Just like a horror movie where the monster keeps rising again even after the dashing hero has staked it and chopped off its head, we have the media meme that will not die: The overly simplistic view that if only newspapers in the US would have kept their focus on their loyal print audiences that everything would be sweetness and light. Instead, they poured millions of dollars down a digital rat hole and have little to show for it, we’re told by two researchers from the University of Texas.
Under the title of Reality Check, H. Iris Chyi and Ori Tenenboim of the University of Texas questions newspapers shift to digital. They write, “Underlying newspapers’ sustained enthusiasm for a digital future is a long-time (yet unchecked) assumption that print newspapers are dying.”
Politico’s Jack Shafer pounced on the research and asks: “What if, in the mad dash two decades ago to repurpose and extend editorial content onto the Web, editors and publishers made a colossal business blunder that wasted hundreds of millions of dollars?”
I’ve got a better question: What if newspaper print advertising in the US hadn’t collapsed from “$44.9 billion in 2003 to just $16.4 billion in 2014”?
The researchers point to Pew Research Center data that shows that 82 percent of newspaper revenue still comes from print. The problem with arguing that we should focus on print because that is where the majority of the money comes from is the fact that 82 percent of a ridiculously smaller pie from a decade ago doesn’t change the fact that it’s a pie that is smaller by billions with a giant bloodied B. The revenue mix doesn’t change that. The researchers point to stagnant digital revenue growth, but I can guarantee you that newspaper barons would celebrate with wanton abandon to find a floor for collapsing print ad revenue.
And while we’re looking at Pew data, here’s from the latest State of the News Media report:
Fully one-fourth of (newspaper) advertising revenue now comes from digital advertising, but not because of growth in that area: Digital advertising revenue fell 2 percent in 2015. It’s just that non-digital advertising revenue fell more, dropping 10 percent in 2015.
The researchers make passing nods to this reality, but we’re all pretty clear in the industry about the state of affairs. As Dan Kennedy says, “Print is dying; digital is no savior” for newspapers. Here’s the deal. The ship is sinking and the lifeboats are too small to carry but a handful of the imperiled passengers. That’s the reality of newspapers in 2016 and to pretend otherwise ignores the challenge we face.
The researchers want to lay the blame of the poor revenue performance of digital at the feet of poor digital products while completely ignoring the two eight hundred pound gorillas everyone knows are in the room. Google and Facebook capture the majority of digital ad dollars. It’s been that way for years now. It’s just recently become even more painful.
And let me be really clear. This report and Shafer’s cheerleading on its behalf threatens to re-open a relatively settled cultural conflict in newspapers that could de-rail serious, credible attempts to fashion a sustainable future for local newspapers and the in-depth journalism they produce. It’s not helpful during a time of severe stress in the industry, even severe by the standards of the last decade.
Blinkered by print
To be honest, this research only make sense in a world where no other media exist and puts the print and digital versions of newspapers in a grudge match against each other.
She writes: “Results indicated that the (supposedly dying) print product still reaches far more readers than the (supposedly promising) digital product in these newspapers’ home markets.” Yes, but do the two products put together reach a large part of their local audiences? And moreover, in a quickly nationlising ad market, what is the relative value of a local reader now versus ten years ago?
The researchers make the argument that print is a far superior product to digital and that is why print has a larger reach than the digital products of the newspapers they evaluated.
Let’s get real about the trajectory of newspapers in the US. Newspaper circulation per household in the US has been declining since 1947. Newspapers had an audience problem long before the internet.
Look outside the newspaper industry, and you see the real challenge. In the latest Reuters Institute Digital News Report (PDF), almost 75 percent of Americans said that they had used online and a similar, but slightly smaller, percentage used TV as a source of news in the past week, but only 25 percent said that they had used newspapers.
Across the 26 countries surveyed for the report, only 6 percent of 18 to 34 year olds reported newspapers as their main source of news, and that barely rose until you asked those above age 55, with 12 percent saying newspapers were their main source of news. That is not a mass business anymore. And can anyone credibly argue that this is a business that is not in decline? We can argue whether the decline is terminal, but trying to argue that the decline is only a supposed one, as the researchers do repeatedly, seems delusional.
The economic woes that are currently besetting newspapers were a trailing indicator, not a leading one. Employment in newspapers peaked in the early 90s, while the collapse in print advertising revenue peaked in 2005. We are almost a decade into the era of digital disruption at newspapers, and that disruption didn’t happen because newspapers foolishly shifted some of their investment to digital. The ad market shifted dramatically, and newspapers still have yet to come up with a response to that. That’s it.
The researchers’ assertion that we should super-serve print audiences and print advertising because they pay the bills is facile. It is literally like saying that we’d still have horse-drawn carriages if only carriage companies would have super-served their most loyal customers, or to bring the analogy up to date, Kodak would still have a booming film business if only they catered to the ever declining market for traditional, non-digital photography.
As Megan McArdle says, we can argue about the best response to this disruption, but to ignore that it is happening, which this research comes close to doing, isn’t the answer. As McArdle writes:
At its most basic, this sort of existential crisis presents companies with a very unpalatable choice. In the long run, your revenue will, to a virtual certainty, fall to $0. But in the meantime, you have a cash cow that will still throw off income for quite a while. Do you milk your cows until the last of the herd falls over dead?
We are all trying to grapple with serious, challenging business and social issues. Newspapers have declined, but due to their dominance in the past, they still employ the vast majority of locally-focused journalists in the US. There are no easy answers for what is going to fill that void, but ditching digital at newspapers to refocus on a declining print audience isn’t going to solve the business problems we face. And it’s not going to bring back the tens of thousands of local journalism jobs that are gone.
Let’s get back to the heavy lifting of finding new ways to support local journalism. This research is a distraction.