Twenty years ago this month, The New York Times entered the Internet age with a sense of optimism so naive that looking back might break your heart. “With its entry on the Web,” wrote Times reporter Peter H. Lewis, “The Times is hoping to become a primary information provider in the computer age and to cut costs for newsprint, delivery and labor.”
The Times wasn’t the first major daily newspaper to launch a website. The Boston Globe, then owned by the New York Times Co., had unveiled its Boston.com service—featuring free content from the Globe and other local news organizations—just a few months earlier. But the debut of NYTimes.com sent a clear signal that newspapers were ready to enlist in the digital revolution.
Fast-forward to 2016, and the newspaper business is a shell of its former self. Far from cutting newsprint and delivery costs, newspapers remain utterly reliant on their shrunken print editions for most of their revenues—as we have all been reminded by the Globe’s home-delivery fiasco.
Not only do newspapers remain tethered to 20th-century industrial processes such as massive printing presses, tons of paper, and fleets of delivery trucks, but efforts to develop new sources of digital revenue have largely come to naught.
Craigslist came up with a new model for classified ads—free—with which newspapers could not compete. And there went 40 percent of the ad revenue.
Digital display advertising has become so ubiquitous that its value keeps dropping. Print advertising still pays the bills, but for how much longer? The Internet has shifted the balance of power from publishers to advertisers, who can reach their customers far more efficiently than they could by taking a shot in the dark on expensive print ads. The result, according to the Newspaper Association of America (as reported by the Pew Research Center), is that print ad revenues have fallen from $44.9 billion in 2003 to just $16.4 billion in 2014, while digital ad revenues—$3.5 billion in 2014—have barely budged since 2006.
And it’s getting worse. Last week Richard Tofel, president of the nonprofit news organization ProPublica and a former top executive with The Wall Street Journal, wrote an essay for Medium under the harrowing headline “The sky is falling on print newspapers faster than you think.” Tofel took a look at the 25 largest U.S. newspapers and found that their print circulation is continuing to drop at a rapid rate, contrary to predictions that the decline had begun to level off.
There’s a bit of apples-and-oranges confusion in Tofel’s numbers. For instance, he suggests that the 140,000 paid weekday print circulation that the Globe claimed in September 2015 was somehow analogous to the 115,000 it reported during the recent home-delivery crisis. In fact, according to the Alliance for Audited Media, the Globe had 119,000 home-delivery and mail customers in September 2015. (Another 30,000 or so print newspapers were sold via single-copy sales.)
But there’s no disputing Tofel’s bottom line, which is that print circulation plunged between 2013 and 2015 at a far faster rate than had been expected. The Journal is down by 400,000; the Times by 200,000; The Washington Post and the Los Angeles Times by 100,000.
“Nearly everyone in publishing with whom I shared the 2015 paid figures found them surprisingly low,” Tofel wrote, adding that “if print circulation is much lower than generally believed, what basis is there for confidence the declines are ending and a plateau lies ahead?”
If advertising is falling off the cliff and print circulation is plummeting, then surely the solution must be to charge readers for digital subscriptions, right? Well, that may be part of the solution. But it’s probably not realistic to think that such a revenue stream will ever amount to much more than a small part of what’s needed to run a major metropolitan newspaper.
Not everyone agrees, of course. The journalist and entrepreneur Steven Brill, in a recent interview with Poynter.org, said newspaper executives find themselves in their current straits because they were not nearly as aggressive as they should have been about building paywalls around their content.
“I always had a basic view … that if you weren’t getting revenue from readers, you ultimately weren’t going to put a premium on your journalism,” said Brill, a founder of the paywall company Press Plus, which he later sold. “You couldn’t just rely on advertisers because they would then be your only real customers.”
Brill’s views are not extreme. For instance, he thinks it’s reasonable to give away five to 10 articles a month, as newspapers with metered paywalls such as the Globe and the Times do. But Brill does not mention what I think are by far the two biggest hurdles newspapers face in charging for digital content.
First, customers are already paying hundreds of dollars a month for broadband, cell service, and their various digital devices. It’s not crazy for them to think that the content should come included with that, as it does (for the most part) with their monthly cable bill. Those who wag their fingers that newspapers never should have given away their content overlook the reality that customers had none of those extra expenses back when their only option was to pay for the print edition.
Second, paywalls interfere with the way we now consume news—skipping around the Internet, checking in with multiple sources. To wall off content runs contrary not just to what news consumers want but to the sharing culture of the Internet. The Globe has had quite a bit of success is selling digital subscriptions—about 90,000, according to the September 2015 audit report. But what will happen when the paper ratchets the price up to $1 a day, as the newspaper analyst Ken Doctor recently reported for the website Newsonomics?
As I write this, I am on my way to Philadelphia, where I’ll be learning more about the transfer of that city’s newspapers—The Philadelphia Inquirer and the tabloid Daily News—to a nonprofit foundation. Ken Doctor, writing for the Nieman Journalism Lab, isn’t optimistic: “Sprinkling some nonprofit pixie dust won’t save the newspaper industry. Only new ideas can do that.”
For the beleaguered newspaper business, the walls are closing in and the oxygen is being pumped out of the room. Clay Shirky, who writes about digital culture, once said, “Society doesn’t need newspapers. What we need is journalism.”
Trouble is, 20 years after NYTimes.com staked out its home on the web, newspapers are still the source of most of the public interest journalism we need to govern ourselves in a democracy.