David Warsh: Now what after newspapers' colossal business mistakes?
Bridges, roads, airports, the electricity grid, pipelines, food and fuel and water systems: all of these are underfunded to some degree. So are the myriad new arrangements, from satellites and ocean buoys to emission scrubbers and ocean barriers, required to keep abreast and cope with climate change. Which wheels will begin to get the grease in coming months? We’ll see.
At the moment I am even more interested in the well-being of social information systems Last week The Wall Street Journal announced it would reduce its print edition from four sections to two on weekdays, bringing it into line with the Financial Times. Should that be an occasion for concern? On the contrary, let me try to convince you that it is welcome news.
Although newspapers still carry crossword puzzles, comics, agony aunts, and churn out all manner of fashion magazines, they are mainly in the business of producing provisionally reliable knowledge. What’s that? I have in mind propositions on which every honest and knowledgeable person can agree.
Not so much big judgment, such whether climate change is occurring or whether Vladimir Putin is a despot, but rather ascertainable facts, beginning with what parties to various debates are saying about themselves and each other and about their pasts. These are the foundations on which big judgments are based
A case in point: almost all of what the world knows about Donald Trump, that is, that we consider that we really know, we owe to The New York Times, The Wall Street Journal, The Washington Post, the Financial Times, and various newspaper-like organizations, Bloomberg News, Politico, and The Guardian in particular. The Associated Press, Reuters and the BBC contributed a little less; magazines still less; the rest of radio and television, hardly anything at all, with the notable exception of Fox News anchor Megyn Kelly’s lead off question in the first presidential debate. Someone will prepare a list of the fifty or a hundred of the best stories of the last year, I expect. I’ll only mention a few memorable examples:
The Post’s coverage of the Trump Foundation; the Times’ many investigations, including those of his tax strategies and his practices as a young landlord; a Politico roundtable of five Trump biographers; the WSJ’s pursuit of the George Washington bridge closing, coverage that changed the course of the campaign; and the FT’s continuing emphasis on the foreign policy implications of the America election. The same thing could be said about newspapers’ coverage of Hillary Clinton.
Newspapers exist to process and assess the rival claims of experts – politicians, governments, corporations, the professoriate, pollsters, authors, whistleblowers, filmmakers, and denizens of the blogosphere. When its own claims to authority are misplaced – a spectacular example having been the Monday before the election, when newspapers were still expecting a Clinton victory – the print press and its kith and kin correct themselves (the next day) and investigate the prior beliefs that led them to error. A free and competitive press resembles the other great self-correcting systems that have evolved over centuries – democracy, markets, and science.
And as for social media, the new highly decentralized content producers, to the extent they are originators of new information, the claims made there are slowly becoming subject to the same checking and assessment routines as are claims advanced in other realms. (No, the Pope did not endorse Donald Trump.) As for intelligence services, in which the experts’ job is to know more than is public, it is the newspapers that make them less secret. More than any other institution in democratic industrial societies, newspapers produce a provisional version of the truth. So the condition of newspapers should concern us all.
In “What If the Newspaper Industry Made a Colossal Mistake?,’’ in Politico, Jack Shafer speculated recently the newspaper companies had “wasted hundreds of millions of dollars” by building out Web operations instead of investing in their print editions, “where the vast majority of their readers still reside and where the overwhelming majority of advertising and subscription revenue still come from.” As perspicacious a press critic as is writing today, Shafer was reporting on an essay by a pair of University of Texas professors, H. Iris Chyi and Ori Tenenboim, in Journalism Practice.
Chyi and Tenenboim overstated their case, I think. Those dollars invested in Web operations weren’t wasted; they had to be spent. Most newspapers, all but the WSJ, made the mistake of making their content free on the Web for several years. Only gradually did they come round to the approach the Journal had pioneered: a paywall, with some sort of a metering technology designed to encourage online subscriptions.
More serious has been the lack of thinking-out-loud about the future of those print editions. No one needs to be told that smart phones have replaced newspapers, radio, and television as the tip of the spear of news. It appears that Facebook and Twitter have supplanted cable television and radio talk shows as the dominant forum for political discussion. But newspapers haven’t gone away; indeed, by establishing beachheads for the content they produce on social media platforms, they have become more influential than ever.
The immense prestige associated with newspapers arose from the fact that for centuries they were reliable money machines, thanks to their semi-monopoly on readers’ attention. It is no longer news that the revenue model has turned upside down, Advertisers used to pay two thirds or more of the cost of publishing a successful newspaper; today it is more like a third, if that. Attention was slowly eroded away by radio, broadcast and pay television, until the invention of search-based advertising in 2002 turned decline into a seeming rout. The basic business model is still the same, as Tim Wu explains in The Attention Merchants; The Epic Scramble to Get Inside Our Heads (Knopf, 2016): “free diversion in exchange for a moment of your consideration, sold in turn to the highest-bidding advertiser.” It’s the technology that has changed.
