Future of Newspapers - Technological Change Comes To Newspapers

Technological Change Comes To Newspapers

The increasing use of the internet's search function, primarily through large engines such as Google, has also changed the habits of readers. Instead of perusing general interest publications, such as newspapers, readers are more likely to seek particular writers, blogs or sources of information through targeted searches, rendering the agglomeration of newspapers increasingly irrelevant. "Power is shifting to the individual journalist from the news outlet with more people seeking out names through search, e-mail, blogs and social media," the industry publication Editor & Publisher noted in summarizing a recent study from the Project for Excellence in Journalism foundation.

"When we go online," writes columnist Nicholas Kristof of The New York Times, "each of us is our own editor, our own gatekeeper."

Where once the ability to disseminate information was restricted to those with printing presses or broadcast mechanisms, the internet has enabled thousands of individual commentators to communicate directly with others through blogs or instant message services. Even open journalism projects like Wikipedia have contributed to the reordering of the media landscape, as readers are no longer restricted to established print organs for information.

But the search engine experience has left some newspaper proprietors cold. "The aggregators and plagiarists will soon have to pay a price for the co-opting of our content," Rupert Murdoch told the World Media Summit in Beijing, China. "If we do not take advantage of the current movement toward paid content, it will be the content creators – the people in this hall – who will pay the ultimate price and the content kleptomaniacs who triumph."

Critics of the newspaper as a medium also argue that while today's newspapers may appear visually different from their predecessors a century ago, in many respects they have changed little and have failed to keep pace with changes in society. The technology revolution has meant that readers accustomed to waiting for a daily newspaper can now receive up-to-the-minute updates from web portals, bloggers and new services such as Twitter. The expanding reach of broadband internet access means such updates have become commonplace for many users, especially the more affluent, an audience cultivated by advertisers.

The gloomy outlook is not universal. In some countries, such as India, the newspaper remains more popular than internet and broadcast media. Even where the problems are felt most keenly, in North America and Europe, there have been recent success stories, such as the dramatic rise of free daily newspapers, like those of Sweden's Metro International, as well as papers targeted towards the Hispanic market, local weekly shoppers, and so-called hyperlocal news.

But these new revenue streams, such as that from newspapers' proprietary web sites, are often a fraction of the sums generated by the previous advertisement- and circulation-driven revenue streams, and so newspapers have been forced to curtail their overhead while simultaneously trying to entice new users. With revenues plummeting, many newspapers have slashed news bureaus and journalists, while still attempting to publish compelling content – much of it more interactive, more lifestyle-driven and more celebrity-conscious.

In response to falling ad revenues and plunging circulation, many newspapers have cut staff as well as editorial content, and in a vicious cycle, those cuts often spur more and deeper circulation declines—triggering more loss of ad revenues. "No industry can cut its way to future success," says industry analyst John Morton. "At some point the business must improve."

Overall, in the United States, average operating profit margins for newspapers remain at 11%. But that figure is falling rapidly, and in many cases is inadequate to service the debt that some newspaper companies took on during better times. And while circulation has dropped 2% annually for years, that decline has accelerated.

The circulation decline, coupled with a 23% drop in 2008 newspaper ad revenues, have proven a double whammy for some newspaper chains. Combined with the current recession, the cloudy outlook for future profits has meant that many newspapers put on the block have been unable to find buyers, who remain concerned with increasing competition, dwindling profits and a business model that seems increasingly antiquated.

"As succeeding generations grow up with the Web and lose the habit of reading print," noted The Columbia Journalism Review in 2007, "it seems improbable that newspapers can survive with a cost structure at least 50% higher than their nimbler and cheaper Internet competitors." The problem facing newspapers is generational: while in 2005 an estimated 70% of older Americans read a newspaper daily, fewer than 20% of younger Americans did.

"It is the fundamental problem facing the industry," writes newspaper analyst Morton. "It's probably not going away. And no one has figured a way out."