Thursday, December 6, 2012

Where Newspapers Are Headed ...

The Economist took at look at the newspaper industry this week.  They touched on their article from 2006, which noted the dire future of the industry (a prediction that has come true). However, their evaluation is that the future looks less grim six years on, mostly due to the advent of paywalls.

"News Adventures"
The Economist, December 8, 2012
available at
The unusual feature of newspapers, like most media, is that they have been counter-majoritarian in the past. An editor would undertake a campaign that was unpopular, and change the minds of his readers -- often if not always to the betterment of the community.  Businesspeople took note -- a successful but unpopular corporation could use the same vehicle to burnish its reputation through a media campaign -- or, better yet, avoid that problem entirely through careful advertising over time.  This created an economic link between local business and the paper, which had significant consequences.

The close connection between local businesses and a newspaper built on advertising meant many small towns had an essentially conservative institution that nonetheless valued ideas and the importance of the 1st Amendment.  The small town newspaper could therefore be an important bulwark against insularity and parochialism across the United States.

The new economic model, though, is different; it is based on subscriptions, not advertising.  The newspaper must now cater to its readers to a greater degree, and potentially their prejudices.  The Economist points to the future of newspapers as being similar to the future of radio, in a somewhat unconcerned fashion.

It is understating the matter to suggest that there are merely "critics" of the changes to radio.

Of course the counter-majoritarian feature of media in general has not gone away; the reasons businesses need to reach customers have not changed, merely the vehicle has (Google or Facebook, instead of the New York Times). However, there is a greatly diminished local element to such technologies -- one of the cast of characters in a small town, the  newspaper editor, has no analogue for a web site.

This has happened in other industries -- the local banker has been replaced with a Director of Business Development dispatched from the city, and a nurse-practicioner working at a distant HMO's facility substitutes for the local GP. The services (banking, health care, advertising) are perhaps provided more economically, but the open question is whether the community is diminished when its most powerful, insightful, and respected members, the banker, the editor and the doctor, are subjected to new economic pressures from unexpected directions. The radio model, thus, should be cause for concern for newspapers -- it may be more a poisoned chalice rather than a magical elixir.