Darren Boon
Monetary losses due to economic downturn and fall in advertising revenue – is this the death knell of the broadsheet?
Newspapers are seeing red in the U.S. The Washington Post Company newspaper division chalked up an operating loss of $US53.8 million for the first quarter of 2009. Hearst Corporation, which owns The San Francisco Chronicle, announced that the paper lost more than $US50 million in 2008 and expects the losses to widen in 2009. The Minneapolis Star Tribune, a 141 year-old newspaper and the 15th largest in the US, has filed for bankruptcy protection.
Salary, jobs and editorial: cost cutting is the mantra amongst newspapers. The New York Times has decided to axe a number of weekly sections and absorb parts of the content in other sections of the newspapers.
Some print newspapers have gone further. The Seattle Post-Intelligencer, a 146 year-old newspaper, ceased its print publication in favour of a digital news product. The Christian Science Monitor retains a weekly print edition but replaced its daily print publication with daily e-mail editions. It also maintains an online publication updated at regular intervals.
The migration of print to online certainly fuels talk about the ‘death of print’ and further exacerbated by the owners of The San Francisco Chronicle and Boston Globe threatening to shut the broadsheets down.
Prof Mitchell Stephens of New York University, Arthur L. Carter Journalism Institute, is not optimistic about the survival of print newspapers due to “more cost-effective ways in distributing journalism”.
Mr Robin Yee, an ex-journalist with The Straits Times and a global financial news agency, is more hopeful: “For most people, newspapers are just handier. No need for internet connection, battery, devices, and less strenuous to read.”
“Most people also believe in the credibility of the print product, which is often a well-established institution, and may have built a certain loyalty to it over many years,” Mr Yee added.
A senate hearing recently convened under Senator John Kerry explored the future of the newspaper industry in the U.S. Kerry asked if the U.S government should play a role in preventing the collapse of the industry.
A double whammy: economic downturn + fall in advertising
The N.A.A (Newspaper Association of America) released figures for 2008 showing that advertising revenue fell across print advertising, classifieds and even online advertising for the entire industry, down 17.7, 29.7 and 1.8 percent respectively from 2007.
The Washington Post Company newspaper division saw a 33 per cent fall in print advertising revenue in the first quarter of 2009.
Prof Stephens and fellow colleague Prof Adam L Penenberg agree that the economic downturn and fall in advertising are contributing to the monetary woes of newspapers.
Prof Penenberg said that advertising does not bring in as much revenue as it used to for newspapers: “Advertisers are fleeing print for online, but the money hasn’t followed. The recession has accentuated the problem, since advertisers are also cutting back with consumption down anyway. It’s a vicious cycle.”
Prof Stephens felt that web advertising revenue does not make up for print advertising revenue. Prof Penenberg is of the view that while newspapers could charge a high premium as they had monopoly over their readership and the target audience an advertiser desired to reach, newspapers could not do so with an online audience.
He added that the ad-unit and ad-banner system does not work, and questioned if readers would actually click on those. “The entire system has been predicated on a lie that people will be influenced by banner ads and the like. But the problem is when people are reading, they aren’t in the proper mindset to be influenced by an ad,” Prof Penenberg said.
“Ads then become nuisances, and no marketer wants their product to be viewed as nuisances,” Prof Penenberg added.
Other factors
Prof Stephens also highlighted the heightened competition from an increased supply of news on the internet. Also, younger people are turning away from print news to the worldwide web for free news. This is one reason why the newspaper industry is bleeding money.
Mr Yee, who works at Ngee Ann Polytechnic’s Film and Media School, agreed: “The young people I’ve spoken to don’t read the papers as these are too slow. They get their news online or on their phones.”
A reprieve
Meanwhile Boston Globe has avoided a closure when its unions reached an agreement with its parent company, The New York Times Company, over cost cutting measures such as pay cuts and lower contributions to health-care plans.
The future of The San Francisco Chronicle is uncertain, although Hearst said that severe cost cutting measures may ensure the survival of the newspaper.
