The business model on which the profitable operation of corporate newspapers depends has collapsed. For once, pundits are right when they identify the "villain" as the Internet.
Damn straight it's the Internet! Yet, despite corporate forays online and corporate-backed legislative attempts to hobble the democratic power of the 'Net, these troubles are proving as hard to put back in their box as the ones Pandora unleashed upon the world.
The Great Minds of the media have certainly been trying, without much success. It figures. For a century they could do pretty well anything they liked and make money. About all that could get in the way of unlimited newspaper profit was offending advertisers. This was not a situation that fostered critical cognitive capacity on the part of newspaper executives. Perhaps this is why the ideas they come up aren’t proving to be so great.
Accordingly, the state of the business is "ugly." That’s how the Pew Research Centre put it in its 2010 "State of the News Media" report. U.S. newspaper advertising losses averaged 26 per cent in 2009, on top of cumulative losses of 23 per cent in the two previous years, Pew reported. Some 15,000 full-time U.S. newspaper reporting and editing jobs disappeared, a loss of about 30 per cent. "Even if the economy improves we predict more cuts in 2010."
The situation is likely as bad in Canada, although our secretive media corporations are less likely to come clean.
This has spurred a debate of sorts in the business. How do you get readers to pay for something they have become accustomed to getting for free?
A recent op/ed story in the Edmonton Journal plaintively called for the CanWest chain's new owners, whoever they turn out to be, "to quit giving away the product for free on the Internet." It’s safe to conclude from the story’s prominent placement this view has some official support at CanWest headquarters.
Alas, that train’s left the station. The people at Pew report that readers just won’t pay. Even among the "most loyal news consumers, only a minority (19 per cent) said they would be willing to pay for news online." This includes those who already do so!
But even if that might work, newspaper owners have decided to make a virtue of necessity and use online readership to justify high rates charged for print advertising!
Leastways, that is the most reasonable interpretation of the last couple of years of press releases from the Newspaper Audience Databank, the self-described "principal research arm of the Canadian daily newspaper industry." The goal of NADbank's twice-yearly surveys, the group explains, is "to assist in the buying and selling of newspaper advertising in Canada." In other words, to justify the cost of newspaper ads.
For many years now, NADbank has measured readership. This has some merit, although there are many who think the only truly meaningful measure is circulation, especially if it's paid for. The latter, of course, is the number of copies of a newspaper sold or delivered. The former is an estimate of the number of copies read by different people. Advertisers may be forgiven if they suspect such estimates of excessive optimism.
Yet, this is still a step away from what NADbank appears to be doing now, to wit, adding online readership to print readership to come up with a combined estimate. This leads to reporting like the following: "The number of people reading the Edmonton Journal took a healthy jump in 2009, led by the growing appeal of The Journal's online product." (Emphasis added.) "Nationally, about 14.7 million adult Canadians read either a printed or online edition of a newspaper each week in markets where a daily newspaper is available." The story notes, rather hopefully, that printed editions still have more readers than the online versions. Similar articles appear in almost every daily newspaper in Canada.
This would be fine if newspapers were only claiming to contribute to our faltering democracy. The trouble is, they're trying to justify the price of ads in print, where most of the industry’s shrinking profits remain, despite declining circulation.
No sensible advertiser should believe on-line readership justifies print advertising rates, or vice-versa.
Thinking "out of the box" is one thing. But there’s no way such hopeful interpretations of readership data can stuff the Internet genie back in the bottle.
Newspapers will have to come up with something better if they want to hang onto their advertisers. It's a sad commentary on the state of media nowadays that no paid commentator would dare reach this obvious conclusion in print.
This post also appears on David Climenhaga's blog, Alberta Diary.
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