Thursday, 29 September 2011

The Crisis in Newspapers, and What to Do About It: From the New York Times to the Western Mail.


The Crisis in US Newspapers

The US newspaper industry is in deep crisis, but the New York Times is ahead of the pack. As a large daily with a fairly affluent national readership it has only seen a 45% drop in advertising revenues since 2006 (McChesney 2010), its print circulation has only fallen by around a quarter since 1993 (Political Calculations 2011), and although there were 200 newsroom jobs cut announced in 2008 and 2009 (Perez Pena 2009), there haven’t been any in 2010 or 2011. I’m being facetious, of course. The Times is in deep trouble: advertisers and readers are leaving in droves and the increasing revenues from its online operations are only a fraction of those it used to make in print.

But at least it actually is still in print. 300 US newspapers went under in 2009, and 150 more disappeared in 2010. Many of these were large metropolitan dailies in big cities (McChesney and Nichols 2010). Those that remain have all scaled back their operations significantly: US newsrooms have shed more than a quarter of their journalists since 2000 (Pew 2011). There are a number of reasons for this. Newspapers have traditionally made their money in two ways: by selling news to us, and selling us to advertisers. Advertisers have left newspapers in droves – overall US ad revenues fell by a quarter between 2008 and 2009 (Houston Santhanam and Rosenthiel 2011). Quite rationally, companies no longer find subsidising the news we read to be a profitable activity, and are migrating to other more lucrative markets (online search engines, social networks, classified ad websites). At the same time, we as readers no longer feel inclined to pay upfront for the news we read. The papers all put it online for free, why would we? There’s also the problem that decades of these staff cuts have left journalism severely diminished in quality and independence. Perhaps the news just isn’t worth what it used to be.

Most analysts leave the diagnosis of the problem at that, blaming inevitable and unavoidable changes in the market since the rise of the internet. But there’s another cause to this crisis, which can be located firmly in commercial management strategies, and the choices we’ve taken as societies about who owns newspapers, and how that ownership should be regulated. Even before the rise of the internet, free content, and new advertising markets, newspaper companies had been steadily cutting staff to maximise profits. Since the 1980s there’s been a trend in developed media markets towards consolidation: ever-fewer and larger companies buying up more and more papers. This was enabled by a string of governments in the US, the UK, and elsewhere caving in to pressure from industry to relax regulation on media ownership. Consolidation leads to problems with editorial independence and freedom of the press (as we’ve seen so clearly this summer with regard to Rupert Murdoch’s influence), but it also encourages these big companies to further cut staff in the name of creating efficiency savings across their media empires, and arguably to prioritise the generation of profits above the production of high quality news; to favour corporate interests over the public interest.


The Crisis in Cardiff Newspapers

I’d like to bring us across the Atlantic, now, from the heady heights of the Big Apple’s Gray Lady to the more modest charms of Cardiff’s very own Western Mail. The crisis in UK newspapers isn’t as intense as it is in the US, but the situation is getting worse, and the same underlying problems persist. We haven’t lost a newspaper in Cardiff, yet, but there are places not too far away that have. Port Talbot was one of at least 60 or so UK towns to lose its local paper between 2008 and 2009 (Greenslade 2009a).

We Cardiffians shouldn’t get complacent, either. The New York Times stats are worrying but those for our own newspapers are often worse. The advertising revenues at news conglomerate Trinity Mirror’s regional division, the parent company of the Western Mail, are down 43% since 2003 (Trinity Mirror Annual Accounts 2000-2010). The number of journalists at Media Wales, owners of the Western Mail and the Echo, WalesOnline, and a shrinking series of weekly local newspapers in South Wales has dropped from almost 700 to around 350 since 1999 – half of the journalists who produced out local and regional papers 10 years ago are now gone, and are very unlikely to be hired back (Media Wales Annual Report and Financial Statements 1999-2009).

People aren’t buying the newspaper either: since 2000 circulation has fallen by more than half, from 55,273 to 26,931 (Trinity Mirror Annual Reports and Accounts 2000-2010, and ABC Circulation Figures 2011). If sales fall in similar numbers over the next 10 years there may not be anyone left reading the Western Mail by 2021. But advertisers pay newspapers for access to readers’ eyeballs, and if we aren’t reading they have no reason to stick around. Commercial advertisers don’t subsidise coverage of Welsh politics, Welsh corruption, Welsh crime, Welsh Rugby, or even the minute details of Catherine Zeta’s summer holidays out of the goodness of their hearts. It seems reasonable to suggest that a crisis point at which it no longer seems profitable to prop up an ailing paper because of a lack of readers may mean the advertising subsidy is withdrawn before then.

And we can’t simply blame inevitable market forces, or the web, for the sorry state of our national newspaper: mismanagement by Trinity Mirror executives in London is also clearly to blame. Much of this period of declining circulation and staff cuts came at a time of extremely high profitability for Media Wales. Between 2002 and 2008 profits were incredibly high: the company consistently posted pre-tax profits of between £15m and £20m, with profit margins between 30% and 38% (Media Wales Annual Report and Financial Statements 1999-2009). Margins like this are, of course, unheard of in most healthy industries; in markets facing such steep decline they’re unheard of. At the same time as it was shedding readers at an unprecedented rate, instead of investing some of its massive profits back into journalism in the newsroom the company was cutting reporters in large numbers instead. This is a clear indication that the company is more concerned with the financial interests of shareholders and (over-paid) corporate executives than the public interest and the strength of the public sphere.