Meanwhile The New York Times increased newsstand prices for its newspapers by 50 cents for its Monday to Saturday editions and a dollar for its Sunday editions to pass the costs onto its readers.
Look out for the next report where the writer will examine the local situation of print newspapers and the overall future of print journalism in relation to internet websites.
—–
HELP keep the voice of TOC alive!
If you like this article, please consider a small donation to help theonlinecitizen.com stay alive. Please note that we can only accept donations from Singaporeans. Thank you for your assistance.Do you have a flair for writing? Volunteer with us. Email us your full name and contact details to theonlinecitizen@gmail.com
I don’t know.. this seems more like a mantra than fact.
High salaries, high newsprint cost, and falling ad rates because of tough competition are contributing to the decline of the newspaper industry in the US.
In Singapore, a duopoly and a captive market (for the moment at least) ensure the well-being of the newspaper industry in Singapore.
SPH, it must be noted, is an organisation that goes beyond newspapers. It has a stable of viable magazines, it also earns revenue from printing, distribution, and a host of other services.
Thus, SPH’s viability will continue for a good many decades. Online media has yet to move beyond the gestation stage. It would require serious content, both in depth and width, to capture the imagination of the masses.
But in time, a great independent online newspaper will emerge in Singapore. The only trouble, it will probably be bought over by either SPH or MediaCorp and go the way of the pro-establishment media.
sorry, I was referring to this line in the article.
“Most people also believe in the credibility of the print product, which is often a well-established institution, and may have built a certain loyalty to it over many years,” Mr Yee added.
Perhaps if the US newspapers adopted a more nation building approach, they’d find unparallel growth akin to SPH?
US newspapers may diminish but not go the way of the dodo.
Those that are not viable will just have to close shop. Competition is keener,especially with the new media being the new kid on the block.
In comparison, ST is in a super safe position especially when this wealthy govt needs it to serve their exclusive idea of nation building….lol
Also does not matter if ST has rock solid ranking close to the bottom….lol
This is just competitive economics eating their way through newspapers that cannot provide value.
If they are in the newspaper industry selling newspaper, then there might be a problem.
No, the statement above is not a typo. You’ll only understand if you’re a business person.
My opinion is that newspapers will never go extinct. Companies in US are in the red due to what that had been previously said, world of economics. Singapore is a different aspect. However, papers will always have a place in society as it is a way of life. True, new media is growing around the world but it’s credibility is still as unreliable if compared to print media. People love to hold & feel their paper and enjoy columns written by their favourite writers. What these companies can do is to create legions of brand loyalty readers by promoting more of their journalists & writers. Frankly, many men in Singapore buy the New Paper for it’s sports column. What can be down is the repackaging to attract the newer generation. Also, the future will actually lead to papers being online. Don’t be surprised that in the future, you shall have to pay for your online news subscriptions. This is the future of paper companies especially with the help of E-paper.
The medium may change but the companies and the importance of news will always be needed in this world.
I dont even touch newspaper anymore, I keep update via websites, its faster & cheaper!
What about electronic ink?
I don’t think so that newspapers is becoming dodo especially Singapore’s newspaper. It is becoming a vital source of cheap free toiletry paper (can get anywhere for free) for my dog’s pooh. It should stay not for its informative value but for utility value. The value of our local newspaper is in par with that of dog’s pooh, and that’s why they are here to stay.
we stopped subscribing to ST papers about six months ago. My wife and I (we are both 63)go on line for news such as CNA, Today and ST online as well the other foreign news on line. We also go into reach.gov.sg and TOC.
I think newspapers will go extinct for sure if they are not careful. Due to handy technologies and improvements in the platforms as well as interactivity more people will go on line.
We notice there is a disturbing trend, MSM journalists are going on line to get their news. Apparently the quality of news reporting especially on local events such as AWARE saga has gone down. If this quality of reporting in terms of objectivity goes that is the beginning of the end of newspapers and if the quality go the way of some of the on-line blogs, it is definitely going the way of the DODO!
kindle to the rescue!