Uncertain future for newspapers

[Mechanic]

The following is a transcript of a TV broadcast shown on Australia's ABC's 7.30 Report, regarding the possible future of newspapers. It is interesting if not conclusive.

Uncertain future for newspapers
Australian Broadcasting Corporation

Broadcast: 26/05/2009

Reporter: Thea Dikeos

The past year has been an ominous time for the global newspaper industry. In the United States, mastheads that have published the news for more than a century are falling into bankruptcy, going online or closing down altogether. While the global financial meltdown has hit newspapers hard, some argue the rise of the internet and the subsequent collapse of classified ad revenue poses a fundamental threat to the viability of the business model which has sustained big city newspapers for centuries.

Transcript
KERRY O'BRIEN, PRESENTER: The past year has been an ominous time for the global newspaper industry. In the United States, mastheads that have published the news for more than a century are falling into bankruptcy, going online or closing down altogether. While the global financial meltdown has hit newspapers hard, some argue the rise of the internet and the subsequent collapse of classified ad revenue poses a fundamental threat to the viability of the business model that has sustained big city newspapers for centuries. Australia is facing the same challenge, as Thea Dikeos reports.

CAMPBELL REID, GROUP EDITORIAL DIRECTOR, NEWS LTD: This is a absolutely crucial moment in the history of information.

NICK DAVIES, JOURNALIST: The business model that has sustained newspapers for all these years is broken.

THEA DIKEOS, REPORTER: It's a dire prediction, but across the world, the global financial crisis is shaking the foundations of newspapers which have been bringing the news to their readers for more than a century.

In the United States alone, during the past six months, the publisher of the 'Los Angeles Times' and the 'Chicago Tribune' has filed for bankruptcy, while even the 'New York Times' has reported record losses.

It's prompted a US Senate committee inquiry into the future of journalism.

DAVID SIMON, SCREENWRITER: High end journalism is dying in America, and unless a new economic model is achieved, it will not be reborn on the web or anywhere else.

THEA DIKEOS: In the United Kingdom, author and award winning journalist Nick Davies is concerned by reports that more than 50 local and regional newspapers have closed in the past year.

NICK DAVIES: There are newspapers are merging, and even within those newspapers which are continuing, there are journalists being sacked.

THEA DIKEOS: Big city newspapers have traditionally relied on advertising, particularly classifieds, to employ hundreds of journalists. While the global recession has seen a dramatic drop in ad revenues, what has many observers worried is the steady leeching of content and advertising to the internet.

NICK DAVIES: Over the last three or four decades, big corporations moved in, bought up newspapers and ransacked them for profit, which means that they cut the staff and increased the output, made a lot of money, but there was no spare fat left on the bone.

BRENDAN HOPKINS, CHAIRMAN, 'THE NEWSPAPER WORKS': I think we will see newspapers with us for many years, providing, as ever, we as publishers can keep the quality of our titles.

THEA DIKEOS: In Australia, the industry body says predictions of the death of newspapers are premature, citing significant differences between the newspaper market here and overseas.

BRENDAN HOPKINS: The UK's 700 miles long, 150 miles wide, it's got 14 daily newspapers. I mean, it's - by definition, you know, it's very difficult for those newspapers to get very high - very strong penetration of their markets. So, in Australian, and indeed in New Zealand, where I also have experience, you don't have those issues.

THEA DIKEOS: While Fairfax declined to be interviewed for this story, former Fairfax editor Eric Beecher believes the nation's oldest broadsheets, 'The Age' and the 'Sydney Morning Herald', are now vulnerable.

ERIC BEECHER, ONLINE PUBLISHER: Fairfax, in the last few days, have confirmed that those two newspapers are barely making a profit. When as a couple of years ago, between them they were probably making a couple of hundred million dollars a year profit.

THEA DIKEOS: Now running his own online publishing business, Eric Beecher argues the Fairfax empire has been too heavily reliant on classified advertising revenue, the so-called "rivers of gold", which are flowing onto the internet.

ERIC BEECHER: Well, I think News Limited is dealing with it far, far more intelligently. I mean, News Limited has a proprietor who loves newspapers and has worked in them all his life, and that's in stark contrast to Fairfax.

CAMPBELL REID: I think people who think that the internet is responsible for the death of newspapers are searching around and blaming the wrong person. Poor management, poor newspapers, I think are responsible for the death of some newspapers.

THEA DIKEOS: Unlike Fairfax, News Limited has the advantage of a 70 per cent share of the Australian newspaper market. Editorial doctor Campbell Reid argues News Limited has a more diverse mix of display, retail and classified advertisements.

