The hares are running on the proposition that the Fairfax Media board is considering a medium-term plan to give up on printed Monday to Friday editions of its main mastheads in favour of a digital-only strategy.
And while we’ve all been looking the other way, News Limited has quietly downsized newsrooms and subs benches at several of its titles, including the Geelong Advertiser and the company has outsourced some backroom functions.
The newspaper industry is quietly dying.
But will it matter to most of us? Avid readers will miss the pleasure of print, but the news will still be available in other formats.
It is fears about the dwindling bottom line that is driving talk of abandoning daily newspapers at Fairfax and the paywall strategy at News Limited. We can perhaps get an idea of the future from looking at recent events in the United States.
Closures, shuttering and digital only “newspapers”
At least 13 large US newspapers have closed since 2007 and 10 or more have cut back two or three editions a week, instead of publishing every day.
The argument is that by eliminating high-cost low-return editions the more profitable days can be continued and the newspaper brand survives.
The most recent US paper to announce lay-offs and a cutback to three days a week is the New Orleans Times-Picayune.
New Orleans’ population is just over one million and it is the second major US city that no longer has a daily newspaper; the other is Oakland, California, which lost the Tribune in November 2011.
The west coast city of Seattle, population 2.7 million, lost the Post-Intelligencer in March 2009 after 146 years. At closure, its daily circulation was down to about 117,000. The Hearst Corporation put it up for sale in January 2009, but after 60 days it was shuttered. The online-only Seattlepi is still owned by Hearst and it claims a local online readership over four million per month. The newsroom has shrunk to around 20 people who now occupy one floor in an office tower, not an entire building.
Baltimore has a population of 2.1 million and the city’s second paper, the Examiner closed down in February 2009.The Examiner was a free daily that launched in 2006, but it never managed to pull in the national advertising that its initial business plan required. About 90 staff were laid off when the paper closed. According to reports at the time of the closure, investors were wary of newspapers and banks less inclined to lend money to failing businesses.
The city of Denver has a population of about 600,000, but the surrounding six county metropolitan area has 2.4 million inhabitants, making it one of the top 20 metro areas in the USA; its second paper, the Rocky Mountain News closed in February 2009 after its owner, the E.W. Scripps company failed to find a buyer. The News had a circulation in excess of 200,000 when it closed.
The Scripps-owned afternoon tabloid Cincinnati Post closed down on 31 December 2007 with a circulation of just 27,000 and it too is now online only. Cincinnati has a population of 2.5 million and is now a one-paper town.
Cincinnati was E. W. Scripps’ hometown, but the Post’s closure was predestined 30 years previously. It had been on life-support for most of that time under a ‘joint operating agreement’ (JOA) with its cross-town rival the Cincinnati Enquirer.
The JOA provided a unique subsidy under a piece of 1970 legislation, the Newspaper Preservation Act. This act allowed struggling newspaper companies to combine with a competitor to cross-subsidise printing and distribution costs. The JOA between the Post and the Enquirer ended after 30 years. The owners of the Enquirer – one of America’s largest newspaper companies, Gannett – would not continue the JOA with Scripps.
It was the ending of a similar JOA in Seattle that closed the Post-Intelligencer, after a bitter court battle was decided against the PI’s owner, Hearst Corporation.
At the end of the nineteenth century, 689 major cities in the United States had competing daily newspapers, today the number is only just into double figures and as more closures occur, this will soon be down to a handful.
A review of other closures, from 2007 on, seems to reveal a pattern: they were in medium to small markets with a population under one million and rapidly declining circulation.
Sydney and Melbourne have populations over 4 million, perhaps enough to sustain two newspapers for some time. However, if the US situation is a rough guide, then we could imagine that newspapers in some of the one-paper cities in Australia might get in trouble. If circulation is less than 10 per cent of population, it may be a trigger point for sale or closure.
Does it really matter if a newspaper closes?
Perhaps it doesn’t matter if more Australian cities become one-paper towns. Brisbane, Canberra, Perth, Hobart, Launceston, Adelaide, Darwin, Newcastle, Wagga Wagga, Wollongong, Geelong, Ballarat and many more regional areas only have one daily paper. Some have not known competition for close on 100 years.
Any diminution in news sources is said to lead to less diversity and that is probably true. But it is less true today when we no longer rely exclusively on print and get our news via broadcast, PCs, tablets and smartphones.
The digital optimists tell us that convergence means more variety, more choice, more information and, crucially, more freedom. It may even lead us to become more involved in public life; at least virtual public life.
Even so, one academic study, published by researchers from Princeton University, gives us cause to think again. According to the authors, participation in civic life declined when the Cincinnati Post ceased publication. (Schulhofer-Wohl & Garrido, 2009)
The researchers are very cautious about their analysis – the sample is small, the study was only two-years after the Post closed and statistical error always plays a part – but they draw one almost inescapable conclusion: local newspapers make a contribution to the social and political life of a city or town.
However, a Pew Research Center report in 2009 seems to indicate that this piece of commonsense is not supported by the data.
Among regular newspaper readers surveyed by Pew, there is some concern that the closure of a local title would impact negatively on civic life, but among those who are only casual readers, or who get news from other sources, the concern is less.
But the report’s headline, Many would shrug if their local newspaper closed, is misleading: 90 per cent of respondents agreed that there would be some negative impact on civic life ranging from “not much” to “a lot”.
One final observation about the spate of newspaper closures that occurred in the USA in the first half of 2009; perhaps the reasons do not lie entirely within the newspaper business.
Some of the titles had been on the market, but struggled to find buyers. This may be less to do with the internal economics of the newspaper business and more to do with the GFC that made both investors and banks nervous at the time and unwilling to commit. Perhaps without the GFC uncertainties, buyers would have been more willing to come forward.
On the other side of the ledger, investors now realise that the newspaper industry is doomed to eventual downsizing, if not complete extinction. It may be too late to save the Fairfax mastheads as six-day-a-week titles in Melbourne and Sydney; but they may yet find a new life as three-day reads.
Perhaps it will be cities like Wollongong and Newcastle where the axe falls first
The problem for Fairfax is one of “doing more with less”. In my view this is impossible in practise. As the US examples show, shuttering print editions means job losses in the newsroom too.