By Mark Rushton, Editor, Pulp & Paper International Magazine, RISI
LONDON,
June 5, 2009
(RISI) -
There is a tragedy unfolding in the US; it looks like Philadelphia is going to be the first big city on the planet that is going to be without any kind of newspaper at all in the near future - and it is not alone - other cities are hot on its heels as their newspapers also show signs of shutting up shop, including Boston, Detroit and San Francisco.
There have already been closures, the Seattle Post-Intelligencer shut earlier this year, and the Rocky Mountain News, the newspaper for Denver, Colorado also closed its doors, and the industry as a whole is in a perilous state, with well over 15,000 jobs being lost last year and 8,000 already this year.
The blame for the demise of these newspapers is being laid at various doors, obviously the Internet is a major factor but Paul Harris, writer for The Observer newspaper in the UK also states that newspapers in the US have been, and still have, the capability to be profitable, but that the creation of the huge newspaper chains have been instrumental in their demise. Harris says "The question of who killed the American newspaper industry is not a simple as that; in fact the industry has done a pretty good job of killing itself. Over the past few decades - and even today - newspapers have been profitable, often very profitable. Margins of 20% or 30% attracted large, publicly floated companies to invest. Throughout the 1980s and 1990s, old family owners or wealthy proprietors sold up, and fully fledged American capitalism moved in to create huge newspaper chains".
Harris goes on to say that this approach has ended up in disaster, and that whilst family ownership might consider any size of profit a sign of health, a modern newspaper company wants ever-increasing returns. He continues, "Thus when revenues began to fall, management tried to keep margins at the same high level by cutting costs and firing staff. And, in spite of everything, most newspapers in America today remain profitable businesses; it is just that they are not as profitable as they used to be". (Read the full article here)
Picture: iStockphoto
Not all doom and gloom
Well, things may be grim for newspapers in the US, but the good news is that despite being attacked from all sides, including the Internet, and being in the middle of an unprecedented economic storm, newspapers continue to grow in circulation on a worldwide basis, and the latest figures from the World Association of Newspapers (Wan) states that circulation grew by 1.3% globally last year.
Gavin O'Reilly, president of WAN said at the association's recent Power of Print Conference held in Barcelona: "The simple fact is that, as a global industry, our printed audience continues to grow. You might say that this growth is taking place in the developing markets of the world and masks a continued downward trend in the developed markets. And to a degree this is true, but not the whole story, as newspaper companies in these markets have embraced digital technologies to further improve their audience reach."
O'Reilly unleashed a long list of positive statistics at the conference that should stop newsprint producers from crying into their beer too much, including:
1.9 billion people read a paid for daily newspaper everyday
Newspapers reach 41% more adults in the world that the world wide web
More adults read a newspaper every day than people eat a Big Mac every year
O'Reilly also had some words for the online soothsayers, proclaiming: "This doom and gloom about our industry has largely gone unanswered is, to me, the most bizarre case of willful self-mutilation ever in the annals of industry. And it continues apace, with commentators failing to look beyond their simple rhetoric and merely joining the chorus that the future is online, online, online, almost to the exclusion of everything else. This is a mistake. This oversimplifies a rather complex issue." (Read the full report here)
A glimmer of hope
Without a doubt there are challenges ahead for newspapers, especially in the US, but it looks like lessons are being learned from its own mistakes. Clearly newspapers suit a more localized ownership approach and they should steer clear of the temptation of being part of a large conglomerate - big is not necessarily beautiful in the newspaper world. Already there are signs in the US that budding media entrepreneurs are looking to fill in the gaps; a prime example is the recently launched High Plains Daily Leader, which has gone head to head against the Southwest Times, a paper owned by a large group which has 18 titles in nine states. So, could this be the right time to see a whole host of smaller, new newspaper launches across the US? What a real injection of spirit that would be for the beleaguered newsprint industry!
As far as the rest of the world goes, newspapers have ridden plenty of technological storms over the centuries, first with radio and then television and the same old thing was being said at the launch of those new technologies, namely that ‘this is going to kill newspapers'. The fact is the newspaper is still the preferred reading of huge numbers of people; it just has to be more and more clever at reinventing itself in a bid to retain readers - and I for one will not be sacrificing my weekly or Sunday papers - life would simply not be the same without them.
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