The newspaper industry’s slow, sometimes painful, but inevitable move to digital-only
Changes to the cost structures of the newspaper business put stresses on many papers long before the rise of the Internet, now some papers are realizing they are swimming upstream by keeping their print editions alive
The notice that The Independent will be shuttering its print edition is big news in the UK, at least judging by the paper’s more moderate or liberal newspapers. Rupert Murdoch’s Times and Sun gives it a yawn, probably rightly calculating that if a reader is on their websites they really don’t care about what’s going on at another newspaper.
That a newspaper is moving towards a digital-only future must be seen as an improvement over the alternative – being shuttered altogether. Of the three daily newspapers I worked for in the eighties and nineties – the Herald Examiner, the Outlook, The Valley Times – none exist today, and none closed at a time when going digital-only was an option.
Journalists love to point the finger at digital, specially the web, as the culprit. Damn that Internet, it’s all digital’s fault!
Too funny. Nothing could be further from the truth.
Print newspapers are dying not because readers have moved online, though that is clearly a contributing factor. Newspapers are dying for the same reasons they have always died: newspapering is a terribly expensive enterprise.
To truly understand the newspaper business you not only have to be in it, you have to open your eyes and get out of the newsroom. One walk through a printing facility gives you an idea of what an incredible effort it takes to produce a daily newspaper.
In the early eighties, the Hearst Corporation was struggling to decide what to do with its paper in Los Angeles. It was stuck. Stuck with a massive, historic building downtown, stuck with an underground printing facility so old that some of the ink stuck to the walls went back to before WWII. Should the company invest millions of dollars on new presses for a paper that was nearing 200,000 in circulation while its competitor was over 1 million?
The Internet did not pose a challenge to the Herald Examiner, but there were other competitors – the alternative weekly beat the paper with entertainment advertising, the auto traders got the private party and most of the dealership ads, ADVO offered complete market coverage through marriage mail (otherwise known as junk mail), and then there was always TV and radio.
Costs had to be cut, and service improved, so newspapers got rid of their paperboys and went with independent contractors. These delivery people never missed a paper because their bikes broke down, but they have proved far less reliable, nonetheless, with the paper no longer placed nicely on the doormat and between the screen door and front door, but thrown on the driveway as the car speeds by. With the kid next door no longer delivering the paper it became easy to call up and cancel the paper.
Print and delivery costs have always been the barrier to entry for anyone wishing to start-up a newspaper. Few did it in the old days – almost no one does it today.
Today, one trend is to outsource printing to central facilities, ones that can be used by many daily newspapers. Just four weeks ago The Toronto Star announced it would outsource the printing of the daily newspaper to Transcontinental Printing, with the obvious result that the staff would be let go.
Each day newspaper executives work to figure out how they can squeeze a few more dollars out of their print and delivery costs. This rather makes much news because one newsroom layoff hits home with journalists much quicker than word that someone who works underground has lost their job.
If rising costs and new print and broadcast competitors were threatening newspapers in the ’80s and ’90s, the Internet and the move to digital advertising has simply accelerated the pace of change in the industry. Today, weekday newspapers are thin due to the loss of print ads.
It is not so much the loss of the local advertiser that today uses AdWords, or the national advertiser on Facebook, as it is the loss of whole categories of advertisers such as grocery chains, that is threatening newspapers. Two or three decades ago the Monday paper for a major metro was thin even then. But the Wednesday or Thursday paper was massive, depending on which day the Food section ran.
For a while I was in charge of grocery advertising at the Herald Examiner and remember approaching a major grocery advertiser, begging them to run a few pages with us. “You run 16 pages of advertising every Thursday with the Times, pull just one page with them and you can run four with us” would be the sales pitch. It rarely worked (thank goodness that it did sometimes). For a while, the Food section of the LA Times was the size of a typical Sunday metro edition, all by itself. That business is basically gone. So, too, is the Sunday help-wanted.
Journalists may see readers migrating to digital, and they are, but long ago the business was altered thanks to the loss of whole categories of advertising – much of having already left the newspaper before it went online.
Advocates of print like to point out that much of the revenue earned by newspapers (and magazines) remain tied to print. The point being that as long as this is the case then print will survive.
As someone who saw their former newspaper employers close down the papers I used to work at, before the rise of the web, I simply don’t buy argument. The issue isn’t that print still generates more revenue than digital, it is that print advertising is declining and can no longer support some of the newspapers that are closing. If print is a better supporter of newspapers than digital, then the answer would be to increase print advertising – is anyone doing that? The answer, as newspaper executives know, is that costs and revenue must balance out. To do this costs must go down if revenue cannot be guaranteed to rise. The best way to do this, some have concluded, is to adopt a digital-only strategy.
One of the latest to do this was La Presse, the Quebec-based daily. The paper knew this was the direction they were heading and prepared for it. The paper launched a very nice tablet edition in the spring of 2013 and they stayed dedicated to the product, pushing it hard to readers.
The paper said it invested heavily in the product: La Presse+ represents “three years of research and development and a $40 million investment,” the paper said at launch, to the amazement of industry colleagues. That seemed like way too much to spend on what was basically just an app, some proclaimed.
But maybe it was that huge investment, an albatross around the necks of the execs, that forced them to see the experiment through. No one wants to quit early on a $40 million investment.
But a tablet app will not save any paper, so the commitment was also to a mobile app, an ad supported website strategy, and reduced costs. The final part of that equation would be, of course, shuttering the print edition, which would eliminate entirely print and delivery costs associated with the weekday paper (the paper still has a weekend edition in print).
The Independent will now try this approach. It has just launched a new mobile app, but it doesn’t sound like they have taken the same, measured approach as La Presse. The Canadian paper did not announce it would shutter its weekday print editions until two and a half years after it had launched an app edition it was satisfied with.
Further, many readers of The Independent have commented online that the paper’s website is not up to snuff, that it should have launched a new one before embarking on its digital-only strategy.
“That website needs sorting for its digital only future. Disaster zone at the moment,” one commenter said. “Agreed. It’s terrible. Their mobile site is even worse,” was the response from another.
The Independent is trying to put a good spin on the move, nonetheless:
The Independent is to become the first national newspaper title to move to a digital-only future, owners ESI Media have announced.
The move will capitalize on The Independent’s position as the fastest growing UK quality newspaper website, and will ensure a sustainable and profitable future.
One newspaper veteran even braved the comment thread on the story – which shows an unsympathetic readership – to reminisce:
A sad day. A few of us, in 1986, set out to change the newspaper industry and give the power of production to the journalists. Then the internet came long and that was the real death knell of the printed news world. But the power has moved on to the journalists and the low cost of production caused an explosion in a variety of magazines, and not newspapers as I had believed. Best of luck to the new digital Independent and to Johnson’s with the ‘i’. That really is the newspaper I wanted Today to be. Eddy Shah
Eddy Shah, it should be pointed out to US readers, launched print newspapers in the ’80s – but each of them were shuttered long before the Internet became much of a vehicle of the news.