OK. The San Fran Chronicle has not very long to survive – either it gets bought (what do you think the chances are of someone buying an organisation that’s losing $50 million per year?) or shut down. The Seattle Post-Intelligencer is counting down from its 90 days: either it gets sold or shut down. More American papers are filing for bankruptcy. It’s really grim.
But papers will survive, won’t they? Well, look at those and you think: er, no. There’s a huge oversupply of news, and the internet is making it trivial for people to read content that has been produced anywhere. You wanted to read the New York Times? In the old days (pre-internet) that was hard. Now it’s trivial. And because newspapers discovered that paywalls don’t work – at least, in terms of getting the readers. (Obviously, they work in getting some money. But not really enough to cover the cost of producing them. Certainly not with the staffing levels that American newspapers enjoy.)
But, you say, surely the thing is that there’s lots of advertising to cover it once you get rid of a few excess journalist? Er, no. Here’s an article from the Wall Street Journal which is more than faintly worrying:
What does the Internet display-ad market have in common with Zimbabwe?
Both are printing nearly-limitless amounts of their main currency, vastly diminishing its value and undermining their future. The currency, for Web sites, is their ad inventory. And while Zimbabwe, under different management, can change course, the same isn’t true of the display-ad market. Web sites keep generating new content and extra pages on which ads can run.
That is why the sudden sharp weakness in online display advertising, which hit fourth-quarter revenue at companies ranging from Yahoo to Time Warner’s AOL and New York Times Co., isn’t just about a cyclical downturn caused by the recession.
Nick Carr sets it out very clearly: there’s an oversupply of news, and the market is correcting it ruthlessly. News is pretty much fungible (one of my favourite words – it means that if you have a pipe and stuff some of your supply in one end, what comes out at the other is indistinguishable. Sugar, oil and wheat are fungibles. And so, now, is news. On an internet scale:
Needless to say, the combined [news] production capacity now far, far exceeds the demand of the combined market.
n this environment, you’re about as like to be able to charge for an online news story as you are to charge for air. And the overabundance of supply means, as well, an overabundance of advertising inventory. So not only can’t you charge for your product, but you can’t make decent ad revenues either. Bad times.
And in agreement there’s this from Steve Smith, ex-editor of a Spokane paper:
If there is any good news in the inability of publishers to properly fund and supply content for existing websites, it is this: The “traditional” Internet newspaper is as doomed as the mass-market print variety. The era of the newspaper website designed for a desktop computer is passing and fast. The future, for the short-term anyway, is in mobility.
Where earlier, he says:
No organization can hold on to its information long enough to make it a viable commercial commodity in the digital world. Once published anywhere or in any way, the information is out there, for free, for everyone.
That’s axiomatic. Except perhaps it isn’t. (You can’t prove axioms, remember?) Newsday plans to try charging. Wow. The San Francisco Chronicle is toast, IMHO. The Rocky Mountain News is closing (or closed by the time you read this). (If you didn’t know, it’s Colorado’s oldest newspaper.) The Seattle Post-Intelligencer is counting down the days. Whoof.
And in the UK every single regional saw a fall in print sales. Is it chilly where you are too?
I’ll take you back to 2005, and a speech I gave to the NUJ about how technology would change journalism. Worst invention? The computer, I suggested. But when it comes to the survival of newspapers, it’s clear I was a little unambitious. The internet has blown a cold wind through hundreds of businesses. Now it’s the turn of the newspaper industry. And the wind is very cold indeed.
Carr again though has what you could call a glass-one-eights full upside:
As all that happens, market power begins – gasp, chuckle, and guffaw all you want – to move back to the producer. The user no longer gets to call all the shots. Substitutes dry up, the perception of fungibility dissipates, and quality becomes both visible and valuable. The value of news begins, once again, to have a dollar sign beside it.
Can’t wait, myself.