CAMPBELL REID: Many of the newspapers that are under serious threat don't have all of that mix. They rely incredibly heavily on classifieds, or they have no classifieds and display businesses. And we have all three.

THEA DIKEOS: But the economic downturn has hit News Corp's global newspaper empire hard. Last quarter, profit collapsed by more than $267 million.

RUPERT MURDOCH, CHAIRMAN AND CHIEF EXECUTIVE, NEWS CORP (teleconference, May 7): There is no doubt that traditional newspaper business model has to change.

THEA DIKEOS: Rupert Murdoch now says 'The Age' of free online newspaper content is over, and News is considering variations on the paid online subscription version of the 'Wall Street Journal'.

CAMPBELL REID: In order to get people to pay for something, you have to offer a better service. And that's what we are focusing on: how do we take what we do now, make it better and package it and make it available in such a way that people say, "You know what, I would pay for that."

THEA DIKEOS: In the United States, some titles like the 'Seattle P-I' have gone exclusively online.

At the recent US Senate inquiry into the future of journalism, the proposition was put that all newspapers should be able to charge for internet copyright.

DAVID SIMON: The internet is a marvellous tool, and clearly it is the information delivery system of our future. But thus far, it does not deliver much for its generation of reporting. Instead it leeches that reporting from mainstream news publications. In short, the parasite is slowly killing the host.

THEA DIKEOS: David Simon is screenwriter of the critically-acclaimed TV series 'The Wire'. He's a former journalist with the 'Baltimore Sun', which he says endured cut back after cut back in journalist ranks, even when it was making a 30 per cent profit.


DAVID SIMON: So well before the arrival of the internet, as veteran reporters and home grown editors took buyouts, news beats were dropped and less and less was covered with rigour or complexity.

THEA DIKEOS: It's another day at the 'Australian' newspaper headquarters in Sydney. In the morning, the editorial staff are shaping the paper, which employs 300 journalists around the country.

Some experts argue that so-called "citizen journalists" or bloggers on the internet can't match this level of coverage or informed analysis.

NICK DAVIES: What you haven't got is citizen journalists covering the courts, or the government departments, or the police, or the hospitals, or the schools, or doing investigations. There's a massive swathe of news where citizen journalists can't do the job because they don't have the skills or the time or the resources.

ERIC BEECHER: There is no model online to fund journalism that's produced by hundreds and hundreds of journalists. And so, yes, you're right: we're in a sort of state of great flux. Everyone is grasping for what the model might be.

THEA DIKEOS: Eric Beecher has a controversial proposal: that government should subsidise quality journalism for the good of democracy

ERIC BEECHER: It's much more like the other pillars of our democracy, like the Parliament, or the courts or indeed like the arts and culture, which is actually heavily funded by government. And maybe it has to move in that direction.

DAVID SIMON: There can be no serious consideration of public funding for newspapers. High end journalism can and should bite any hand that tries to feed it and it should bite a governing hand most viciously.

THEA DIKEOS: As the afternoon deadline looms, the pressure in the news room rises, and the day will not end until late in the evening when the presses begin to role.

Are newspapers going to be around for the next 10, 15 years?

CAMPBELL REID: Absolutely.

THEA DIKEOS: 20 years?

CAMPBELL REID: Absolutely.

THEA DIKEOS: 30?

CAMPBELL REID: Ya.

THEA DIKEOS: 50?

CAMPBELL REID: Ya.

THEA DIKEOS: Even as News Limited rationalises its newspaper production in Queensland, a move which will result in an unspecified number of redundancies, Campbell Reid remains adamant the presses will continue to role.

CAMPBELL REID: There's a sweet spot about a newspaper, printed on newspaper, in your hand, that people like. So, we aren't even going to contemplate turning them off.

KERRY O'BRIEN: Well, for one, I hope he's right. Thea Dikeos with that report.

[Dave Hughes]

Interesting report.

The "credit crunch" is really putting further pressure on local newspapers which rely on people advertising jobs and houses to make ends meet.

I'm sure in the not-too-distant future we will have to pay for viewing news on the internet.

In my opinion, though it would have to be a "pay per view" rather than some subscription-based model.

[Dan Williams]

This was a great article on newspapers - a bit ironic being online dont you think?
Newspapers obviously have to rethink their economics. I could never understand the free content either. I know one paper - the Baytown Sun, maybe- that requires a subscription password to access their daily on-line edition. Of course, they still post their archives.
Hope these papers can hang on, because I like my morning edition - even without the huge classified or stock market summaries of yesteryear.