Still Fit to Print the News

from Dan Kennedy at The Guardian:

Still fit to print the news

Despite the economic tsunami and hungry web rivals, the great US newspaper apocalypse of 2009 wasn't as bad as feared

At a moment when the newspaper business is hanging by a thread, it seems strange to suggest that maybe things aren't that bad. After all, as the Newsosaur, Alan Mutter, points out, 142 American newspapers shut their doors in 2009, and nearly 15,000 jobs at US newspapers have disappeared during the past year.

Yet if you had believed the headlines, you would have expected the mediascape to look a lot worse for print.

Last December, Tribune Company, whose holdings include the Chicago Tribune and the Los Angeles Times, filed for bankruptcy. Wall Street bad boy-turned-online provocateur Henry Blodget was predicting the New York Times's parent company would run out of cash. Right on cue, the Times Company threatened to close its second largest newspaper, the Boston Globe, which at one time was projected to lose $85m this year. And Hearst similarly announced it might shutter the San Francisco Chronicle in the face of mounting losses.

As 2009 draws to a close, all of those papers are still alive, if not especially healthy. The largest papers to stop printing in 2009 were a pair of second-ranked city dailies, always vulnerable during a recession: Denver's Rocky Mountain News, which went out of business, and the Seattle Post-Intelligencer, which moved to be online-only. For most folks living in other large metropolitan areas, surprisingly little has changed.

If there are any lessons to be drawn from this state of affairs, it may be that despite wrenching changes in the newspaper business, the underlying health of newspapers is not as bad as had been supposed.

"Journalists are ... starting to discover that the industry might not be as dead as they have been portraying it to be," writes media economist Robert Picard. "A number of stories have reported that the drop in advertising due to the recession appears to be near bottom, that profits and share prices are rising, and there is no wholesale rush to the web by print newspaper readers."

In pulling together the threads for this commentary, what struck me were three themes that help explain why the dire predictions of months past did not come entirely true.

Corporate debt made many newspapers look a lot sicker than they really were

The paradigmatic company is Tribune, which had amassed $8.2bn in debt in the course of assembling a newspaper-and-broadcasting empire.

By some accounts, every one of Tribune Company's operating units would be operating in the black if it weren't for the debt under which they are staggering. As New York Times media reporter Richard Pérez-Peña wrote at the time of Tribune's bankruptcy, the typical newspaper continues to post gross profits of between 10% and 20%.

That's a margin for which bosses at supermarket chains would kill. But it's barely enough – and, in some cases, it's not enough – to cover the massive debt repayments incurred by the likes of Tribune, McClatchy and GateHouse Media. Yet, given that most newspapers are still earning more than they're spending, it makes eminent good sense for those struggling chains to keep publishing.

There are still plenty of newsroom jobs that can be eliminated

It pains me to write those words. I don't like to see fellow journalists lose their jobs, and I want my students to find gainful employment after they graduate. But the truth is that newspapers experienced an unprecedented rise in prosperity between 1960 and 2005, as former Washington Post managing editor Steve Coll pointed out in an interview with National Public Radio.

During that golden age, newspaper companies were awash in so much money that they couldn't help but invest some of it in journalism. For instance, Washington Post publisher Katharine Weymouth said following a round of cuts earlier this year that her paper still employed some 800 full-time journalists – more than double the number that worked at the Post during the Watergate glory days of the 1970s.

Thus, when a large regional paper such as the Boston Globe concentrates on its local mission and eliminates nearly all of its staff-produced international and national reporting, it is merely returning to the model that prevailed before the 1960s and 1970s. It's hardly an admission of defeat if most of the Globe's non-local stories (it still maintains a robust Washington bureau) are from the Associated Press, Reuters, the NYT and other news services.

Newspaper executives are finally coming up with innovative ideas to extract money from readers and advertisers

Here we are seeing just the bare beginnings of a trend. But if we can extrapolate it into the future, we might discern a brighter picture.

Rupert Murdoch's fulminations aside, pay walls for basic web access won't work. But readers have demonstrated some willingness to shoulder higher prices for print delivery, and to pay for enhanced electronic delivery in the form of Kindle subscriptions, iPhone applications and specialty products like Times Reader. The long-rumored Apple Tablet and other platforms represent money-making opportunities as well.

And misguided though Murdoch's crusade against free content might be, he may yet push a number of newspaper companies to cut a deal with Google's principal competitor, Microsoft's Bing, to create an online aggregator that would share advertising revenues with content-producers.

Alan Mutter warns that we shouldn't get too excited, writing: "If unbridled cost cutting and raw optimism are enough to save newspapers, they will be just fine. If it takes more than chopping expenses and praying for the economy to rebound – which seems to be the prevailing industry strategy – then, unfortunately, we haven't seen the last newspaper close."

In the long run, we are likely to see newspapers continue to shrink, break apart and close, as small, specialised websites move in on their turf. But as John Maynard Keynes observed, in the long run, we're all dead.

For the moment, it's enough to note that the Great Newspaper Apocalypse of 2009 didn't quite live up to its advance billing. That's a non-development for which we should all be grateful.