Megan Cardle writes about the Media Death Spiral in Atlantic.com:
I think we're witnessing the end of the newspaper business, full stop, not the end of the newspaper business as we know it. The economics just aren't there. At some point, industries enter a death spiral: too few consumers raises their average costs, meaning they eventually have to pass price increases onto their customers. That drives more customers away. Rinse and repeat . . .
For twenty years, newspapers have been trying to slow the process with increasingly desperate cost cutting, but almost all are at the end of that rope; they can't cut their newsroom or production staff any further and still put out a newspaper. There just aren't enough customers who are willing to pay for their product what it costs to produce it.
The numbers seem to confirm something I've thought for a while: we're eventually going to end up with a few national papers, a la Britain, rather than local dailies. The Wall Street Journal, the Washington Post, and the New York Times (sorry, conservatives!) are weathering the downturn better than most, and it's not surprising: business, politics, and national upper-middlebrow culture. But in 25 years, will any of them still be printing their product on the pulped up remains of dead trees? It doesn't seem all that likely.
I met a freelancer this weekend who is doing all the things that most journalists did to get where they are, writing on the margins of the news business in the hopes of getting up enough of a portfolio to worm her way into the center. I wanted to give her hope . . . but the fact is, at the center there are now more existing journalists than jobs for them, meaning the outsiders have very little chance.
Maybe there will be jobs, online. But if so, more web outfits are going to have to get into the habit of paying salaries that will support an adult middle-class life. Right now, a lot of web outfits tend to churn through twenty-somethings who are also building their resumes . . . but I'm not sure how well this works in a world where a job churning out blog copy for pennies a word is the last stop in a journalistic career, rather than the first.
And here’s a rebuttal from Phil Meyer who was Washington correspondent for the Akron Beacon Journal from 1962-1966 and since 1993 has been the Knight Chair in Journalism Professor, School of Journalism and Mass Communication, University of North Carolina at Chapel Hill:
I t's baloney. Circulation is down because newspapers have finally bitten the bullet and started charging readers what the paper is worth. And it is paying off. For example, the Boston Globe shed 15.5 percent of its circulation but gained 6.7 percent in circulation revenue. That's more revenue with 15.5 percent saved on newsprint!
This will shake down to smaller audiences of dedicated and influential followers of public affairs. Papers that keep their investigative reporting, their analysis, and interpretation of local news will be able to charge a premium to the advertisers who want that group. It is a more sophisticated business model because it depends on the quality of the readership not sheer numbers.
The other good news is that some of the papers that grew circulation, e.g. the Wall Street Journal, did it by charging for web access. Paid, web-only subscribers are counted by ABC. About time!
Phil
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