News never made money, and is unlikely to

By Jack Shafer
August 15, 2013

Sometime in the mid-1990s, the Web began to peel from the daily American newspaper bundle its most commercial elements, essentially the editorial sections against which advertisements could be reliably sold. Coverage of sports, business and market news, entertainment and culture, gossip, shopping, and travel still ran in daily newspapers, but the audience steadily shifted to Web sources for this sort of news. Broadcasters had dented newspaper hegemony decades ago, absconding with breaking news and weather coverage, and inventing new audience pleasers, such as traffic reports and talk. But it was the Web that completed the disintegration of the newspaper bundle that dominated the news media market for more than a century. In addition to pinching the most commercial coverage from newspapers, the Web has also made off with the institution’s lucrative classified ads market, simultaneously reducing its status as the premier venue for content and advertising.

This isn’t to say newspapers deserted the commercial news categories. Newspapers have maintained their presence in the sports-weather-business-entertainment-culture departments to attract readers who attract advertisers. Even so, circulation has eroded and ad revenues have fallen to below 1950 levels in real dollars. The units of the newspaper bundle not yet ransacked by the Web — international, national, state, local, and political coverage – have (to paraphrase Frank Zappa) little-to-no commercial potential. Traditionally, newspapers have struggled selling space to advertisers by invoking these news varieties unless the news is absolutely spectacular or sensationalized. As the bundle fragments, it becomes more difficult for publishers to support non-commercial news.

Outlets such as Politico (a child of the Web) and the Bureau of National Affairs (a pre-Web entity, now owned by Bloomberg), which were designed to commercialize news about politics, the federal government, regulatory affairs, political campaigns, law, and lobbying, have succeeded in targeting an elite Washington, D.C., audience with this kind of news. But those successes don’t subtract from the fact that Washington news is a loss leader for most mainstream newspapers. The same is largely true of international and national news. No mass audience is willing to directly pay for such news outside of the one already served by the New York Times (combined daily print and digital circulation, 1,865,318). Even At the Times, subscribers now contribute more revenues than advertisers, indicating that they value its mission more than Madison Avenue does.

This discussion would be incomplete without crediting the Wall Street Journal, the Associated Press, and the home team at Reuters for chasing news that can’t be directly monetized. A semblance of the traditional news bundle survives at these places for legacy reasons and because the Web hasn’t usurped their positions in the journalistic order. The day may come, however, that falling revenues force them to redefine their editorial missions, too. That day may close on USA Today, a frequent purveyor of noncommercial news, sooner than later.

Were harder forms of news ever commercial? Gerald J. Baldasty’s book, The Commercialization of News in the Nineteenth Century, makes a case clear as spring water that hard news has almost never been a mass commercial enterprise. The American newspapers of the 1820s and early 1830s were creatures of political parties, edited by zealots. Essentially propaganda sheets, these newspapers were “devoted to winning elections,” as Baldasty wrote well before (1992) the Web invasion. Without newspapers, top political organizer Martin Van Buren once said, “we might as well hang our harps on willows.”

Political parties supported the papers financially, and when editors strayed from the party line into independence, the parties would dump their newspapers. For instance, Andrew Jackson’s supporters helped start the Washington Globe after the editor of the U.S. Telegraph, a Jackson loyalist, was thought to have betrayed their cause. Political office-holders steered printing contracts and payments for official notices their way. In those years, members of Congress used their franking privilege to send newspapers at no cost through the postal system and doled out patronage jobs, typically postmaster positions, to their favorite newspaper editors. “Many subscribers simply did not pay for their newspapers,” Baldasty wrote. “In 1832, one North Carolina editor estimated that only 10 percent of his 600 subscribers had paid for the paper.”

Changes in technology — faster, cheaper presses; and more important, the telegraph, the Internet of its day — throttled the monopoly power Washington newspapers held over federal news. By the late 1840s, the hinterlands no longer had to wait days or weeks for federal, national, and international news to be freighted in from outside. Timely news now came over the wire and could be printed contemporaneously with events. All this helped newspapers declare independence from the parties, and as they did many enlisted a new patron, the advertiser, who “preferred news free from unpleasantness,” in Baldasty’s nice construction.

These editors deliberately softened and commercialized the news, frequently censoring it on behalf of advertisers. “Half the content of antebellum metropolitan newspapers dealt with politics, whereas postbellum newspapers devoted proportionately much less attention to politics and much more attention to crime and courts, accidents, society and women, and leisure activities.” (Women were thought more susceptible to the appeals of advertising.) Puff pieces about advertisers and “reading notices,” the sponsored content of its day, proliferated. Throughout the 20th century, newspapers got the upper-hand in the struggle, and at places like the Chandler’s Los Angeles Times, the Graham’s Washington Post, the Ochs-Sulzberger’s New York Times, laudable chains like Knight-Ridder, and elsewhere, publishers showcased and promoted hard news in their fat bundles.

Most of today’s publishers and editors aren’t as solicitous of advertisers as late 19th century ones, but I doubt that backsliding would help newspaper bottom lines. I also doubt that dramatic improvements in their commercial coverage would do the trick, either. Readers and advertisers have already flown their one-way migration route. The only place this isn’t true is at some small town newspapers — the sort Warren Buffett likes to buy – where the bundle prevails.

Obviously, serious journalism still gets done at many conventional outlets, but it’s telling that the most enthusiastic creators of non-commercial news hail from not-for-profit precincts, such as ProPublica, Texas Tribune, the Center for Investigative Reporting, the Center for Public Integrity, the Fiscal Times, the Investigative Reporting Workshop, Frontline, the Wisconsin Center for Investigative Reporting, the Schuster Center for Investigative Reporting, Stateline.org, Voice of San Diego, MinnPost.com, NPR (still feasting on Joan “McDonald’s” Kroc’s $235 million donation), other organizations and various non-profit magazines and non-profit broadcasters. (No offense meant if I left your outfit off this list.) Meanwhile, grant-makers at foundations like the Alicia Patterson Fellowship, the Fund for Investigative Journalism, the Open Society Foundations’ media wing, the Nation Institute, the Pulitzer Center, the Harvard Fellowships, the John Simon Guggenheim Memorial Foundation, and elsewhere have supported serious journalists.

