Future of Newspapers

From: http://en.wikipedia.org/wiki/Future_of_newspapers Future of newspapers The future of newspapers has been widely debated as the industry has faced down soaring newsprint prices, slumping ad sales, the loss of much classified advertising and precipitous drops in circulation. In recent years the number of newspapers slated for closure, bankruptcy or severe cutbacks has risen— especially in the United States, where the industry has shed a fifth of its journalists since 2001. Revenue has plunged while competition from internet media has squeezed older print publishers. The debate has become more urgent lately, as a deepening recession has cut profits, and as once-explosive growth in newspaper web revenues has leveled off, forestalling what the industry hoped would become an important source of revenue. One issue is whether the newspaper industry is being hit by a cyclical trough, or whether new technology has rendered newspapers obsolete in their traditional format. To survive, newspapers are considering combining and other options, although the outcome of such partnerships has been criticised. Technological change comes to newspapers The increasing use of the internet's search function, primarily through large engines such as Google, has also changed the habits of readers. Instead of perusing general interest publications, such as newspapers, readers are more likely to seek particular writers, blogs or sources of information through targeted searches, rendering the agglomeration of newspapers increasingly irrelevant. "Power is shifting to the individual journalist from the news outlet with more people seeking out names through search, e-mail, blogs and social media," the industry publication Editor & Publisher noted in summarizing a recent study from the Project for Excellence in Journalism foundation. "When we go online," writes columnist Nicholas Kristof of The New York Times, "each of us is our own editor, our own gatekeeper." Where once the ability to disseminate information was restricted to those with printing presses or broadcast mechanisms, the internet has enabled thousands of individual commentators to communicate directly with others through blogs or instant message services. Even open journalism projects like wikipedia have contributed to the reordering of the media landscape, as readers are no longer restricted to established print organs for information. But the search engine experience has left some newspaper proprietors cold. "The aggregators and plagiarists will soon have to pay a price for the co-opting of our content," Rupert Murdoch told the World Media Summit in Beijing, China. "If we do not take advantage of the current movement toward paid content, it will be the content creators – the people in this hall – who will pay the ultimate price and the content kleptomaniacs who triumph." Critics of the newspaper as a medium also argue that while today's newspapers may appear visually different from their predecessors a century ago, in many respects they have changed little and have failed to keep pace with changes in society. The technology revolution has meant that readers accustomed to waiting for a daily newspaper can now receive up-to-the-minute updates from web portals, bloggers and new services such as Twitter. The expanding reach of broadband internet access means such updates have become commonplace for many users, especially the more affluent, an audience cultivated by advertisers. The gloomy outlook is not universal. In some countries, such as India, the newspaper remains more popular than internet and broadcast media. Even where the problems are felt most keenly, in North America and Europe, there have been recent success stories, such as the dramatic rise of free daily newspapers, like those of Sweden's Metro From: http://en.wikipedia.org/wiki/Future_of_newspapers International, as well as papers targeted towards the Hispanic market, local weekly shoppers, and so-called hyperlocal news. But these new revenue streams, such as that from newspapers' proprietary web sites, are often a fraction of the sums generated by the previous advertisement- and circulation-driven revenue streams, and so newspapers have been forced to curtail their overhead while simultaneously trying to entice new users. With revenues plummeting, many newspapers have slashed news bureaus and journalists, while still attempting to publish compelling content – much of it more interactive, more lifestyle-driven and more celebrity-conscious. In response to falling ad revenues and plunging circulation, many newspapers have cut staff as well as editorial content, and in a vicious cycle, those cuts often spur more and deeper circulation declines—triggering more loss of ad revenues. "No industry can cut its way to future success," says industry analyst John Morton. "At some point the business must improve." Overall, in the United States, average operating profit margins for newspapers remain at 11%. But that figure is falling rapidly, and in many cases is inadequate to service the debt that some newspaper companies took on during better times. And while circulation has dropped 2% annually for years, that decline has accelerated. The circulation decline, coupled with a 23% drop in 2008 newspaper ad revenues, have proven a double whammy for some newspaper chains. Combined with the current recession, the cloudy outlook for future profits has meant that many newspapers put on the block have been unable to find buyers, who remain concerned with increasing competition, dwindling profits and a business model that seems increasingly antiquated. "As succeeding generations grow up with the Web and lose the habit of reading print," noted The Columbia Journalism Review in 2007, "it seems improbable that newspapers can survive with a cost structure at least 50% higher than their nimbler and cheaper Internet competitors." The problem facing newspapers is generational: while in 2005 an estimated 70% of older Americans read a newspaper daily, fewer than 20% of younger Americans did. "It is the fundamental problem facing the industry," writes newspaper analyst Morton. "It's probably not going away. And no one has figured a way out." Financial strategies for an industry While newspaper companies continue to produce much of the award-winning journalism, consumers of that journalism are less willing to pay for it in a world where information on the web is plentiful and free. Plans for web- based subscription services have largely faltered, with the exception of financial outlets like The Wall Street Journal, which have been able to generate substantial revenues from subscribers whose subscriptions are often underwritten by corporate employers. (Subscriptions to the Journal's paid website were up 7% in 2008.) Some general-interest newspapers, even high-profile papers like The New York Times, have been forced to drop paid internet subscription services. Times Select, the Times's pay service, lasted for exactly two years before the company abandoned it. Within the industry, there is little consensus on the best strategy for survival. Some pin their hopes on new technologies such as e-paper or radical revisions of the newspaper such as the Daily Me; others, like a recent cover story in Time magazine, have advocated a system that includes both subscriptions as well as micro-payments for individual stories. In crafting a strategy in the era of burgeoning sources of information, some newspaper analysts believe the wisest move is embracing the Internet, and exploiting the considerable brand value and consumer trust that newspapers have built over decades. But revenues from online editions have come nowhere near matching previous print income from circulation and advertising sales, and many newspapers struggle to maintain their previous levels of reporting amidst eroding profits (Newspapers get only about one-tenth to one-twentieth the revenue for a web reader that they do for a print reader). From: http://en.wikipedia.org/wiki/Future_of_newspapers With profits falling, many newspapers have cut back on their most expensive reporting projects – overseas bureaus and investigative journalism. Some investigative projects often take months, with their payoff uncertain. In the past, larger newspapers often devoted a portion of their editorial budget to such efforts, but with ad dollars drying up, many papers are looking closer at the productivity of individual reporters, and judging speculative investments in investigative reports as non-essential. Some advocates have suggested that instead of investigative reports funded by newspapers, that non-profit foundations pick up the slack. The new non-profit ProPublica, a $10–million–a–year foundation devoted solely to investigative reporting and overseen by former Wall Street Journal editor Paul Steiger, for instance, hopes that its 18 reporters will be able to release their investigative reports free, courtesy of partnerships with such outlets as The New York Times, The Atlantic and 60 Minutes. The Huffington Post also announced that it would set aside funds for investigative reporting. Other industry observers are now clamoring for government subsidies to the newspaper industry. But investigative reports aside, what troubles some observers is that the reliability and accountability of newspapers is being replaced by a sea of anonymous bloggers, many with uncertain credentials and points of view. Where once the reader of a daily newspaper might consume reporting, for instance, by an established Cairo bureau chief for

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