The New Old Media – A Survival Solution?
Wednesday, January 28th, 2009
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News You Can Endow
“THE basis of our governments being the opinion of the people, the very first object should be to keep that right,” Thomas Jefferson wrote in January 1787. “And were it left to me to decide whether we should have a government without newspapers or newspapers without a government, I should not hesitate to prefer the latter.”
Today, we are dangerously close to having a government without newspapers. American newspapers shoulder the burden of considerable indebtedness with little cash on hand, as their profit margins have diminished or disappeared. Readers turn increasingly to the Internet for information — even though the Internet has the potential to be, in the words of the chief executive of Google, Eric Schmidt, “a cesspool” of false information. If Jefferson was right that a well-informed citizenry is the foundation of our democracy, then newspapers must be saved.
Although the problems that the newspaper industry faces are well known, no one has offered a satisfactory solution. But there is an option that might not only save newspapers but also make them stronger: Turn them into nonprofit, endowed institutions — like colleges and universities. Endowments would enhance newspapers’ autonomy while shielding them from the economic forces that are now tearing them down.
In the standard business model, newspapers rely on revenues from circulation and advertising to pay for news coverage and generate healthy profits. In the past decade, however, as Americans embraced the Internet, newspaper circulation has declined every year. Advertising revenues, which are tied to circulation levels, fell even faster. Classified ads, in particular, suffered as the Web offered cheaper, easier and more effective alternatives.
America’s pre-eminent papers exemplify the distress. Average profit margins at The Washington Post over the past five years have been about 25 percent less than what they had been in the previous 15 years. At The New York Times, the decline was more than 50 percent. The debt-laden Tribune Company, which operates The Chicago Tribune, The Los Angeles Times and six other daily papers, has filed for bankruptcy protection.
Related articles
- Google abandons Print Ads newspaper ad sales service after disappointing results (guardian.co.uk)
- Tribune Co. reports $124 million loss for 3rd quarter (inquisitr.com)
- Online newspaper readership climbs 16 percent (news.cnet.com)
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