From bad to worse—followed by a brighter digital future?

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Image of 1860s printing press via Wikipedia.

Previously published at WGBHNews.org.

The story is changing for the struggling newspaper business. After years of bad news, we seem to be moving on to (cover your eyes) even worse news. Paid circulation, advertising revenue, and newsroom employment are plunging in ways not seen since the Great Recession.

The gory details are contained within the Pew Research Center’s latest State of the News Media report. I’m not here to tell you that there’s a silver lining—there isn’t, as I argued in this space back in January. Nevertheless, there are some intriguing findings in the report that could point the way to a better future.

Essentially, there are three major pieces of information about digital media that all of us who care about journalism need to grasp:

  • Mobile has overtaken the desktop just as surely as digital overtook print some years earlier.
  • Some digitally native news organizations, such as Vox, BuzzFeed and the now-venerable Huffington Post, are doing reasonably well, although profitability remains elusive.
  • Third-party platforms such as Facebook, Apple News, and Google AMP (for Accelerated Mobile Pages) have become immensely important for the distribution of news, especially since they handle mobile better than do the news organizations whose journalism they are repackaging.

Perhaps the greatest challenge facing journalism is that the very services that now control so much of the distribution are also the beneficiaries of most digital advertising revenue. Consider, for instance, this tidbit from the report:

Five technology and social media companies—Google, Facebook, Yahoo, Microsoft and Twitter—continue to dominate the digital advertising market, accounting for 65% of all revenue from digital advertising in 2015, or $38.5 billion out of $59.6 billion. This is slightly higher than the share generated by the top five companies in 2014 (61%).

You may find yourself scratching your head, as I did, at learning that Yahoo and Microsoft are big players in digital advertising. Otherwise, though, this all makes sense, especially with respect to Google and Facebook. Google, as we know, does not share its ad revenues with the news organizations whose content it aggregates. The idea has always been that Google drives traffic to the originating site and that it’s up to the people who run that site to take advantage of the increased traffic by selling more ads. It hasn’t worked.

The situation is slightly better with Facebook, as publishers are cutting deals with the mega-network in order to share ad revenues. But publishers get nothing when, say, a friend of yours shares a story from the Cleveland Plain Dealer.

Nicco Mele, the incoming director of Harvard’s Shorenstein Center on Media, Politics and Public Policy, said earlier this year that the balance needs to be recalibrated: “To a large extent, Facebook and Google are sucking up revenue that publishers of content should be receiving.” How and whether Facebook and Google can be pressured to share more of their revenues with news organizations is a matter for another day.

Newspapers, which are still by far the most significant producers of journalism aimed at holding government and other powerful institutions to account, are truly suffering. How bad is it? According to Pew, paid circulation, including paid digital, was down 7 percent in 2015. Total ad revenue at newspapers owned by publicly traded companies was down 8 percent, a figure that, again, includes digital.

But to my eye, what’s unspeakably ugly is how dependent newspapers remain on their print editions. Seventy-five percent of ad revenues still come from print. Print circulation in 2015 comprised 78 percent of weekday circulation and 86 percent of Sunday circulation.

This isn’t so much a matter of newspapers failing to navigate the digital transition as it is that their most loyal customers are refusing to give up print. And since those customers will, inevitably, be departing this vale of tears over the next few decades, newspapers have to figure out a way to vastly increase their digital presence in order to attract younger readers.

Very few are doing that, though the Washington Post has been notably successful on that front. At least digitally native news organizations have the advantage of not having to serve a dwindling but still-lucrative print audience at the same time they are trying to build out their digital side. But as the Pew report says, not all is well in digital news, either:

For some digital publishers, a quest for scale has resulted in annual revenue estimates in the tens of millions of dollars, bolstered in some cases by venture capital funding. Yet there is little evidence that many of these sites are profitable.

In an influential blog post seven years ago, Clay Shirky wrote, “Society doesn’t need newspapers. What we need is journalism.” If the definition of a newspaper is something made of paper, then I’d say Shirky’s moment is upon us. I’d guess that newspapers are heading toward a mostly digital future as they move away from print, even at the expense of alienating part of their aging audience. (Caveat: Ten years ago many of us, including me, thought print would be more or less gone by now. So who knows?)

Sadly, newspaper staffs will continue to shrink, and within a few years they will be digital-only except for a weekend print edition. They won’t be able to do as much as they can today, just as they can’t do as much today as they could 10 or 15 years ago. But large regional news organizations such as the Boston Globe, the Chicago Tribune, the Philadelphia Inquirer, and the Dallas Morning News will continue to provide most of the accountability journalism that their communities need.

That’s an optimistic assessment. The reality could be much worse. Let’s hope today’s newspaper leaders get tomorrow right.

2 thoughts on “From bad to worse—followed by a brighter digital future?

  1. effjay416

    A thoughtful piece. You would know better, but I still believe the customer (or user) experience is the hill news media will die on.

    I dumped the Sunday Globe because of inconsistent home delivery (and this was *before* the most recent circulation fiasco). Similarly, I can’t read several other Massachusetts newspapers — one of which I subscribe to — because of their balky, pop-up- and script-heavy sites that take too long to load. And I’m 50 years old: no way a millennial tolerates that sort of sluggishness.

    Twitter at least embeds its annoying ads in an easily scrolled-past format, and Facebook’s are relatively unobtrusive. Yahoo’s ads can take a while to load, but they’re in the margin, allowing salient content to load independently. Why can’t newspapers master this?

  2. PW

    Various local newspapers in the area had decent, fast-loading and reasonably attractive sites (Providence, Worcester to name a couple) that Gatehouse took over and made worse. Just another example of how this vulture company has had such a deleterious effect on journalism in New England (and elsewhere).
    How about taking a close look at this company, Dan?

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