The Fading Newspaper

Newspapers - large

There were 1,878 American newspapers in 1940. Now, there are about 1,400. As the newspaper business fades, the civic discourse it has led is being reshaped. The industry’s revenue has fallen by more than a third since 2005, its best year, when sales reached $60.2 billion. Newsrooms are shrinking and most papers are printing less news. Today, newspapers employ roughly a third fewer professionals than they did at their peak in 1989. In other ways, journalism is booming. There’s been a proliferation of professionally produced blogs, including those from established media companies, that draw big audiences, and the explosion in social media means news can circulate ever more widely. That’s helped to add 5,000 new jobs to the profession. Even so, online readers are less valuable to advertisers. The industry’s business model is in flux and so are its principles and practices.

The Situation

Since 2011, prominent papers like the New York Times, the Washington Post and the Chicago Tribune have started digital subscription plans in hopes that readers would pay to preserve traditional news gathering. At the Times, over 800,000 readers did, though it is unclear how much more growth its plan can continue to yield; on Oct. 1 it announced it would eliminate 100 newsroom jobs. Now, about 41 percent of U.S. papers charge online. Even so, today’s leading news operations include digital-only outlets without paywalls such as Yahoo, which recently hired a clutch of high-priced journalists, and Politico, which wields influence in Washington. Startups like BuzzFeed have aimed to capture a socially driven audience and also to create a business model based on ads made to resemble the site’s own content. The New York Times started a similar program. Traditional news brands still attract billionaire buyers, including Warren Buffett and Amazon.com founder Jeff Bezos, whose $250 million purchase of the Washington Post, owned for 80 years by the Graham family, symbolized a changing of the guard. In September Bezos replaced the last Graham-family top executive with a veteran of Politico. Under Bezos, the Post was expanding its budget and staff. Media companies like Gannett Inc., publisher of USA Today, have taken to splitting off declining newspaper businesses in favor of faster-growing TV assets. The founder of E-Bay, Pierre Omidyar, is funding his own news startup. Even the royal family of Qatar has a news company in Al Jazeera, now available on U.S. cable television. Locally focused newspapers had suffered with the rise of Craigslist, which sopped up classified advertising, and still haven’t bounced back. The effort by AOL to capitalize on local news led to large losses; the company gave up control of Patch‘s 900 sites after spending $300 million. Much of the world has seen similar trends, as in the U.K., Europe, and Australia. In Asia, however, newspapers are holding up nicely.

Source: Newspaper Association of America
Source: Newspaper Association of America

The Background

Newspapers have been under assault from other news providers since the age of radio. They nonetheless grew in size and importance, epitomized by the Washington Post’s seminal reporting on the Watergate break-in, and the New York Times’s publication of the Pentagon Papers. When the commercial Internet took off in the late 1990s, however, news became codified by interest, and partisan blogs like the Drudge Report and the Huffington Post grew popular. Challenging the idea of political and ideological neutrality as a framework for news, point-of-view reporting has inspired a breed of journalists who brandish their affiliations openly. Conglomerates have declined in favor of stand-alone proprietors as companies like News Corp., Tribune Co. and the New York Times Co. have cleaved off many or all of their newspapers.

The Argument

The decline of newspapers has provoked a debate over whether something essential to democracy is being lost or if something better will arise from the confusion. In the past, prominent whistle-blowers like Daniel Ellsberg, source of the Pentagon Papers, tended to work with reporters for big papers. That still happens, but spectacular revelations in 2013 about the U.S. government’s electronic surveillance of telephone and Internet records arose from a leak by a government worker to Glenn Greenwald, an independent journalist who has been a fierce critic of the U.S. government. Greenwald says his openness about his opinions makes him a more reliable source of information than those affecting impartiality. Others argue that each approach has strengths and weaknesses and call for more blending of the two.

The Reference Shelf

First Published Jan. 16, 2014

To contact the editors responsible for this QuickTake:

Sarah Rabil at srabil@bloomberg.net

Jonathan I. Landman at jlandman4@bloomberg.net