The arrival of the Internet threatens all previous media, as the avalanche of choice in information and entertainment assails all franchises and dilutes everyone’s market share, and the cost is spread over all services, including e-mails. The newspaper, as the most technically traditional, dependent on a conversion and manufacturing process and deliverable only by an expensive and complex process, has been the most vulnerable of the old media. It still offers the editorial function (instead of an unvariegated ocean of material) and a convenient menu, and it still appeals to the many people who like to read from paper and not a screen. But the metropolitan newspaper is almost in its death throes and will remain there until its technology is uprooted from the past and replanted in the future. This will happen.
The newspaper industry’s problems were a long time developing, from before the web was a gleam in a nerd’s eye. Especially in the United States, the newspaper industry suffered from unfortunate, long-entrenched attitudes that made response to new competition more difficult. From the late Fifties, with the rise of television, newspapers were afflicted with a flickering pessimism. By the late Sixties, after many newspapers had folded, there was little newspaper competition in most American cities. The dominant titles could still reap a handsome profit, but most were afraid to raise cover prices because of the likely negative effect on circulation, and, therefore, advertising. Newspaper cover prices were almost impervious to inflation, as publishers lacked confidence in their products. The percentage of revenue U.S. newspapers derived from circulation was roughly half of the figure in the U.K., a stronger newspaper-reading culture, where there was no such reluctance to raise the cover price or, generally, to pay it.
An informal pact developed in many companies, where the management did not interfere at all in editorial matters and the journalists praised the management as ideal owners. This was like a soft-drink company where the management was uninterested in the taste of the product, or an automobile company where the management took no interest in design or quality control. It was an insane arrangement, based on the obsession with “independence” of journalists, and the philistinism and indolence of much of newspaper management.
The chains, like Gannett and Thomson, squeezed costs well, and, when pressed for improved editorial products, gave the inadequate editors more money, which itself merely reinforced weakness. The result was that in most markets, there were newspaper monopolies occupied by mediocre newspapers in which the corporate culture combined the arrogance of monopoly with the defeatism of a declining medium.
Many newspapers responded to the Internet with good sites of their own, but they were essentially teasers, designed to draw readers into the printed product. There was the constant danger of cannibalization of readership, and a slowly losing battle to produce the income that would sustain the huge overheads of newspaper presses and delivery systems. Some of the strongest local franchises, like the Washington Post, which had an impressive 860,000 circulation (a huge penetration for Washington), could hold readers and advertisers better than others.
Some other famous newspapers, like the New York Times and the Chicago Tribune, suffered from having their readership scattered widely, after it had seriously eroded in the centers of their metropolitan areas, and were also vulnerable to shareholder agitation. The Times overpaid ($1 billion) for the Boston Globe and, although it had $1 billion of advertising in the Times alone a few years ago, it has been reduced to seeking a high-yield loan from the rapacious Mexican financier Carlos Slim, and the stock price is below the cover price of the Sunday New York Times. And now it must face direct competition from News Corporation’s relaunched Wall Street Journal.
The fate of the Chicago Tribune is even sadder. A pioneering newspaper in many areas — including radio, television (WGN, for world’s greatest newspaper), and vertical integration with newsprint production — under its eccentric but brilliant owner, Col. Robert R. McCormick, the Tribune led all newspapers in the world in advertising revenues for more than 50 years. The McCormick Foundation, which inherited the controlling shareholding, allowed itself to be bullied into selling the company, and received a good offer that was grossly undercapitalized; the new owner, a real-estate developer, showed himself an inept publisher and a slow-footed asset stripper. He blundered into a bankruptcy from which he may come out not badly, but the Tribune will be a very spavined enterprise.