Wednesday, August 27, 2008

The Day the Newspapers Died


Newspaper died last week.

Specifically, at 3 a.m. Eastern Standard Time, when Barack Obama texted his selection of Joe Biden as Vice President to the world.

Now, the death of newspapers is not exactly new-news.

Newspapers have been mortally wounded for probably half a decade. Sure, they’ve tried everything from color photos to shorter stories to keep people interested. And as the squeeze continued, they’ve resorted not just to thinner pages to stay viable.

They’ve also resorted—and we are not making this up—to higher newsstand prices.

Just two weeks ago, The New York Times raised its price 25c. If you weren’t going to pay $1.25 for a weekday edition, you probably didn’t bite at $1.50, either.

No matter what they do, newspapers are going the way of the compact disk, or, before that, the long-playing record; or before that, the orchestras that played in music halls, which was how people heard new music before the phonograph came along.

And like most gray-hairs who straddle the old economy and the new, we have mixed feelings about that fact.

A weekend morning with lots of coffee, free time and all the papers we can get—The Journal, The Times, Barron’s, and especially our Newspaper of Record, the New York Post—is our idea of a good way to start the day.

So when we bicycled up to Mike’s this past Saturday morning for the papers, with the selection of Joe Biden already on our cell phone, we were looking forward to getting our hands on every paper in sight—even the Boston Globe and the Hartford Courant—to get the whole story.


And of course not one paper had it, because, the actual news was only four hours old.

Now, four hours in Internet-Time may seem like about how long the dinosaurs roamed the earth. But in Newspaper-Time, it's barely long enough to get the printing presses warmed up.

We didn't bother getting anything but the Post.

And that’s why, if it’s worth putting a date on the actual event, Saturday August 24 is probably as a good a day as any to mark the Day the Newspapers Died.



Jeff Matthews
I Am Not Making This Up

© 2008 NotMakingThisUp, LLC

The content contained in this blog represents the opinions of Mr. Matthews.
Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations. This commentary in no way constitutes investment advice. It should never be relied on in making an investment decision, ever. Nor are these comments meant to be a solicitation of business in any way: such inquiries will not be responded to. This content is intended solely for the entertainment of the reader, and the author.

11 comments:

Mark said...

As does Jeff, every day I read the New York Times, the Wall Street Journal and, of course, the paper of record (the NY Post), as well as Barrons on Saturday (albeit on line). Monday through Friday, some of this reading takes place on the #6 subway line, which-- although originating in the Bronx-- runs through some of the wealthiest, highest-demographic neighborhoods in Manhattan (which also happen to be some of the wealthiest neighborhoods in the world). Nevertheless, when I occasionally glance up from my Times (having usually read the Journal before leaving home), it absolutely ASTOUNDS me how few other people on that crowded subway car are reading a newspaper (other than a handful of folks reading the free throwaways-- "Metro" and whatever the other one is called). Certainly, I almost never see anyone under the age of 35 reading the Times or the Journal, or even the Post or Daily News. Instead, they're either listening to their Ipods, staring off into space or, occasionally, reading a book.

So yeah, I'd say the newspaper business is in trouble.

Martin said...

While newspapers as we know them continue to post declining circulation numbers, I'm guessing that there will continue to be a market for the type of information they pull together:
- Not as quick as existing internet news sources, but more thorough and more trusted;
- More local and more current than magazines; and
- With a good sports page.

While we may not be picking up a hardcopy in the near future, I think that the newspaper companies will figure out a way to earn an adequate ROI by assembling and providing information in exchange for advertising dollars (and maybe even circulation/subscriber fees).

Lyon Jewett said...

I have to agree. Newspapers died to me on June 3rd, 2007. I had moved to Baltimore and ordered the Washington Post, Baltimore Sun, and Wall St Journal.

However, every morning I opened my front door, nary a paper was in sight. My conversion to acquisition of everyday information via internet was complete.

I also began to notice that it was free and I lacked newsprint on my fingers ( which always ended up in my bathroom and on my furniture).

So I say, let the future be now and release us from this scourge that is print media!

Next up...the big networks and old main stream media.

Len said...

I've recently given up my 30 year+ subscription to the "home delivered" version of the WSJ in favor of the online version.
I think you're exactly right in your timing on this one.

Spinner said...

It depends, of course, on what you mean by "newspaper."

If you think it's ink smeared on dead trees and tossed at people's doors at 5 AM, yes, that business probably won't last a decade, except in a few niche markets.

