My Last Column On The Newspaper Industry

Author: Dave Morgan
Publication: Media Post
Published: 1/8/2009

I am not going to write about newspapers anymore. Over the past three or four years, I have devoted quite a number of my columns to issues in the newspaper industry. No more. I no longer believe that the industry is very relevant to the future and things digital. Since I prefer to write about those topics, and am also becoming more interested lately in how the Internet will reshape the television and video industries, I plan to focus my attention there. However, since I am preparing for a talk I am giving next week to a number of newspaper industry executives, I will address the subject one last time.

Earlier this week, I read two great posts related to newspapers and their current problems. The first was a story by Jack Shafer on Slate chronicling the many bold and prescient online investments that the newspaper industry made in the 1980s and 1990s, and the industry's failure to ultimately find long-term success from those efforts. As Shafer pointed out, those who believe that newspapers came late to the Internet are wrong. In fact, they were very, very early. Rather, newspapers' abysmal failure to build great businesses online was a direct result of their incredibly narrow-minded focus to make online  work within the same "locked-down" look, feel and content control paradigm of their existing print distribution model.

Newspaper executives chose to sacrifice the interests of their readers and their advertisers by their stubborn refusal to embrace the Web for what it could be -- a better and lower-cost platform for interactive delivery of local news, information and commercial communication (think Craigslist or Google) -- as compared to what they wanted it to be (a way to sell and deliver "locked-down" content products in "walled gardens") which neatly fit in their "trees to trucks" vertical monopoly mentalities. That was their death knell.

The second great post was by Mark Cuban, of Broadcast.com and Dallas Mavericks fame, on blogmaverick.com. Mark wrote about the symbiotic relationship between local print newspapers and local sports franchises and lamented that as newspapers shrunk or disappeared, local sports franchises were among those that would suffer greatly  (as a sports franchise owner, he cares about this issue a lot). As Mark noted, most of the local sports coverage currently available online is not very good, and its readership pales in comparison to the sports readership of local print newspapers. To help sustain local print newspaper coverage of pro sports into the future, Mark suggests that newspapers and professional sports franchises create cooperative-like joint ventures, where the sports franchises substantially underwrite the cost of newspaper coverage of their sports and teams. Mark argues that the investment to keep  newspapers' sports sections alive is much less than the cost to try to build entirely new media channels to recapture those audiences if the newspapers disappear. I think that Mark's idea is a great one.

Of course, as Mark recognizes, and as many of you are thinking as well, most in the newspaper industry would reject cooperative structures out-of-hand, arguing that they would threaten the wall between "church and state" and the historical impartiality of newspaper news.

I strongly disagree on both points. First, that is the way  the "newshole" has always operated -- newspapers print as much news (and news of the type) as advertisers and subscribers have paid to support. The "newshole" both predates and is preeminent over the notion of church and state. The size and structure of a daily newspaper is almost never dictated by the amount of news that occurred the day before. Rather, it is largely a function of how much advertising was sold for that day. Auto sections exist because car dealers pay for them. It's that simple. The same holds true for food sections and grocers. Mark's idea is no different.

Second, the notion that the purity of newspaper journalism is the cornerstone upon which today's great metropolitan newspapers were built is revisionist history. Most of today's great newspapers were built through achieving dominant distribution in their markets, not through delivering better journalism. Most U.S. cities used to have two or more competitive newspapers. The eventual winner was almost always the one that won on the battle on distribution or advertising, almost never on journalism. Great journalism came later. For example, the Philadelphia Inquirer didn't become a Pulitzer Prize-winning machine until after it put the Philadelphia Bulletin out of business (and we won't even get into the role that some believe that organized crime may have played in that victory). Only after that the Bulletin was gone did the Inquirer have the ability to invest outsize, monopolistic profit margins into great journalism, which is exactly what it did. The same holds true for many of what we see today as great, "journalistic," metropolitan newspapers. Pulitzers don't make great newspapers. Local distribution monopolies make great newspapers.

Why do I make these points so harshly today? Because I believe and hope that only if and when newspaper companies and their executives truly understand why their franchises are where they are today, will they be able to actually build new digital businesses that can thrive in the future. What do you think?