Democracy & Technology Blog Good bye, local newspaper

The Rocky Mountain News published its last edition, the San Francisco Chronicle may be next and unfortunately this may be just the beginning.
Rush Limbaugh says “[w]e haven’t even gotten close to how bad it was in the 1970s. We haven’t gotten close to the recession in 1982.” Yet within the newsrooms of America it is a different story; it is a Depression for the employees of newspapers, and they are the people from whom the rest of us get the news and the spin.
Slate editor Michael Kinsely points out that

the harsh truth is that the typical American newspaper is an anachronism. It is an artifact from a time when chopping down trees was essential to telling the news, and when you couldn’t get The New York Times or The Washington Post closer to your bed than the front door, where the local paper lies, sopping wet.
The Times, The Post and a few others probably will survive. When the recession ends, advertising will come back, with fewer places to go.

Computers and the Internet have reshaped the newspaper industry as they revamped so many others, like the old locally headquartered bank or telephone company or department store. They have made it completely unnecessary to have virtually stand-alone enterprises in cities across America who can collect, print and distribute the news locally. Most of what the local newspapers publish is national and international news from a wire service or locally-produced content which could have been produced in any locality, so most of their operations are highly redundant.
It is sad to behold; but before getting too sentimental, it’s worth remembering that local newspapers are cozy little monopolies, duopolies or oligopolies. And nothing lasts forever, not even market power. Nor should it!
There will always be an appetite for local news, but a national publication can easily duplicate that with small local bureaus and regional editions.
The implication for politicians is interesting: No more threat of a local newspaper who opposes your reelection; but much harder to grab headlines, especially for the trivial stuff you do.
The consolidation of the industry was inevitable.
There is still the issue of how can even a few newspapers who survive attract sufficient revenue to remain viable. Charging subscribers is futile and unnecessary. Kinsley observes that

[n]ewspaper readers have never paid for the content (words and photos). What they have paid for is the paper that content is printed on. A week of The Washington Post weighs about eight pounds and costs $1.81 for new subscribers, home-delivered. With newsprint (that’s the paper, not the ink) costing around $750 a metric ton, or 34 cents a pound, Post subscribers are getting almost a dollar’s worth of paper free every week — not to mention the ink, the delivery, etc. The Times is more svelte and more expensive. It might even have a viable business model if it could sell the paper with nothing written on it. A more promising idea is the opposite: give away the content without the paper. In theory, a reader who stops paying for the physical paper but continues to read the content online is doing the publisher a favor.

It might seem that charging readers is essential since advertising appears to be hopeless because Internet search-related advertising is so much more efficient for advertisers.
But online newspapers can target ads to some extent. And if advertising really is capable of motivating people to buy something they did not know they wanted or thought they needed, then newspapers are in a great position to cater to potential buyers who surf the Web for news and entertainment. Just like (almost) no one buys a newspaper to look at the ads, (almost) no one visits the Web to conduct searches. They’re looking for content.
This is not the first impossible-seeming problem with monetization. There was much consternation in the airline industry following deregulation in the late 1970s over how would carriers possibly induce some travelers to pay exorbitant ticket prices while simultaneously offering the significantly lower fares needed to fill all the empty seats at the time. Robert Crandall of American Airlines came up with the frequent flyer program, which was part of the answer.
Somewhere there is a creative newspaper executive who will figure this out, too.
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ADDENDUM — James DeLong’s excellent column, “Preparing the Obituary,” appeared in The American on Mar. 3, 2009, after I wrote this post. Among other things, he notes that

The editor of the New York Times just “challenged the belief among some of the digerati that ‘information wants to be free,’ saying ‘a lot of people in the news business, myself included, don’t buy as a matter of theology that information “wants to be free.” Really good information, often extracted from reluctant sources, truth-tested, organized, and explained–that stuff wants to be paid for.'” The LA Times talked of the need for an antitrust exemption so newspapers can jointly agree to stop giving away the product, and several columnists have chimed in about the need for monetization.

Hance Haney

Director and Senior Fellow of the Technology & Democracy Project
Hance Haney served as Director and Senior Fellow of the Technology & Democracy Project at the Discovery Institute, in Washington, D.C. Haney spent ten years as an aide to former Senator Bob Packwood (OR), and advised him in his capacity as chairman of the Senate Communications Subcommittee during the deliberations leading to the Telecommunications Act of 1996. He subsequently held various positions with the United States Telecom Association and Qwest Communications. He earned a B.A. in history from Willamette University and a J.D. from Lewis and Clark Law School in Portland, Oregon.