If you think it's a group of professionals who are good at rapidly gathering, organizing and presenting information in a way that people find convenient and understandable, that business will be around as long as there are people who want or need to know things.

Stupidly, many media companies have been hacking at the newsroom -- the real wealth and value of the business -- to pay off the expenses of antiquated production and distribuition technology. They'd be far better off to sell those dead-end investments at a loss, and concentrate on cultivting the skills to produce news and distrtibute it using the new media.

cath0de said...

I am the odd 24yr old that has a subscription to 3 hardcopy papers (Barrons, Financial Times, and Chicago Suntimes).

For me, the choice between the electronic and paper version of a paper depends on the usabililty. The FT is my favorite paper, but I find that the FT website focuses too much on "front page" articles and misses out on the outstanding analysis in the hardcopy.

The WSJ does a great job with their website design, but they are one of the few.

I feel that the breakthrough for electronic media will be held back until there is a game-changing device that presents newspaper content in a cohesive mobile package. There is still a lot of value in being able to read the news without having to pull out a laptop or squint over a BB/iPhone.

Content + usability is king. The newspaper industry is going to have to harness hardware in order to regain any pricing power.

Len said...

http://aphotoeditor.com/
Not that you need further evidence of the death of the newspaper. Here's an article from a guy on the "inside" that might be of interest.

Aaron said...

I agree with Jeff's assertion that the newspaper business is "dead" to those under 40 set. I find myself reading NYT Business section on the web and get Bloomberg News To Go on my cell phone. Why anyone still reads Barron's though is beyond me! I wouldn't say this to Sam Zell at the Chicago Tribune, though (go Cubbies!).

Sivaram Velauthapillai said...

SPINNER: "Stupidly, many media companies have been hacking at the newsroom -- the real wealth and value of the business -- to pay off the expenses of antiquated production and distribuition technology. "

(NOTE: I'm in Canada but the situation is similar.)

The problem is that it is difficult to make money online. Even if you did not have the printing and distribution costs of the physical paper, the margins are very small in the online world. Part of the reason is because newspapers used to make most of their money from things like classifieds, sports, and even readers' dependence on stock price quotes. All those have moved to non-newspaper sources now, with many of them being "free" (i.e. paid through advertising or some other source.) On top of this, you have blogs, news aggregators, and various other sites using the content from news organizations without really providing much in compensation.

Let's also not forget that the vast majority of papers, particularly the smaller ones, duplicate content. Readers in the past were largely stuck with their local papers because of physical reasons but now they can read practically any website. It is quite possible to imagine a world where 100 physical newspapers are reduce to 5 or 6 popular websites--talk about consolidation on a massive scale! The duplicated content allowed the small papers to support rural journalists but that probably will be limited in the future.

Sadly this is going to lead to a decline in journalism (at least until people figure out a better business model, which can take decades.) You can already see this with the war in Georgia where everyone was picking up the same story except for a few that had journalists in that region (like NYT, CNN, etc.) Rural reporting and foreign reporting are going to be the most noticeable casulties...

Jeff Matthews said...

Sivaram Velauthapillai said:

Sadly this is going to lead to a decline in journalism (at least until people figure out a better business model, which can take decades.) You can already see this with the war in Georgia where everyone was picking up the same story except for a few that had journalists in that region (like NYT, CNN, etc.) Rural reporting and foreign reporting are going to be the most noticeable casulties...
***

Is this true? Wasn't much of the reporting on the Tibet rioting earlier this year the result of cell phones and bloggers actually on the scene?

I wonder if the democratization of the media won't lead to better and broader news coverage, than a centralized, New York Times-centric model.

JM

Sivaram Velauthapillai said...

Good point Jeff. However, I'm somewhat skeptical of amateur journalists. I'm not dissing them and I actually think they contribute an important 3rd perspective (kind of like personal investment blogs like this :) ). But the problem I see is that they can't really "cover" an event. If someone happened to be in the vicinity of some event, they will be the first, and sometimes only, source to report it (your Tibet example.) But I feel that the vast majority of news cannot be covered that way. An individual is not going to spend all his/her time travelling to a court to hear an important case for example.

Having said all that, contrary to some, I really don't think bloggers/amateurs/etc are a threat to the newspapers. The real problem for the news organizations is to figure out how to pay their journalists and infrastructure costs without their formerly lucrative classifies, auto ads, etc. It's certainly an interesting time for the nature of news...