Identifying Catalysts of Change in Newspaper Publishing

Instructor: Mary Matthiesen-Jones

Mary has worked around the world for over 30 years in international business, advertising, and market research. She has a Master's degree in International Management and has taught University undergraduate and graduate level courses .

When was the last time that you read any type of newspaper? Learn why the newspaper publishing industry has changed and what papers are doing to stay viable in the 21st century.

A Changing Business

Until the late 20th century, many cities had multiple papers, including both morning and evening papers. Reading a newspaper was a fixture of everyday life in the United States. But every year, there are fewer and fewer actual newspapers.

Today, people get their news from many sources. The explosion in the number of internet news sites, the growth of television news programming, and the popularity of news feeds in websites and apps like Facebook are all factors behind the erosion of traditional newspapers.

Catalysts of Change

In the last 30 years, daily newspaper circulation had dropped by almost half. There are five major catalysts are behind this decline in newspapers.

1. Cost and Revenue

Newspapers are expensive to produce. One calculation revealed that it would be cheaper to send every New York Times subscriber an e-reader than to print actual papers for them! It is not, however, just about the cost of paper and ink. Reporters, photographers, editors, electronic technicians, proofreaders, and more are all involved in the production of every story, whether it is on paper or online. Advertising is the main revenue source for newspapers and in the last ten years, it has dropped by over half as advertisers move away from print and spend more of their ad dollars online in places other than newspaper sites.

2. Television

After nearly 80 years, television remains the single most popular source of news. Today 24-hour news channels provide up-to-the-minute stories from around the world. A breaking story can appear within minutes, complete with pictures and live updates. This is a major advantage for consumers. Printed newspapers are often a day behind in publishing news. Even online newspapers still require a story to be written, proofed, and coded for online distribution, leaving them minutes, if not hours, behind TV.

3. Decreased Competition

A free and competitive press providing diverse opinions has long been a hallmark of American journalism. In the 1960s, newspapers took it upon themselves to keep struggling competitive newspapers alive by forming Joint Operating Arrangements (JOAs). These agreements allow papers to combine resources, like printing facilities, to reduce expenses. Congress passed the Newspaper Preservation Act (NPA) in 1970 to support this effort. The Act exempts the JOAs from antitrust regulation because a competitive press is in the public interest.

However, more recently two business trends in the news industry have started reducing competition.

The first is media consolidation, wherein ownership of newspapers is concentrated in the hands of a few news organizations. The Gannet Company, for example, owns over 100 newspapers across the United States. Groups owning two or more papers control nearly 85 percent of all newspaper circulation, and fewer than twenty cities have competing dailies. Few newspapers today can afford to operate independently, apart from major brands like The New York Times and papers with enormous personal wealth behind them, such as The Washington Post and The Boston Globe. Smaller papers often merge with larger ones, consolidating in order to stay alive.

The second trend is media conglomerates, which are large umbrella organizations that own multiple different types of news and entertainment businesses, not just newspapers. For example, they may own newspapers, TV and radio stations, and movie studios. Conglomerates have greater overall control of news in general, and are often more profitable because they operate with greater corporate efficiency. News Corp, for example, in just the United States alone owns The Wall Street Journal, the New York Post, Barron's, Harper Collins Publishing, Dow Jones & Company, 21st Century Fox, Fox TV (including Fox News), and parts of Hulu and Comcast. And around the world News Corp controls many other news sources, including The Times of London and various Australian newspapers. As a result of this media conglomeration, consumers aren't just facing single sources for their news, they're getting access to less diversity of opinion. It is hard for independent newspapers to compete with the power of conglomerates.

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