In a world in which the gas pump starts talking to you when you pick up the hose and video commercials are everywhere online, the virtues of print are many-sided, for readers and advertisers alike. In “Why Print Still Rules,’’ Shafer laid out the case for print’s superiority as a medium – “an amazingly sophisticated technology for showing you what’s important, and showing you a lot of it.” It’s finite. It attracts a paying crowd, which is why advertisers are willing to pay more – much more – for space.
The fancy newspapers are in good shape to refurbish their printed editions. Three of the four have new owners with deep pockets. Rupert Murdoch, a maverick Australian, now a U.S. citizen, bought the WSJ in 2007; Amazon’s Jeff Bezos, thought to be the second richest American, after Bill Gates, bought the Post, in 2013; the Japanese newspaper group around Nikkei bought the FT in 2015. The NYT is the shakiest of the four, but there seems little doubt that the cousins of the Sulzberger/Ochs clan will find a suitable partner, the oft-expressed enmity of President-elect Trump notwithstanding.Fav
Pricing, meanwhile, is all over the map, as is the appropriate size of the paper edition itself. The FT delivers two sections of tightly written no-jump news over five days and a great weekend edition for $406 a year. The WSJ costs $525 a year for six days, including a first-rate weekend edition. The Times charges $980 a year for seven days a week, including a Sunday edition that contains much more content than most readers need. (Its ads bring in a ton of money.) That’s why the WSJ decision to cut back to from four to two daily sections is significant: it acknowledges the reduced but still very powerful claim of print on consumers’ ever-more stretched budget of time. It puts more pressure on the Times’s luxury brand.
It’s the regional papers that worry me, as much for their roles as distributors of news as producers of it. When the Times, WSJ and FT are placed on the stoop in the morning, my old paper, The Boston Globe, is not among them. At around $770 a year, it simply costs too much, especially considering the meager local content it provides.
Assume that the “right” price for a year of a fancy paper today is somewhere between the FT and the WSJ, at around $500 a year. At around half as much, or even $300, a print edition of the Globe would be highly attractive. My hunch is that circulation would again begin to increase, and, in the process, shore up the metropolitan area’s home-delivery network. Instead I buy digital versions of the Globe (for $208) and the Post (for $149). Want to know what a year of the print Post costs? So does the copy editor. But I stopped looking after interrogating the Web page for five minutes. Newspapers are notorious for gulling their subscribers. Not even the FT is straightforward about it.
Like the other leading papers – the Chicago Tribune, Los Angeles Times, Philadelphia Inquirer, and Baltimore Sun – the Globe was sold for a song to a non-newspaper owner in the course of the panic that followed the advent of search advertising in 2002.
These publishers no longer seem to see themselves as part of an industry that was quite tight-knit before the fall. That’s another disadvantage with which the big national dailies must cope. For many years, newspaperfolk considered that their businesses were mostly exempt from the laws of supply and demand. Price cuts play a big part in the lore of its past. Today, the future of the industry depends on the recognition that price/performance is everything.
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Around two years ago, I began to think it was fairly likely that a Republican would win the election in 2016. So I am not altogether surprised that this has turned out to be the case. I am, however, astonished that it is Donald Trump who has been selected to provide the zig to President Obama’s zag. The Republicans found their crossover voters elsewhere.
Trump breaks promises as easily as he makes them. Look past his odious qualities (not easy to do) and you’ll see that among the policies he seems likely to embrace are several that GOP conservatives have refused to permit the Democrats to carry out. Trump apparently favors a big jobs bill, a $1 trillion stimulus; let’s see what the Tea Party-goers say now about the national debt. He is a realist in foreign relations, likely to stop baiting Russia with NATO enlargement and the threat of intervention in Syria. At least in his personal views, he has been a social liberal. His position will probably swing round even on climate change, as the trends continue to become more clear. The Supreme Court? He could challenge his uneasy Republican allies in Congress by re-nominating Judge Merrick Garland if he were interested in governing instead of showing off.
Trump has reinvented himself several times before. Now that he is president-elect, he will try to do it again. This time I very much doubt that he will be successful. Nothing in his background prepared this dubious projector for the presidency. This time Trump won’t escape his past.
David Warsh, a longtime financial columnist and economic historian, is proprietor of economicprincipals.com, where this originated.