The future of newspapers is more local. Once they divest themselves of expensive presses, unions, and other legacy line items, the actual cost of producing a local news story is low.
There's a successful business in there, just a much smaller one. In many ways, it's a return to the start of newspapers.
Well, here in Europe you're empirically being shown wrong. Local newspapers disappear the first; first step is that they're bought by a larger entity, second step is the removal of local news from them (because too expensive to write up), third step is killing them. Then, after a large brand has killed several smaller ones, they get bought by a bigger entity or go bankrupt.
I'm not sure how you can say that producing a local news story is cheap. It's very expensive on a per-reader count (which is all that matter) because there are relatively few readers. If you write a national story, you can sell it to everybody in the country. If you write a local story, you can only sell it to a subset of those people. Writing about a bake off costs the same as writing about a political debate on a national topic. It's quite obvious that writing for a small audience is a lot harder to have a positive ROI than for a large audience.
Roel, this path has already happened in the United States. In fact, we're in yet another round of consolidation where private equity groups are purchasing large stakes in the largest newspaper companies.
We're also starting to see rapidly expanding for-profit groups like Community Impact. Who would have thought that relentlessly focusing on quality content would pay off?
It's often easier to get local advertisers to buy into the idea that they'll be targeting a local audience. Why wouldn't your bake-off article example be sponsored by the local grocery store or law firm? Which local advertiser wants to appear next to the national political debate article?
That's interesting, because I always think of the Lawrence Journal World (the creator of the Django web framework) and Adrian Holovaty's excellent writeup of how they thrive by excelling at local news:
http://www.holovaty.com/writing/fundamental-change/
They did that in Ann Arbor, Michigan. The local paper is now annarbor.com. It's terrible. They don't really have any professionals left. Most of the articles are written by interns or kids right out of school with no sense of history or context, and amount to "Theirs[sic] a story here, but can't be bothered to make phone call." Ostensibly they cover my neighboring town as well, but they just run the police crime blotter and auto-post Eastern Michigan University's press releases. They are still losing a ton of money.
I just finished some customer development surveys. Few people read the local BIG paper; most get their news online and from the local papers. Pretty surprising to me, but there you go.
Regional papers rely on wire services for national stories. Thus, it doesn't matter which newspaper you read, you'll probably be reading the AP's story. You might just as easily read the "really good" original article at The New York Times (it's only a Google search away). The regionals also cover a larger geographic area which means they're getting pinched on their truly local coverage. On an average day they'll have less relevant local content than the small local paper.
The other big disadvantage of regional newspapers is that advertisers don't want to effectively throw away their ad dollars spending to buy a region when they could buy a better targeted town or neighborhood. It's just less efficient for most types of businesses.
By local BIG paper I specifically mean the Boston Globe or Boston Herald.
I would rather take out an ad in the Globe than in a bunch of smaller papers (one per town, but they are grouped under umbrella companies so it's not quite as bad as it sounds), but not if my prospects aren't going to read it.
Small regional papers may be better vectors for small regional businesses, but I would guess that Sears, Friday's and Pep Boys would also prefer to cover a larger area.
Was it easy to imagine printed news coming back before seeing the graph?
(Snark aside, it's a good point-- there must be similar graphs for the ice or telegram industries, to name two. Could make a pretty cool art installation or something.)
The really "Holy cow" bit for me is that even if you add the online revenue back in, the graph is virtually identical. If you had asked me this morning about the future of print newspapers, I would have said "Totally toast, of course, but savvy ones will move online."
If you ask me now, I'd say "Totally toast. Your children may recognize the names of a couple of them, if they happen to regularly visit one of a handful of niche websites."
Pick an industry you might think the US has largely abandoned to cheap foreign competition, like say textile manufacturing. Think all of our clothes are made in China? I'll bet you the US' textile manufacturing revenues graph looks substantially more favorable than that.
As somebody actually in the newspaper industry, I've been telling everyone who will listen for years now that the future of news does not look like newspapers, not even online ones. The idea of an "online newspaper" is like a horse-drawn carriage with mechanical horses are powered by gasoline — it obviously should be a car, but that's what you'd end up with if you were too tied to the idea of horses to let it go.
The trouble for newspapers is that they're used to having a certain scale and mode of operation. The future of news is small teams running a website with little of the ceremonious structure that defines a newspaper. As long as they're lean, they'll be able to take in enough revenue to keep writers living like writers mostly do today. But I don't think there's any way to squeeze the New York Times into that shape.
Who pays for investigative journalism in that paradigm? It sounds like the whole concept of a journalist is going out the window. It will be up to the soldier to write his own account of a battle, rather than an embedded journalist, etc, etc.
You seem to be using an extremely narrow definition of "investigative journalism." Most investigative journalism will go on about as much as it always has. Some member of the team will investigate a topic and write about it. That's what investigative journalism is.
If you specifically mean war reporting, I don't know. I suspect some kind of nonprofit will spring up to fund reports on wars, but that's contingent on it actually being something any appreciable number of people value as much as it costs.
And I'd be happy to say "Serves them right," but the real tragedy here is that with them dies the very idea that journalism is a service worth paying money for. At least we're outsourcing manufacturing to professionals...
It does serve them right. As a rule they abandoned the helm of serious journalism years ago and have largely engaged in shallow pursuits that generate easy money since then. The amount of money spent on serious journalism at newspapers engage is so incredibly tiny it might as well be non-existent.
I know a few companies with rather successfully sell "Made in USA, from USA-sourced fibers" blankets in the $200 to $2000 range. The outlook is considerably more favorable if you go after the market segment with usefully high margins vs. raw market share (see also: Apple).
Did you expect the savvy ones to be more than 50% of the players? Only a minority of them will move successfully online, but they have no one to blame but themselves. This is common with most disruptions.
So, does this graph show that companies spend the same amount of inflation-adjusted dollars on newspaper advertising as they did in 1950? Were things good back then? What happened before the 50s?
If the chart had been adjusted for population, the decline would been even more dramatic. 1950's $20B (2011) USD was in a country slightly less than half the size of the US today.
In fact, if you look at the curve from 1950-2000 you see it seems to approximately track the population growth from 1950, with a weird peak in ~1990 and trough a few years later. My hunch is that the previous state of the industry was that it reliably took in ~$130/yr/US resident (again, in current dollars) year after year. Now it takes in less than half that, and it's plummeting.