Item! The most crucial, distinctive product of the newspaper business is neither news nor paper. And the best way to provide it may not be a business.
Newspaper companies are still making money. But their average profit margin of 17% is down from 26% as recently as 2000—just one data point in the industry's Worst Year Ever: "I think 2006 will turn out to be the first year in which print revenues actually were negative for the year," says analyst Rick Edmonds of the Poynter Institute. In the past year, we've seen the venerable Knight Ridder chain dismantled; an attempted sale of the
So why should you, an unsentimental consumer slurping text from RSS feeds, care about the demise of the daily rag? Thanks to the Internet, up-to-the-second world and local info has become a commodity, just like tap water. But online media, with its much lower ad revenue and few established subscription fees, doesn't yet support labor-intensive professional news gathering. This is the papers' traditional strength, epitomized by giants such as the recently deceased R.W. Apple, who in his day served as a
Perversely, the market is weakening newspapers' core competency before new media can replace it. So far this decade, the industry has lost about 2,800 full-time editorial jobs, estimate the Poynter Institute and the Project for Excellence in Journalism. Buyout packages target the old-growth trees of the newsroom, the senior editors with experience and irreplaceable institutional memory. Deep reportage dwindles. The Boston Globe just closed its three remaining foreign bureaus. Instead, readers get bids for more luxury ad dollars. Thursday Styles Section, anyone?
"I think that public ownership of newspaper companies is inimical to good journalism," says veteran industry analyst John Morton. Many papers look to a billionaire sugar daddy for bailouts, but as Edmonds points out, "Private ownership is a roll of the dice. Is the person interested in good journalism, or does he want to help friends and punish enemies?"
Here's another option: social enterprise. We journalists love the noble idea of serving the public interest. If that's for real, why not let the public support newspapers?
Take the old Gray Lady. She's no less shining an example of New York's cultural heritage than the Metropolitan Opera. So why shouldn't the Times, like the Met, turn itself over to a philanthropic foundation that could invest in long-term quality over quarterly revenues? Whether the future is digital, dead trees, or a combination, the foundation could protect the Times' highly trained staff, research resources, reportorial traditions, archives, and matchless global brand.
Morton calls this "a wonderful idea that nobody is going to endorse." Yet it's not as crazy as it sounds. When the Los Angeles Times was up for sale last year, billionaire suitor Eli Broad proposed running it philanthropically through his own foundation. Nelson Poynter bequeathed the St. Petersburg Times in 1975 to his nonprofit educational institute; the paper grew to boast the largest circulation in Florida.
Paul C. Tash, CEO of the St. Pete Times, says, "We can trade profits in the short term for market share in the long term. We can try to make our papers as vibrant and as compelling as we can, even as we try our hand at some new things. I know some think this is inevitably a dwindling industry and we should wring as much out of it as we can. I'm much more optimistic."
For my money, the best example of journalism as social enterprise is NPR, which is having a hell of a decade. Gone are the days of full dependence on mingy government stipends. Since CEO Ken Stern came on board (as COO) in 1999, revenues from corporate sponsors have more than doubled, as has weekly listenership. NPR is hiring more reporters, opening new international bureaus, and has helped pioneer podcasting.
For younger news junkies like me, reared on participatory online media, what makes the public-radio model most appealing is its acknowledged reliance on "people like you." Listener support empowers it to strive to be a primary source of quality news, something no one else in American radio is even attempting in the age of
Continues Stern: "I'm happy to be the CEO of NPR. I can't think of a media organization I'd rather be in charge of at this time." Can the folks at The New York Times say the same? Who knows—they declined any interviews for this piece.
Comments from the Fast Company Connection, a reader panel
This is a long-overdue solution. The local paper in my community has changed three times in four years, all to "generate business" and keep its dwindling customer base. With this proposal, newspapers have the opportunity to maintain high-quality, objective, and unrelenting coverage.
I get most of my news on the Web. In an age where everyone with a cell-phone camera and an uplink is the reporter on the scene, newspapers will never again be the news.
The biggest reason newsprint media will stay afloat is they still have "real" journalists who have the backing to do the in-depth analysis that is missing from so many media outlets. Good old-fashioned muckraking—that's what the newspaper industry needs to do.
Fort Smith, Arkansas
I enjoy The New York Times. I love the articles, the ads, and my Times magazine and book review. Why change that?
A version of this article appeared in the April 2007 issue of Fast Company magazine.