Are Newspapers Obsolete?

The Senate Commerce Committee's Subcommittee on Communications, Technology, and the Internet, chaired by Sen. John Kerry of Massachusetts, is holding hearings on what laws, if any, need to be written or changed to assist the nation's newspapers. The conclusion seems to be that nothing seems likely to help. There was a suggestion that media cross-ownership restrictions might be softened (lift the ban on common ownership of broadcast and print media in the same market.) There was even a suggestion that print media be allowed to operate as non-profit organizations, but, judging by Kerry's comments, nothing is likely to be done.

"As a means of conveying news in a timely way, paper and ink have become obsolete, eclipsed by the power, efficiency and technological elegance of the Internet," Kerry's pre-hearing statement said. He also said the emerging media industry "is going to require a new economic model, one that everyone is still trying to figure out." Almost as an afterthought, Kerry pledged to work with Senate Rules Committee Chairman Charles Schumer to ensure online journalists receive proper credentialing from the Senate's Standing Committee on Correspondents.

Early this week, the New York Times filed the required 60-day notice that it intends to close the Boston Globe, leaving much of New England without a premium newspaper. However, intensive bargaining sessions with Globe unions apparently produced about 25% of the cost savings needed to keep the paper alive and the filing has been avoided. Advertising revenue is the culprit; it has dropped dramatically nationwide and already the Rocky Mountain News and the Seattle Post-Intelligencer have ceased publishing a print edition. The latter is still published on-line. The Times itself is in danger of folding. It recently mortgaged its Manhattan headquarters and borrowed $250 million at 14% interest after a layoff of 100 newsroom staff and a 5% salary cut for the remainder. Some, but not all of the revenue decrease can be attributed to the recession. However, newspaper subscribers have been dropping their subscriptions and that means lower advertising and lower subscription revenues.

The Internet, of course, is the culprit. For the moment, it provides a better sampling of the same news more conveniently and at no cost. Nor is the TV news immune from falling ad revenues. Of course, if all the news gathering organizations fold, that leaves the Internet with nothing to report, so Kerry's comment about a "new economic model" is no help at all.

One possibility, advanced by Jim Moroney of the Dallas Morning News, is to provide temporary antitrust protection for publishers to let them band together and demand a bigger share of revenues collected by Google, AOL, Yahoo and other online news aggregators. Google, for example, paid publishers over $5 billion last year, and is developing new tools to help everyone earn more. Publishers say $5 billion was not enough.

The NewspaperDeathWatch web site keeps close track of papers that have failed since March, 2007, and those about to fail. It also references the more thoughtful articles that provide potential solutions, like Jason Pontin's blog in MIT's Technology Review titled How to Save Media and The World Editor's Forum article titled Keep Internet News Open With An Online Payment System.

The only thing that's clear is that information collection, i.e. journalism, costs money. Some means must be found to assure the flow of credible information about what's happening in the world.