Why this is a Problem? Journalism, the Public Interest, and Democracy

All of this matters, of course, because journalism isn’t only a commercial product, it’s also essential to the health of our democracy. For most of the last century the democratic function of journalism was subsidised by commercial advertising. This subsidy has now been completely withdrawn in some places, and in others is in the process of disappearing. The public interest value of news can broadly be distilled into two main functions: information provision and critical scrutiny.

Ideally news provides us with the kind of accurate, independent, fact-checked, information we need in order to make good decisions. This has a direct practical use to us as well as less obvious, indirect, value. As well as telling us what’s going on, it defines who that “us” actually is. As well as keeping communities informed, the best news binds communities together by highlighting common concerns and facilitating discussion, disagreement, and consensus. At their best local newspapers have been agents of social cohesion as well as providers of information. At a time when levels of political and civic participation are in decline across the board, we desperately need the democratic debating chamber supplied by well-resourced local news.

Journalism also plays an incredibly important monitorial, scrutinising, role in ensuring that our elected politicians remain accountable. According to the critic and web evangelist Clay Shirky small and medium sized cities and towns across the US are sliding into “casual endemic civic corruption” because of the newspaper crisis (Greenslade 2009b). The same may be happening here in those towns and villages no longer served by the commercial local news sector. We don’t know, because in these places there are no journalists left to find out. There are also grave, and well-founded, concerns that many of those local and regional newspapers which are left may be missing such critical “watchdog” stories because so many of them are understaffed by overworked journalists.


The Proposed Solutions to the Crisis, and Why They’re Inadequate

There are a number of solutions to this crisis being suggested at the moment. Firstly, the big news conglomerates are all arguing for less strict regulation of media consolidation: this would no doubt allow the generation of some short-term profits for big media, but it would undoubtedly lead to further job cuts, less media plurality, and weaker journalism. Secondly, there are those that still hope that even though we might lose some newspapers advertisers will eventually migrate to online news. There is little evidence this will happen in sufficient volume. For example, in 2002 Trinity Mirror’s regional printed newspapers made £521.5m in profits; by 2010 they were making £298.8m (Trinity Mirror Annual Reports and Accounts 2000-2010). Steady decline in print revenues have been accompanied by some profit increases online; in 2002 the company’s local news websites were making £3.8m, and last year they made £32.4m. This is impressive growth, but it’s nowhere near enough to provide the resources needed to sustain public interest news on the scale newspapers used to provide. The US Project for Excellence in Journalism declared in 2009, “it is now all but settled that advertising revenue – the model that financed journalism for the last century – will be inadequate to do so in this one” (McChesney and Nichols 2010).

Alternatively, some news executives think that online pay walls will convince the public to stump up where advertisers won’t. This might be a viable model for suppliers of news to elite niche markets (e.g. the Financial Times, the Wall Street Journal), but there is very little evidence this it can work elsewhere. A fourth solution is that unpaid citizen journalists will fill the void left by the redundant professionals, either in the form of independent blogs, or in collaboration with smaller commercial media. I am a great supporter and believer in the democratic and democratising potential of citizen journalism, but I’m also extremely sceptical about its ability to replace what we currently understand as journalism. Accurate, fact-checked, sceptical, “fourth estate” news costs in both money and time, and its reporters also need to be supported by strong, independent, journalistic institutions which can stand up to political and corporate pressure when needed. Individual citizens lack both resources and institutional support. It also seems that news organisations are currently hoping to exploit these unpaid digital serfs, hiding behind the rhetoric of community reporting or collaborative journalism, but in reality using them as an excuse to further cut into the professional workforce.

All of these solutions are distinguished by their inability to replace the scale of journalism previously underwritten by the advertising subsidy which sustained the old business model for news. The answer to this problem, I believe, has to lie in no longer seeing this as a crisis in news business models, but instead a crisis in journalism and democracy.


The Solution that Dare Not Speak its Name: Public Subsidy and Non-Profit News

So what to do about this problem? Last summer the editor of the Western Mail called me a “one-eyed hyperbolist” with a taste for “quaint 1970s rhetoric” after I outlined the kind of critique I just did here (Ponsford, 2010). I was also accused of making criticisms without understanding the challenges faced by the industry, and without offering solutions for solving this problem. There are no simple solutions to what is an incredibly complicated problem. But we should see the US crisis, along with the warning signs on our own doorstep, as a cautionary tale. Unless we debate and discuss effective action to save journalism now, our already ailing democracy, the accountability of our politicians and business elites, and the quality of public debate will suffer, perhaps irreparably.

