Forum: the Future of Newspapers

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Scott Bosley, Executive Director of the American Society of Newspaper Editors:

"The word newspaper is going to disappear. We'll talk about ‘news' rather than ‘newspapers' because there are going to be so many other ways that people get their news. Newspaper companies are becoming information companies. The definition of news is broadening and the way we're delivering it is changing. The changes have been greatly accelerated by changes in advertising. Advertising has been about 80% of the revenue base of newspapers. As they look for new markets, we have to hold onto those advertisers in all the mediums they need. But we'll continue to have newspapers in print because people appreciate the way they're organized and the tactile experience. They'll be smaller, slimmer and more targeted. A lot of papers on the Web will be free, but some will be paid for."

Andrew Davis, President of the American Press Institute:

"The catalyst for our "Newspaper Next" project, which we started a little more than a year ago, was our 60th anniversary. It occurred to us that there wouldn't be a 70th anniversary if the industry that conceived and supports us didn't transform. We have crafted what we call the game plan for newspapers, to transform the industry in the next three years and beyond. The newspaper industry is about a $76 billion industry and about $7 billion is invested just in the news product. It's my firm belief that everything else out there -- network TV, local TV, the blogosphere, Rush Limbaugh, Sean Hannity, Jon Stewart -- they are all derivative of those daily newspaper reporters and editors. They start their day reading newspapers. The challenge in a free and democratic republic is to have an informed citizenry. Without that $7 billion investment, what will support that informed citizenry?

"Newspapers have three attributes that will for a time, make them still relevant. They are low-cost or no cost, they are highly portable, and you can scan through more bits of information on a printed news page faster than you can on a PC, online, on a PDA or on a cell phone. So it's a very efficient means of presenting information. The two attributes it lacks are timeliness, because it is tied to a once-a-day publishing schedule, and interactivity. If those two attributes can be solved technologically, there's a huge, robust future for newspapers."

John Kimball, Chief Marketing Officer for the Newspaper Association of America:

"This is still an extremely healthy business, not a business facing imminent doom. 85% of adults in the U.S. are either reading a newspaper every week or visiting its site. In 30 years, the Web will be a much stronger component, but you will still see a powerful print product that people want to pick up and read. There will be advances in newspaper delivery: not just Web sites, but a printed product on a notebook of some kind that you could access electronically. I assure you that [newspapers] will still be around. It's all about the audience, and that's what newspapers are selling. When you look at newspaper companies as media organizations, not just printed products, you have an audience that's growing, not shrinking."

Bob Mong, Editor of the Dallas Morning News:

"If you take a look at our company, the Dallas Morning News, what are the things that are growing the fastest? Not the Dallas Morning News you get in a bag on the lawn. That generates a few hundred million in revenues, but it's not growing fast. What is growing is Quick, a five-day-a-week free distribution paper, and Al Dia, a very serious newspaper, a Spanish publication we started a few years ago. And Dallasnews.com, which was at a couple million in revenue a few years ago, is now pushing $30 million in revenue. That's a fast growth rate. If you add up all the audiences, we have a larger audience than we had several years ago. Circulation isn't as great, but the combined audiences we are creating and keeping are better than they were. It's a really hard time for newspapers. I've been through newspaper wars here, conventional warfare, but this is a guerilla war. I thought it was hard in the 80s and 90s, but it's much harder now. The competition is everywhere. Everybody's an editor now, a distiller of information.

"I'm 57. When I was 21, about 70% of people my age read a newspaper regularly. For people my age now, it's still about the same percentage. But in the Dallas market today, only about 30% of people between 18 and 24 look at a newspaper fairly regularly. That's a 40% gap. That's not good news for the newspaper in the bag."

Alexia Quadrani, Media Analyst, Bear Stearns:

"Newspapers are still highly profitable businesses that have substantial market share in terms of overall ad spending. But the problem facing the industry is that their revenue growth is impaired; advertisers are shifting dollars away to newer media. I don't profess the demise of the newspaper industry; there's a time and a need for them. But there are real structural changes going on in the industry. There is a significant pricing gap between new media and old media. The cost to reach 1,000 people is $20 for newspapers, but just $5 for those online. Advertisers definitely have more choices today. Newspapers have a great leg up in terms of having a local sales force that can sell local advertising, and they have the content they can migrate online. And there's no question the industry is in a strong position to extend offline publications online. They're already doing that and it's very successful. But the media market online is fragmenting. Some publications have a niche, but if you just want to find out about a snowstorm in Chicago, you don't have to go to a local newspaper's Web site. There are five dozen places you can go to find out.

"It's difficult to be a public company right now, with so much pressure. The investment base has migrated to hedge funds, with a much more short-term investment strategy. Years ago it was much more long-term oriented. Now there's much more pressure on public companies to deliver good results every quarter; there's not much room to make a mistake. It's a very awkward balance when you're under pressure to deliver earnings for a quarter and you want to be investing and thinking about the long term strategy for the company."

Jeffrey Cole, Director of the Center for the Digital Future at the University of Southern California:

"Andy Grove went to the American Society of Newspaper Editors and told them [in 1999] that they had three years before their whole business would change. Well, they don't have three years, they probably have 30 years. Every time a newspaper reader dies, he will not be replaced. If you look at what it costs to produce and distribute a newspaper, there comes a time when the subscriber base can't sustain the production and distribution costs. Thirty years ago teens didn't read newspapers, but they started when they reached their 30s. Today, teens don't read newspapers and they never will. If there were a newspaper strike across America today, almost no one under the age of 30 would notice. One way things may change, and no newspaper is ready to do this yet, is for papers to focus on the editions that are profitable, like the Friday and Sunday editions, and gradually phase out the Monday, Tuesday and Saturday papers that have less advertising and less content. Eventually, you're not going to see seven-days-a-week, 365-days-a-year papers."

John Janedis, Senior Media Analyst, Wachovia Securities:

"The market doesn't look at where you are today, they look on a forward-looking basis and a backward-looking basis. Yes, the profit margins may be at 19 or 20% today, but they were in the mid 20s just a few years ago, and the trajectory is downward into the teens. Earning a Pulitzer Prize for excellent journalism doesn't translate into sales of newspapers in this environment. If newspapers were going to be at 20% [profit margins] going forward, you wouldn't have pressure from shareholders. But revenues are declining. On the positive side, the costs of newsprint are going down next year. But circulation will probably continue to decline at 1% plus per year going forward. That's why it's key for newspapers to reinvent themselves in terms of sources of revenue."

Karen Dunlap, President of the Poynter Journalism Institute:

"We will still have newspapers, but they'll probably be very different from what most of us think of now. They'll be physically smaller, as they move to what designer Mario Garcia calls the ‘compact:' a more tabloid-like, compact size. I disagree with the assumption that newspapers will die. But we need to train journalists for multimedia reporting. They need to move from being just print reporters to being comfortable taking photos and doing audio and video."