Media Blog

New York Times: ‘Collusion’ Is the Answer for Newspapers

Alternative headline: “New York Times columnist discovers law of unintended consequences. Finally.”

Times media columnist David Carr is worried about the future of newspapers and he’s discovered a villain: regulation, and its unintended consequences. He proposes the repeal of the Newspaper Preservation Act and, possibly, relaxing antitrust restrictions on newspapers:

It’s worth remembering that the regulatory apparatus governing the industry was developed back when newspapers were the dominant local ad medium, with very little competition. In recent years, the Newspaper Preservation Act has done precisely the opposite of its framers’ intention, allowing joint operating agreements that let weak papers linger and pull down the alpha papers in Detroit, Seattle, Denver and Tucson.

The Justice Department still holds that combining local dailies is anticompetitive, but if that antiquated logic continues to prevail, there won’t be much left to regulate.

John Chachas of Lazard, a financial advisory company, and Tim Rutten of The Los Angeles Times have both called for an exemption to antitrust regulations as a matter of survival. After all, they point out, there is plenty of new competition for ads and minds.

The New York Times is arguing that regulation may have negative, unforeseen consequences? Welcome to the party, guys!

But the angst and wagling over the future of newspapers remains overblown. It’s been reported that both the New York Times and the L.A. Times generate enough revenue from the websites alone now to pay for their editorial operations. The Seattle P-I looks ready to put the online-only model to the test, and so do some small-town dailies. And why not? There’s a readership out there. Nielsen reports:

… new data from Nielsen Online indicates that average monthly unique audience figures for newspaper Web sites grew by more than 7.9 million in January to 74.8 million visitors, an increase of 11.9 percent over the same period a year ago. [Note: The inauguration probably pumped up those growth numbers by quite a bit. — KDW]  These figures, which comprise home and work Internet usage, are the highest for any month since NAA began tracking these numbers in 2004.

… January also set records for active reach and page views.  More than 44 percent of all active Web users visited newspaper Web sites, an increase of 7.3 percent over the same period a year ago.  Those visitors generated more than 3.7 billion page impressions, an increase of 15.4 percent over January 2008. 

So there are about 75 million online newspaper readers. There are only about 100 million daily print readers. (Many people are in both groups, one imagines — but less than half of web users visit newspaper sites? Shocking.) Older people are getting more comfortable with digital news, and the technology for delivering it keeps getting better. Even boring old Hearst is getting into the media-reader hardware game.
I’ve long been of the opinion that the main problem with the newspaper business is that it is full of managers who, for decades, never had to think all that hard about how to make money. Most newspapers were monopolies, either run by sprawling chains or hereditary family fiefdoms, and they typically had profit margins of better than 20 percent — better than Wal-Mart, better than ExxonMobil. As recently as 2006, I was quoted a price of more than $50,000 for a full-page ad in a second-tier metro daily in the southwest — and they wonder why they’re not selling as many ads as they’d like. And many newspapers still employ significant numbers of people who add little or nothing of value to readers. That’s going to change, and the change will be good.