I am not eager to see local newspapers go the way of the dodo but with all the recent news about print editions of major newspapers shutting down [READ], it seems more likely that this 450 year-old medium is on its way to extinction. My friend who is a newspaper publisher attributes the newspaper industry’s current woes to the economic downturn. I have no doubt that the faltering economy has more than a minor role to play in the downfall of the newspaper as a viable business platform but I also remember this same publisher friend calling me well before the economic downturn complaining that their classifieds section was taking a beating from Craigslist. The real question in my mind is why the Internet hasn’t already killed this platform like pundits have been predicting for over 10 years?

The 10% Problem

There is an interesting trend in newspaper circulation and advertising rates vs. Internet circulation and advertising rates. For major newspapers, like the New York Times, the print publication reaches only 10% of the total audience that online version reaches but the online version only garners 10% of the advertising revenue that the print version does. [READ]

The reason for the disparity between advertising revenues is the fact that online ads are priced at a fraction the price of print ads. Online ads aren’t worth the same as print ads because they’re not perceived to be as valuable by media buyers. Either that or newspapers have intentionally kept the price of online advertising low so as to maintain the perception that it’s not valuable so that online real estate doesn’t cannibalize print real estate. At the end of the day, attribution of real value to advertising is almost impossible to do and pricing is dictated more by what the market will bear than real value.

The Internet Made Newspapers Better

As much as traditional publishers worried that the Internet would scoop them on every story, the Internet put some very valuable tools in the hands of journalists. Google, blogs, online databases, online archives and clippings services like Lexis-Nexis meant that any journalist anywhere could have access to the sources they needed to fact check, cross-correlate and research their articles. For example, I was featured in an Edmonton Journal article back in December, 2008 [READ]. The young reporter who interviewed me for the story found me through Google. She put “consulting” and “economic downturn” into Google and one of the first results she came across was this article I wrote in April, 2008 [READ]. With a few keystrokes, she found a unique perspective that allowed her to write an interesting article which subsequently got picked up in many major newspapers across the country.

The Internet also allows journalists in the field to submit articles and print-ready photos in a very timely manner. Print articles that are simultaneously posted online get a lot more traction than blogs (which are perceived to be of inferior quality to print publications), especially if the article makes it onto the daily roster of a major news aggregator like Digg.

Blogs Aren’t Journalism

Even though bloggers have many of the same tools at their disposal that traditional reporters do – there is a perception out there that the quality of most blogs is not up to the same standard as a newspaper or magazine. I concur. Blogs shouldn’t even try to compete with that medium. They’re something different. However, more than a few pundits have been watching the rise in popularity of blogs and forecast the demise of newspapers. Sure, the cost of production for a blog is far less than that of a newspaper but the branding that has gone into establishing newspapers is long-term and expensive. The only online publication that I’ve seen compared to real newspapers in recent years is the Huffington Post which is, in my opinion, one big op-ed paper. With the exception of technology news, real hard-hitting news is still found only in traditional newspapers.

Demographics

Generation Y/Millennials are probably not that enamoured with print publications but pretty much every previous generation (mine included) grew up with print publications. While I read online news far more often than I pick up a newspaper, my parent’s generation (the Boomers) will never be big consumers of online news. Until the Boomers stop reading newspapers entirely, that platform is unlikely to go away. Boomers also represent a much bigger base of disposable income than the more net-savvy generation.

Conclusion

I think after seeing how the Internet has been unable to kill newspapers over the past ten years, it would be safe to attribute their current woes to the economic downturn. Like other industries, these times will see closures and consolidations. These are things that happen in a free market economy. I don’t think we should waste any time bailing newspapers out. The ones that are making ends meet are tightening their belts and keeping their doors open. My friends’ newspaper – a small community paper in the Interior of BC – seems to be hanging on despite everything that’s happened. I attribute their success to his business savvy.