The Economist: "The rebirth of the news business" without traditional media?

Survey statistics from the American Society of Newspaper Editors (ASNE) and information from consultants OC&C are used to build a picture of a fading industry: last month, the former said that newsroom unemployment in the States had reached a 30-year low, while the latter calculated that 70 British local newspapers have disappeared since the beginning of 2008. Of course, the trend is not limited to Anglo-speaking countries, with the press in France and Spain, for example, also suffering: "French newspapers have avoided the same fate only by securing an increase in their already hefty government subsidies," notes the Economist, with regards to a 600 million euro government bail-out.

News consumption is changing, says the Economist, talking about a study carried out by the Pew Research Centre, in which for the first time in 2008, internet overtook print as the primary news source. Robert Thomson, editor-in-chief of the Wall Street Journal, is cited as saying that online news has come to be viewed as "an all-you-can-eat buffet for which you pay a cable company the only charge."

Traditional news outlets, including print and broadcast, as well the original "internet pioneers" such as AOL.com and MSN.com, are depicted as "old-fashioned department stores." A business model that once worked on account of its ability to offer consumers a wide-range of quality goods all under one roof no longer holds. Instead, customers are enticed by the giveaway discount culture of the Internet; Google has taken over as the new one-stop shop.

The Economist argues that news aggregators - seen by many within the news industry as "parasites" who feed off the work of others - do more good than they do harm and is right to point out that "interest in a story about Iraq in, say, the Los Angeles Times extends far beyond that city. Before the aggregators appeared, a reader in Seville or even San Francisco probably would not have known it existed."

The Huffington Post is singled out as a model aggregator for what the Economist describes as its ability to enlist "an unpaid army of some 3,000 mostly left-wing bloggers" to cater for the 4.2m unique readers that visit the site monthly. "The inherent benefit of spreading stories around helps explain why some established news outfits are coming to resemble aggregators," says the Economist.

British and American news publication, the Week, is an example of a print news aggregator. We would also add here France's Courrier International, an excellent editorial product with sadly circulation figures that do not reflect this (despite a steady increase over recent years).  Established in 1987, the weekly title today offers a look at the leading articles from around the world, with more than 900 international publications within its scope. Recurring themes are chosen from several newspapers from different parts of the globe and are translated into French for the home audience. For instance, in the latest edition (printed Thursday), the cover story concentrates on India's "awakening" with 10 articles translated from 8 of India's leading papers. Additionally, every week, stories outlining outside perception of France and the French also appear and Thursday's edition coincidentally kicks off the "France" section with the cover story which appeared on last week's edition of the Economist: "Europe's new pecking order" (France was considered to come out top, although the Economist does not expect it to hold onto this position for long).

With regards to pay walls, while the Economist believes that newspapers and magazines are more likely to be saved thanks to "a careful combination of free and paid-for content," it believes general news will largely remain free on the web, although it seems to contradict this view in another article - also part of the same series, with the role of the Internet in "killing the newspaper" at its core - claiming this approach is unsustainable in the long term.

On the one hand, the Economist is clearly optimistic about the prospect of news, going forward: "As large branches of the industry wither, new shoots are rising. The result is a business that is smaller and less profitable, but also more efficient and innovative." Yet, its stance on the future of print media is vague. Does it believe that newspapers (along with the established press) are heading for extinction? Or does it think there is still hope?

The Economist seems to think there may no longer be a place for traditional media in today's increasingly digital society and hints at a world where such media eventually dies out, in what it sees as the "end of a certain kind of civic sensibility." What's odd is that such a tone should come from a publication which has always referred to itself as a "newspaper." Interestingly, it avoids doing so in these specific articles.

We must not overlook emerging markets such as India and China, where despite some stagnation, the newspaper industry (not just news) is flourishing, as recent investments show. Some may argue that rising literacy levels will eventually lead to news consumption moving online even in these parts of the world, and once internet penetration becomes more substantial, this is a possibility. Although, coming back to the West, Canada is proof that a solid internet network does not necessarily mean that print must suffer.

The argument that Obama has every "intention to bypass the news filter" is unconvincing and it seems more likely that he and his multimedia-savvy team are simply engaging with all branches of the media community, in what some have called a "new spirit of inclusion," which includes the social networking community.

While newspapers may be in decline, it is premature to write newspapers off entirely, although there is no doubt that some aspects of the original business model need to be revised and adapted to the needs of today's readers and advertisers. Newspapers have generally been battered and bruised and bounced about from one would-be proprietor to the next, obliged to cut back staff and, in many cases, forced to shutdown altogether. This is not the result of dwindling circulation, for despite drops, there is still a large contingent of people for whom reading the newspaper is an essential part of keeping themselves informed.



Sources: Economist.com (1) , Economist.com (2) , OJD