Bullshit about newspapers' future, dissected

Newspapers that are turning to paywall plans today are gambling on a risky revenue stream that even the experts aren't predicting will provide a replacement to their lost advertising revenues (their biggest financial problem is the rapid decline in advertising rates, not the slow decline in print circulation). It's a "well, we've got to do SOMETHING" solution, not a logical, do-the-math solution. And since since most media companies are owned by shareholders, the resulting loss of confidence could be catastrophic.

What will these media executives do when that reality hits them? When these debt-burdened chains, stripped of journalistic talent by a decade of profiteering, their web traffic reduced by 60 percent by their paid-content follies, their pockets emptied by the cost of the proprietary paywall systems offered by Journalism Online LLC and other opportunistic vendors, what will they do?...

They don't get it. They don't want to get it. And in many cases, they're literally paid not to get it.

America's journalism infrastructure - from corporate giants to non-profit foundations like the American Press Institute and the Newspaper Association of America - is funded by dying companies. So when you hear about efforts to save newspapers (and, by extension, journalism), understand that answers that don't return the possibility of double-digit profits and perpetual top-down control aren't even considered answers. They're not even considered.

They'll do anything to survive... so long as it doesn't involve change.

Posted by: Sean ROh Squashed, how I admire your immunity to sarcasm. :)

Reuters is reporting that Mort Zuckerman has dropped out of the bidding. It also reports OpenGate Capital, owner of TV Guide has dropped out. This leaves Bloomberg, and ZelnickMedia.

According to Reuters' sources BusinessWeek's parent, McGraw Hill (MHP) wants to see the magazine sold to Bloomberg, where the magazine could live on prosperously since Bloomberg is also in the financial news business.

This is what scared off OpenGate, and it will probably scare off Zelnick too.

USA Today No Longer Country's Largest Newspaper After 17% Drop In Circulation

Go long Gannett at your own peril (although the short squeeze has a little more to play out so you are probably cool for a few more days). According to the Minneapolis Star Tribune, in a memo submitted to staff on Friday, "USA Today publisher David Hunke said the average circulation at the Gannett Co.-owned newspaper was 1.88 million from April through September. That marks a loss of 398,000 copies, or 17 percent, from the same period the year before at the newspaper, which is printed on weekdays only." The reason for this unprecedented drop, which will put the paper in second position behind a growing Wall Street Journal, is the "growth of online news and the slump in travel pummel the newspaper."

The reason for the Gannett empire's continuing asset value destruction is the "while most large dailies are struggling to hold on to print subscribers and newsstand sales, USA Today is being hurt by a drop in traffic at airports and hotels, the newspaper's mainstay. It also increased the price of single copies to $1 from 75 cents last December."

http://www.zerohedge.com/article/usa-today-no-longer-countrys-largest-newspaper-after-17-drop-circulation

At least we assume that's what he's after, with this post on his personal blog, where he says Bloomberg's executives don't get the Internet:

Guest Post: The Real Reason Newspapers Are Losing Money, And Why Bailing Out Failing Newspapers Would Create Moral Hazard in the Media

By Washington’s Blog.

Conventional wisdom is that the Internet is responsible for destroying the profits of traditional print media like newspapers.

But Michael Moore and Sean Paul Kelley are blaming the demise of newspapers on simple greed.

Michael Moore said in September:

It’s not the Internet that has killed newspapers …

Instead, he said, it’s corporate greed. “These newspapers have slit their own throats,” he said. “Good riddance.”

Moore said that newspapers, bought up by corporations in the last generation, have pursued profits at the expense of news gathering. By basing their businesses on advertising over circulation, newspaper owners have neglected their true economic base and core constituency, he said…

And Moore cited newspapers like those in Baltimore or Detroit, his home town, with firing reporters that cover subjects that affect the community.

Ultimately, he said, this was self-defeating. It would be like GM deciding to discourage people from learning how to drive, he said.

“It’s their own greed, their own stupidity,” he said…

Similarly, Sean Paul Kelley writes:

Two years ago this month, the Bancroft family, majority owners of the Wall Street Journal since 1902 and proud guardians of its independence, sold their newspaper to Australian vulgarian Rupert Murdoch. It was a stunning turn of events whose significance is still coming into focus.

At the time, of course, pundits from the far left to the far right decried the sale. Murdoch would Fox-ificate the Journal, they said. He would castrate its muckraking, Pulitzer-winning tradition of investigative reporting. He would undermine the intellectual credibility of its editorial page, its stature as the nation’s leading purveyor of conservative ideas. He would use the paper’s reputation to burnish his own legacy. To protect and promote his own octopus-like global business interests. To destroy the New York Times.

Some of these predictions have come true and some have not, but one thing is undeniable: Competition between the Times and the Journal has never been more vicious than it is today. In the past year the Times has questioned the merits of an acclaimed Journal story and suggested that a right-wing agenda dictates the Journal's news coverage. Journal publisher Robert Thomson has declared that the Times is "uncomfortable about the rise of an increasingly successful rival while its own circulation and credibility are in retreat…[P]rinciple is but a bystander at The New York Times."

The Murdoch takeover marks the beginning of the end of the newspaper world as we once knew it. In the two years since the Bancrofts sold out, nearly 200 newspapers in the United States have gone under. The Rocky Mountain News, Seattle Post-Intelligencer, and Ann Arbor News are dead. The San Francisco Chronicle, Boston Globe, Atlanta Journal-Constitution, Philadelphia Inquirer, and entire Tribune chain are barely hanging on. Nearly 47,000 jobs have been lost. But under Murdoch, the Wall Street Journal is not only still publishing, but also, unbelievably, hiring.

In this oral history, based on conversations with nearly fifty people—writers, editors, and executives at the Journal, past and present; members of the publicity-shy Bancroft family (and their attorneys); financiers; and media commentators—GQ tells the story of the takeover from inside the newsroom itself. This is how it happened, and why, and in what direction the paper might be headed.—Nate Penn

http://www.gq.com/news-politics/big-issues/200912/wall-street-journal-rupert-murdoch?printable=true