As philanthropists take the seat in the story room once held by politicians, we should be glad. But not too glad, because there will never be enough philanthropists to restore the status quo ante. Nor will the market create enough billionaires like Jeff Bezos who are willing to rescue drowning newspapers like the Washington Post. Wishful thinkers — I’m one — can hope for media giants like Bloomberg and ESPN, now the most valuable media property in the United States, to be persuaded to add noncommercial news to their bundles. (Perhaps ABC News, which is owned by one of ESPN’s co-owners, could be repositioned as the noncommercial face of ESPN.)

If summoning additional philanthropists doesn’t work, can we stomach asking the political parties to re-enter the journalism business? To a limited extent, they already have, with the establishment of Fox News Channel and the retooling of MSNBC. As for me, I’m counting on the winds of technology to blow a fresh miracle through the news business. A Hyperloop for journalism!

******

Send schematics for a Journalism Hyperloop to Shafer.Reuters@gmail.com. Pedestrians will always be welcome at my Twitter feed. Sign up for email notifications of new Shafer columns (and other occasional announcements). Subscribe to this RSS feed for new Shafer columns.

12 comments

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Jack, some sage, name forgotten, once remarked that the railroad owners never understood they were not in the railroad business, they were in the transportation business. (Canal owners had a similar lack of awareness.)

Likewise, newspaper owners didn’t understand, until it was too late, that were not in the news delivered on paper business, but the news business. Funny thing is, we now have more news than ever, just less and less on paper. Dan

Posted by dbuck | Report as abusive

Good article. I hope the “News” survives. More importantly I hope investigative journalism survives. I despise how the mainstream media has high-jacked “The Evening News” (NBC, ABC, CBS) and replaced it with their sensationalized tabloid style stories. I can’t even say how many people I’ve heard say, “Yeah, I watch the news every night”. I’m tired of trying to convince them that they’re not getting any news at all. So now I just troll Reuters and other internet outlets and hope they stay true for a few more years.

Posted by tmc | Report as abusive

Lear another language and watch news from other countries. they still have the knack.

Posted by rikfre | Report as abusive

Online news and other media have become a loss leader for selling something else. If all you have is media you have losses. For example, Jeff Bezos at Amazon has a lot to sell.

Posted by tomforemski | Report as abusive

This all seems like old, if not ancient history. Are we to mourn the decline of newspapers? Why? Should we discuss bringing back the horse and buggy?

Are newspapers, like most mass media, losing their sponsors, the [apolitical] Plutocrats who owned most of the mass media including newspapers and radio for decades? Will these Members of the One Percenters Club lose their public voice? Not to worry, most of the articles regarding our economy represent the concerns of this Plutocracy very well. Isn’t our economy recovering well even though there are fewer of the Pee-Ons, the 99%, who hold jobs than six years ago during which time the population has grown, but the labor force declined? Who wants us to believe this nonsense? And, why?

Posted by ptiffany | Report as abusive

I agree that this is a story that gets told over and over again. When will pundits move on from explaining the demise of newspapers to focus on how local communities can continue to benefit from quality journalism. With all due respect, I don’t suspect its from ProPublica or the Texas Tribune, at least not at the community level. And as far as “the most enthusiastic creators of non-commercial news,” the Pulitzers (if you still respect them) beg to disagree awarding the stalwarts (NYT, Denver Post, Tampa Bay Times, etc.) with the highest honor for quality journalism.

Posted by RandyBennett | Report as abusive

Too bad the news outlets – almost ALL of them – have lost sight of the actual news and now have their own agendas and ideologies that are given to us daily. It is no longer “just the facts”; we now have slanted and tainted “news”. Brainwashing?

Posted by AZreb | Report as abusive

AZreb,
During the so-called golden age of mass-circulation newspapers, the 19th and early 20th century era of the Hearsts and the McCormicks, newspapers had “agendas and ideologies” that would put most most news outlets, newspapers or television channels, today to shame.

In any event, the two most successful and best newspapers in the United States at the moment, the New York Times and Wall Street Journal, editorially are, respectively, unabashedly liberal and conservative.

There’s no brainwashing, however. The reader is free to ignore the editorials. Dan

Posted by dbuck | Report as abusive

Without mechanisms to reliably inform citizens democracy risks decay. Then nations will lose the capacity to sell constraint to their people and long term issues like population and climate change will rush up on us. If this is even half true surely the stability needed for prosperity will vanish. Maybe democracies need to invest in a branch of government that ensures the fidelity of the contest for power.

Posted by Colmery | Report as abusive

“Most of today’s publishers and editors aren’t as solicitous of advertisers as late 19th century ones, but I doubt that backsliding would help newspaper bottom lines.”

“Native advertising” is getting a lot of buzz these days, and a lot of it — commercial messages dressed up to look like and appear among real news — is exactly that kind of backsliding.

Posted by mediareset | Report as abusive

@AZReb, I don’t think they lost site. I remember seeing several of the older anchors deriding their networks about the change in reporting. Ratings mean money. News changed because news didn’t make money. Tabloid news does. I don’t think NBC changed the martin 911 call to sound racist for any other reason than to get more ratings. It’s what they do. It’s pretty simple really.

Posted by tmc | Report as abusive

Freedom of the Press belongs to those that own one.

Posted by tmc | Report as abusive