JOURNALISM: ‘CORE VALUES HAVE TO BE THERE FOR THE PRODUCT TO PERFORM’
In a country where a free press is enshrined by constitutional amendment and newspapers measure success by Pulitzer prizes as well as profits, concern about failing titles is coupled with anxiety about what impact the industry’s financial troubles will have on journalism.
American journalism is “under enormous stress”, Arthur Sulzberger, chairman of The New York Times, recently told a university audience. Quality reporting, whether on local government or Iraq, was becoming harder to pay for and “the immediate future looks, at minimum, grim”.
The damage already done to newsroom resources is spelt out in a report by the Pew Research Center’s Project for Excellence in Journalism, released on Monday. By the end of 2009, US dailies will employ 20-25 per cent fewer journalists than in 2001; foreign staff have suffered even deeper cuts; and half of the states in the country no longer have a newspaper covering Congress.
While some online-only newsrooms offered “solid journalism in niche areas of interest”, these and the new voices of citizen journalists and bloggers are in aggregate “far from compensating for the losses in coverage in traditional newsrooms”. The limited resources of most online news organisations could be finished off by a single lawsuit.
Not everyone is alarmed by the changes. A separate Pew study last week found that only 43 per cent of Americans thought that losing their local newspaper would hurt civic life in their community a lot. A similar number " 42 per cent " said they would not miss their local paper at all if it were to disappear, even though newspapers remain the second largest source of local news after television, well ahead of radio and the internet.
The dilemma for proprietors is that cutting editorial costs, while often a necessary response to falling revenues, risks alienating more customers. “The core journalistic values have to be there for the product to perform,” cautions Anthea Stratigos, a publishing consultant. This can still be achieved, other analysts say, if news organisations focus their limited resources well.
Pew offers one piece of positive news for “legacy” news providers, whose online audiences grew far more last year than did those for new media. “The old norms of traditional journalism continue to have value,” it concludes.
But it has one further demoralising message: “Journalism, deluded by its profitability and fearful of technology, let others outside the industry steal chance after chance online,” it says. Journalists, in other words, do not even have the consolation of being able to blame others for their woes.
EUROPE: ‘FREE NEWSPAPERS ARE IN THE FRONTLINE TRENCHES OF THIS WAR’
Not long ago, freesheets were seen as the nemesis of the paid-for newspaper. Now it seems at least as likely that the free newspaper model will be the first to fail, writes Ben Fenton.
Sly Bailey, the chief executive of Trinity Mirror, which publishes more than 100 free titles around the UK, says: “Free newspapers are in the frontline trenches of this war, simply because they only have advertising revenues.”
Across Europe, newspaper groups are struggling to cope with advertiser migration to the internet as well as recession. Both represent the most serious threat of their type that the industry has faced in peacetime, Mrs Bailey says.
It is noticeable that companies with the most serious threats to their existence have a strong element of free newspapers in their portfolio. Mecom, the UK-listed publisher with operations in the Netherlands, Germany, Poland and Scandinavia, has postponed talks with its creditors as it struggles to sell off assets. Last month, Metro International, the world’s largest publisher of free papers, announced plans for a rights offer after admitting it had breached its debt covenants and did not have sufficient working capital for the next 12 months.
Metro, which is Swedish-controlled and has daily readership of more than 18m from 81 editions in 22 countries, was looking to raise SKr550m ($65m, £46m, €50m) through its issue to shareholders. But later in February it announced it had received a takeover approach. Metro had already suspended operations of its fully-owned titles in Spain.
In the UK, Trinity Mirror and the rival Johnston Press, which between them publish around 230 freesheets, have both released dismal results in recent months, where the only bright spots were increases in circulation revenue at their paid-for titles.
Simon Baker, analyst for Credit Suisse, says that for regional newspaper groups in Europe, demand is still relatively strong and it is the advertising inventory that is really hurting. “The real solution for newspapers is to increase cover price to a new equilibrium to reflect better the balance between the consumer who really wants to read their content " and they really do " and the declining advertising demand,” he says. “Obviously, for a regional newspaper publisher for whom the freesheet was the business model, that is a fundamental challenge.”
Free papers were successful against paid-for incumbents because of their cheapness to produce. Nothing, however, that print has so far been able to think of is anything like as nimble as the internet.