What could newspapers have done to tackle the economic aspects of digital challenges and what have they done instead?
In an American Journalism Review article entitled "Costly Mistakes", John Morton discusses what he sees as the weak and ineffective reaction of the newspaper industry to the shift of advertising to the Internet.
"Newspaper advertising revenue fell more - more than two to three times as much in percentage terms - during the 2008-2009 recession than during the two worst previous recessions for newspapers since World War II, in 1991 and 2001", he says, pointing out that what newspapers did to counter weakening advertising revenue was not sufficient indeed.
In Morton's opinion, there were two main mistakes that newspapers have made during recent years: they followed cost-cutting policies, which had an impact on quality of journalism, and they didn't understand how to deal with the new possibilities the Web opened.
"There is no mystery about what motivated the cost-cutting: an effort to preserve the high profit margins the industry has long been known for, even as newspapers were being challenged by a wide array of new competitors. (...) It's as if the industry refused to acknowledge that it was operating in a vastly different environment, one in which newspapers will be fortunate to be half as profitable (a third might be closer to reality) as they were as recently as 2004", Morton argues.
But cost-cutting had an impact on newspapers' main source of strength: they gave up quality, the quality that broad and deep journalism, that traditionally found in print papers, could offer.
On the other hand, newspapers didn't understand in time how to ride the wave of the rising Web. Even if they developed a Web version of their newspapers they were usually limited to re-purposing the same content of the print edition, and offering it free.
"The earlier decision made by all but a handful of papers that information posted on Web sites should be free, under the widely held belief (including initially by yours truly) that large numbers of people taking advantage of free information would attract large amounts of advertising" was wrong, Morton says. In fact that didn't happen. The major swift of advertising revenue was from newspapers to new competing Web sites, such as news aggregators' websites, the hardest hit by this advertising decrease being the big metropolitan dailies, while smaller newspapers operate in far less complex and competitive markets.
The same about the delay in understanding Web frontiers was discussed by Jay Rosen during the recent WEF Study Tour. In his opinion, news organizations realized too late both what the Web could offer, and the fact that their knowledge gained in the old system was not automatically transferable. As a valuable example of how news company can be revolutionized, he mentioned what John Paton of the Journal Register Company has done.
"In terms of money, Paton's only goal was to ensure that increases in digital revenue were equal to or more than the decline in print revenue", Rosen said to WEF.
So what are the prospects for the future of newspapers?
Christoph Riess, CEO of World Association of Newspapers and News Publishers, during the latest World Editor's Forum in Hamburg, said that "paid content is the key". In his view newspapers will remain the dominant media: "Will paid content generate revenue? It's not a question of yes or no. It's question of how. In order to survive, we have to do it," he emphasised. The New York Times is going in this direction, for example.
Another way to follow for newspapers is to concentrate on the traditional, deep investigative work, which means quality journalism, trying to get back the role that no-profit news organizations, like Connecticut Health Investigative Team and ProPublica, are holding.
Lastly, specialization could help newspapers to carve out a niche, as Piero Macrì argues on EJO, about the new revealed plans of Forbes Media to launch a new European title next year, as the Telegraph revealed. How it is possible, Macrì wonders, to launch a new editorial adventure on a traditional media support, as the paper is, in a moment of general newspapers crisis?
"The Forbes case - continues Macrì - highlight that in the specialized publishing there still is a sufficient space to develop new initiative, even on the paper." But, as the Italian journalist points out, the Forbes case demonstrates also that news business models, whether on the paper or on the Web, must be unique and original, depending on their market of reference.
Or maybe, to finish with Morton's words, newspapers "should have accepted that the cost of maintaining quality journalism in tough times inevitably means lower profits. It's called public service".
Sources: AJR, EJO, The Telegraph