Over the past few years a small trickle of influential figures have come out in favour of public subsidies for the news. Just a few weeks ago one of the most influential figures in world media, the advertising mogul Sir Martin Sorrell, claimed that state subsidies were needed to protect “quality journalism” (Fenton 2011). The former editor of the Daily Mirror Roy Greenslade thinks likewise (Greenslade 2011b), as do the former editor of the Washington Post Leonard Downie Jnr. And a growing list of influential academics (Downie Jnr and Schudson 2009, Usher 2011). There will no-doubt be massive opposition to this from newspaper owners, and some journalists (for different reasons): the former largely because they fear encroachment on their territory, and the latter mainly because they fear political interference with the content of news and a loss of editorial independence. The worries about meddling from policy makers are well-founded, but not insurmountable. We have effective mechanisms in place to protect the independence of public service broadcasters, and some European countries already subsidise the press alongside their broadcast news without much problem.

What forms this public subsidy might take is a fractious and tense debate for another day. My own view is that to bail out existing local news companies would be to throw good money after bad, and would probably end up subsidising the City of London and shareholders rather than quality journalism. I favour limiting intervention to a new generation of non-profit, perhaps co-operatively-owned, news organisations, beginning with the “news holes” in areas where local newspapers have closed down.

The US academic Robert McChesney sums up the need for public subsidy for local newspapers when he argues that the news is a public good, that is, “something the public needs, but that the market can’t produce in sufficient quality” (McChesney and Nichols 2010). Another example would be public education – it benefits everyone to live in a well-educated society, even if you don’t have children currently in school. The market is in retreat from news, in many towns it has already gone. Soon it may no longer find it profitable to subsidise our local news at all. If we want to live in a functioning democracy, in which citizens are reasonably informed, and politicians are accountable to the populace, we’ll have to pay for it ourselves, indirectly, with serious and smart public subsidies designed to replace the disappearing commercial advertising subsidy.


Works Cited:

ABC Circulation Figures (2011) Audit Bureau of Circulation Certificate for the Western Mail, January-July 2011, available at http://www.abc.org.uk/Products-Services/Product-Page/?tid=20940 (last accessed September 2011)

Downie Junior, Leonard, and Schudson, Michael (2009) The Reconstruction of American Journalism, Columbia Journalism Review, 19th October, available at: http://www.cjr.org/reconstruction/the_reconstruction_of_american.php (last accessed September 2011)

Edmonds, Rick, Huskin, Emily, and Rosenthiel, Tom (2011), “Newspapers: Missed the 2010 Media Rally”, Project for Excellence in Journalism State of the News Media 2011, available at: http://stateofthemedia.org/2011/newspapers-essay/ (last accessed September 2011)

Fenton, Ben (2011) “Sorrell Urges Subsidies for Quality Journalism”, Financial Times, 16th September, available online at: http://www.ft.com/cms/s/0/fb852f32-e069-11e0-ba12-00144feabdc0.html#axzz1ZGDrAaTV (last accessed September 2011)

Greenslade, Roy (2009a) “Britain’s Vanishing Newspapers” Guardian, February 19th, available at: http://www.guardian.co.uk/media/greenslade/2009/feb/19/local-newspapers-newspapers (last accessed September 2011)

Greenslade, Roy (2009b) “British journalism is in crisis, but we are doing too little to save it”, Guardian, 24th September, available at: http://www.guardian.co.uk/media/greenslade/2009/sep/24/downturn-mediabusiness (last accessed September 2011)

McChesney, Robert (2011) “The Future of Journalism”, paper delivered to the Future of Journalism Conference, Cardiff University School of Journalism, Media and Cultural Studies

McChesney, Robert and Nichols, John (2010) The Life and Death of American Journalism, New York: Nation

Media Wales (previously Western Mail and Echo) Annual Report and Financial Statements (1999-2009), Companies House, Cardiff, available online at: http://www.levelbusiness.com/doc/company/uk/00046946

Perez Pena, Richard (2009) “Times says it will cut 100 newsroom jobs”, New York Times Media Decoder Website, October 19th, available online at: http://mediadecoder.blogs.nytimes.com/2009/10/19/times-says-it-will-cut-100-newsroom-jobs/ (last accessed September 2011)

Political Calculations Blog (2011) “Slowly Escaping New York”, April 20th, available at: http://politicalcalculations.blogspot.com/2011/04/slowly-escaping-new-york-new-york-times.html (last accessed September 2011)

Ponsford, Dominic (2010) “Editor Accuses Academic of ‘One-Eyed Hyperbole’”, Press Gazette, 21st July, available at: http://www.pressgazette.co.uk/story.asp?sectioncode=1&storycode=45735&c=1 (last accessed September 2011)

Trinity Mirror Annual Reports and Accounts (2000-2010), available online at: http://www.trinitymirror.com/investors/financial-information/ (last accessed September 2011)

Usher, Nikki (2011) “News media are targeted but audiences are not: Herbert Gans on multiperspectival journalism” Nieman Journalism Lab, March 21, available at: http://www.niemanlab.org/2011/03/news-media-are-targeted-but-audiences-are-not-herbert-gans-on-multiperspectival-journalism/ (last accessed September 2011)

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