax break will not save the newspaper industry.
The newspaper industry, if it wants to survive, needs to follow the example of the railways. They turned things around by being innovative, changing the way they did things, speeding up service and becoming more customer focused. They also focused on their strengths and not on their weaknesses.
As I mentioned in a previous post, The Front Page Versus Harry Potter too many newspapers are still stuck in the past when print was king and not up today’s technological world.
Decades ago newspapers created press co-operatives, such as Associated Press and Canadian Press, to share the cost of covering news events and to sell and share stories among its members. In recent years these co-operatives have diversified and become more web based. Something similar should be tried with small classified ads to compete with the likes of Kijiji and Craig’s List.
Speaking of advertising, I’ve yet to see a grocery store ad whenever I visit a newspaper site. They keep trying to sell me cars and a lot of things I have absolutely no interest in, but not groceries. My free local weekly paper did not have grocery store ads, except the generic one for Walmart, until a few weeks ago when they’ve started carrying two stores. Hello wake up.
Paywalls are a mixed blessing when it comes to revenue. They bring in revenue at the cost of readers. The New York Times is probably the most successful passing a million electronic subscribers . However it is a global newspaper and most papers are not global, neither are they specialty. The Toronto Star put up a paywall and then took it down again.
Here again newspapers show a lack of innovation. Why not a site where people could subscribe to several papers instead of just one like the Globe & Mail and the Wall Street Journal or several local papers? For matter why not a service that would allow a customer to purchase a subscription to say local news in Southern Ontario or national, regional and local news or the environment and business or entertainment and sports? The combinations are potentially endless.
Is there hope for newspapers? Yes if they modernize and get creative. No if they continue on the track that most of them seem to be on now.