So Why is the Newspaper Business Screwed Up?

I would just add that it just ain't newspapers -- it's all journalistic media.

Mary McCarthy said famously of Lillian Hellman: “Every word she writes is a lie, including ‘and’ and ‘the’.”

It’s tempting to say the same about the many diagnoses of what ails the newspaper world. We hear endlessly that the troubles are a result of the Internet, new technology, “people don’t read anymore,” and, my favorite, “people don’t have as much time as they used to.” As if there was once a 36-hour day, or people who once worked 12-hour shifts while raising large families had this abundance of time.

These forces are real. And yes, a big swath of the public is distracted by celebrity gossip and gets its “news” from blogs, television and talk radio. What’s less noted is how newspapers themselves contributed to the dumbing down of America. What’s most frustrating is that the discussion fails to focus on the more significant reasons behind the decline in newspaper journalism. They are:

-The creation of monopoly markets and, through consolidation, cartels of newspaper ownership. Economic history shows us that monopolies and cartels always commit suicide. Divorced from the imperatives of real competition, monopolies easily slip into a self-centered world of bureaucratic conformity and a desire to protect the status quo. They became slow and rigid, in other words, road kill for competitors.

-Consolidation of newspapers into large, publicly held companies. This removed newspapers from their communities and killed a sense of holding a public trust. And it left them at the mercy of Wall Street. Newspaper executives promised returns that are nearly impossible for any (legal) entity to sustain year after year. Everything came to depend on delivering these short-term “growth” numbers to the Street. Among the biggest losers was the ability to invest in future technologies and the ability to shift to meet changing consumer habits. Those wouldn’t deliver instant double-digit margins. Thus, newspaper companies failed to start, or failing that, buy, a Yahoo or Craig’s List.

-A largely defensive strategy took hold, even though history shows that no company under siege ever merely cut its way to recovery. Significantly, investment in the unique intellectual capital of newspapers – journalism – was constantly reduced. Newsrooms lost much of their top talent. Marketing, more important than ever in business, was never a newspaper strength, and was cut to the bone. Research and development received little more than lip service, or was another tool to hand down demands for shorter, dumber, fluffier stories. There was little interest on the advertising side in the kind of “skunk works” that might have leapfrogged from print to online before the crisis became acute. No longer did the smartest business-school grads want to work on the business side of newspapers. A thousand cuts hurt readership. One example: eliminating stock tables antagonized the most loyal readers, older folks who weren’t online. Many went away. Multiply that around every newspaper each time a key reader destination was eliminated. The cutback of international coverage comes just as America's future is more and more determined by world events (yes, even the soccer mom's ability to fill up her SUV).

-Groupthink was a natural outgrowth of monopolies and the demands of Wall Street. This was hastened by the ascendancy of Gannett and its (for a while) superior returns. A startlingly conformist agenda emerged all over: design over content; short, uninteresting (but non-irritating to advertisers) stories, etc. The universe of different tactics, strategies and innovations that a competitive industry would have evolved never happened. The industry became strikingly inwardly focused, insulated from a changing world. When change was noted, it somehow always produced moves that degraded the news product. Years were spent developing “new editorial products” to attract non-readers. This was a questionable use of resources, as surveys and focus groups showed most of these people wouldn’t read anyway, and certainly not subscribe seven days a week to a print edition. But the resources to do them were diverted away from coverage that served existing readers. Industry leaders were singularly cavalier about their loyal customers, while chasing ones they had little chance to attracting.

-Leadership collapsed under the weight of these forces. A generation of managers that would go along with these dictates rose, while those with other ideas were pushed out or aside. These surviving managers – of course with honorable exceptions – were singularly incapable of dealing with the historic turning points facing newspapers. Every day they came in hoping to not make a mistake, to merely preserve the business they had, or to push through artificial, top-down, one-side-fits-all formulas, usually backed by questionable research. At some chains, the jobs of editors became little more than gathering stuff for graphic do-dads and implementing the content rules cooked up at headquarters. These were once the front-line leaders who made the biggest difference in the quality of a product based, inexorably, on the written word, well told. The simple creed of "get a great story and put it in the newspaper (or online)" went away. For example, experienced police reporters went away -- even though it's clear that well-done cop stories draw readers. In their place was a 21-year-old taking dictation from a police public-affairs announcement.

-The biggest problem, of course, had nothing to do with the newsrooms. It was the collapse of an unsustainable business model. Simply put, the model involved sending miniskirted saleswomen out to sell ads at confiscatory rates to lecherous old car dealers and appliance-store owners. Protecting these profits, whether from national, local or classified ads, became the central focus of newspaper bosses. These areas were the most vulnerable to new competitors. But the condition of the industry by the 1990s – risk averse, promising unrealistic margins, losing its best talent, ignoring ideas outside its preconceived notions – left it unable to meet these threats.

The newspaper was always a tricky balance, where advertising paid for an independent news operation. The best newspapers carried it off. But news alone could never “pay for itself.” It would be have been difficult for any mature industry to face the sea changes that swamped newspapers. But a more decentralized, competitive industry might have found its way. Imagine if one company would have turned a “dying” PM newspaper into an online newspaper? It would have been very lean, but a wonderful competitive weapon. Imagine if another would have bought Yahoo in its infancy and both fed off its innovation and used it as a news and advertising platform?

Now the tailspin continues, and the damage to our democracy is hard to overstate. It's no coincidence that the United States stumbled into Iraq and is paralyzed before serious challenges at home and abroad at precisely the moment when real journalism is besieged. It almost might make the conspiracy minded think there was a grand plan to keep us dumb.

Link.