Newspaper journalism is a trade in decline, and it looks terminal. Figures from big publishers reveal a plummeting decline in the advertising revenues on which newspaper businesses traditionally depend.
In the US, newspapers lost around $30 billion in ad spending between 2005 and 2014, leading to savage culls of newsroom staff. At Tribune, 500 people face the chop, voluntarily or otherwise, but sacking journalists doesn’t solve the underlying problem.
At many American and European papers, print-ad revenue is heading to zero, forecasts media consultant Jim Chisholm, talking to The Economist. Faced with a dizzying and ever-expanding array of online ad competition, newspaper prices are continually falling.
So what now? Do newspapers go the way of football clubs and rely on wealthy businessmen to prop them up despite years of losses and a failed business model?
One alternative tried and tested is the paywall – forcing online viewers to pay to read the news. The Sun tried it but discovered two years later that it was not viable method.
Plan B.is “metered” paywalls that allow the reader to access a few free articles before stumping up payment. The New York Times, and the Financial Times, both appeared to thrive with this approach, thanks to their strong identity, loyal (well-heeled) readership and market presence, but most other daily newspapers trialling this approach find people read the freebies leave.
A Dutch publisher attempted to solve its financial problems by selling articles individually. It appeared to work, but the idea is likely to have limited traction for English language papers competing against thousands of free sources.
If you can’t beat ‘em, many papers are looking for ways to boost revenues with online advertising and sponsorship. The problem faced by middle-market newspapers is that the most common digital advertising available to them is “programmatic” (where digital ad impressions are bought or sold, and placed in bulky software that seeks to maximise the target audience with little regard to the outlet). The rise of ad blocking software hangs over this form of revenue, driving advertisers to invest in video and sponsored content, strong areas of readership that are not affected by ad blocking software. Unfortunately, newspaper papers find sponsored content unpalatable, and journalists lack the experience to make videos that people want to watch.
The search for a way out seems to be driving some newspapers to adopt an increasingly niche approach. If you can occupy a particular subject area that has a lot of reader interest, the thinking goes, you can lock them in. The Boston Globe is a success story of such an approach with its website dedicated to health and medicine news stories.
New ideas to save the industry as we know it will no doubt continue to be developed but time is ticking for the general interest daily newspaper, whose bosses once had a licence to print money but who now need to come up with long-lasting solutions.