March 11, 2009

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Seattle P-I's expected closure a sign of the times

The Hearst Corp. announced in January that, after $14 million in losses last year, it was putting the P-I up for sale. Failing that, the company said it would cease publication of a print version of the paper, a closure that could come this week.

Indications are Hearst intends to continue the paper as an online-only operation, with a much smaller staff. One way or the other, more than 150 people are likely to join out-of-work colleagues all over the country.

Newspapers everywhere are squeezed in a vise of debt and falling revenue that is wringing life out of once-vibrant publications all over the country.
Seattle is (was) a two newspaper town, but the Seattle Post-Intelligencer (P-I) will be shutting down all but their online presence in the next day or so. The shutting down of newspapers is not exactly breaking news anymore. The industry has been in decline over the last few years.

Revenues have dropped and readers have been moving to the online (free) versions. The newspaper industry has been slow to adapt to a new business model. In the past, up to 70% of their revenue came from advertising including classifieds. Much of classified advertising has moved to free venues like Craigslist, cutting a big hole in newspaper revenue streams. Online ads bring in some money, but not nearly enough to replace print ad revenues.

Papers have already been making cutbacks in staff and departments. Some columns have been eliminated and sections have been combined. The Seattle Times is actually printed on paper that is now narrower by an inch. The Seattle Times and P-I entered into a joint operating agreement some years ago. The agreement meant that both papers were printed at the Times' plant to cut down on cost. It wasn't enough to save the P-I, only delay it's demise. I actually received a P-I instead of the Times a few mornings ago. Not sure if it was a mix up or some nostalgic nod to the last week of the printed P-I.

There aren't many two-paper towns left, and the outlook for the Times is not rosy. Newspapers around the country are scrambling to come up with a new business model. Readership is actually up if you count the online readers, but getting revenue from these readers is tricky. I listened to a piece on NPR discussing some of the ideas floating around. These include:

Charging a subscription price for access to the website on a monthly or annual basis.

Would be tough unless all newspapers do this at the same time, otherwise people will simply get their news on another site. The Wall Street Journal charges for some of its online paper, but it is one of the few who have been successful with this model.

Charging micropayments (5 cents for example) for individual articles.

Kind of like iTunes in that you can buy only what you want and avoid paying for filler. Some sort of online account would need to be set up to avoid actually whipping out a credit card each time you click. It is unclear if people will pay story by story, and if they do, readers may end up reading a very narrow field of subjects.

Charging websites who link to stories to pay for the research and reporters.

People argue that they get their information from blogs and other sites, but much of the real stories originate with newspapers, who aren't getting compensated for their reporting.

Tax breaks or government grants to help support the industry.

This might be a tough sell these days with the current state of the economy. On the other hand, isn't the "fourth estate" of the press a vital part of democracy? One could argue it is more important than the auto industry on this level.

Reducing cost of printing paper by using Kindle-like devices.

As noted in another post, printing costs for the New York Times are twice as high as providing a Kindle to every subscriber. Hearst Newspapers is considering producing their own device, and like a cell phone, discounting the device (or giving it away) with a subscription contract. The problem for some is that the electronic version is static (like the printed version) rather than updated regularly like the web version.

I have had the Seattle Times delivered to my Kindle for the last few days. I am seeing if I can do without the printed paper. The Kindle version is nice, but not quite the same experience of reading through a physical newspaper. Of course stopping home delivery will eliminate some waste, both environmentally and in printing costs, but my current motivation is to save $13.50 a month.

The solution will likely be a combination of these and other ideas, but something needs to happen soon. More than ever, people are tuning into what is going on in their communities, states and country. Investigative journalism needs to continue in some form. As Bill Moyers said last year,

"Across the media landscape, the health of our democracy is imperiled. Buffeted by gale force winds of technological, political and demographic forces, without a truly free and independent press, this 250-year-old experiment in self-government will not make it. As journalism goes, so goes democracy."

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