The Wall Street Journal and the death of print

May 18, 2009

Now you know that the uncertain future about the survival of newspapers is news: The Wall Street Journal’s op-ed page features an editorial castigating Massachusetts Democratic Sen. John Kerry and others for supporting the notion of federal government aid or bailouts for the struggling business.

The Journal gives us a recap of some ideas that have been seeping their way into the public consciousness in recent months, including:

  • Maryland Democratic Sen. Benjamin Cardin’s bill to allow newspapers to exist as non-profits.
  • Sen. Kerry’s endorsement of a proposal by Montana Democratic Sen. Max Baucus’s and Maine Republican Sen. Olympia Snowe’s to let newspapers offset their net operating losses over five years instead of two.
  • Sen. Kerry’s endorsement of some flexibility under the anti-trust laws, presumably in a way that would allow U.S. newspaper publishers to dream up some ways to force people to pay for the news they read online in a model similar to how the cable TV providers work with the people who provide the shows.
  • We note that the editorial didn’t even cover Washington State’s tax break for newspapers, not to mention Connecticut legislators’ recent willingness to help rustle up buyers for some former Journal Register papers. But you might as well add them to the list of ideas.

The Journal’s answer? No! No! No! On what grounds?

The “creative destruction” theory, spurred by people getting their news online, something that governments should let happen as a natural outcome of the free market. Here’s what the WSJ says:

The larger story here is that newspapers are enduring the familiar process of economic “creative destruction,” in this case brought on by the Internet. Advertisers are fleeing to search engines, while barriers to entry in publishing have crashed. Despite the pain this causes to certain companies, this is not much different than any other industry buffeted by new technology or business strategies. The shipping industry changed radically with the advent of containerization. Wal-Mart’s state-of-the-art inventory management transformed retailing. Apple’s iTunes has revolutionized the music industry.

Some new business model will emerge for journalism, if not for all newspapers, and in the meantime the business of reporting the news isn’t vanishing. It is taking new forms and adapting, with newspapers growing their audiences online even as the sources of their revenue shift. The industry is currently debating how to charge customers for content, and no doubt many experiments will be tried. No matter who emerges victorious, the journalism business will be stronger and more credible if it avoids the government’s embrace.

It also touched on the idea that it might be hard for newspapers to expose skullduggery and wrongdoing by the very politicians to whom they owe their lives:

“If we take seriously this notion that the press is the fourth estate, or the fourth branch of government,” Mr. Kerry said in a prepared statement, it’s time we consider its importance to democracy. Talk about a Freudian slip. Newspapers becoming the “fourth branch of government” is exactly what people most fear from any hand extended to save an independent press.

Now, that’s all well and good in the United States. Meanwhile, the Journal is getting a nice boost in India, thanks to government intervention. Here’s a line from the press release that went out on the same day as the editorial against bailing out newspapers:

The Wall Street Journal Asia will be printed Mondays through Fridays by The Express Group at print sites in New Delhi and Mumbai. The paper will be delivered the same day to individual and corporate subscribers and will be available at newsstands in major Indian cities.

The launch of the locally printed edition follows the Indian government’s decision earlier this year to allow foreign investment in the publication of facsimile editions of foreign newspapers and its approval of Dow Jones & Company’s proposal to publish a facsimile edition of The Wall Street Journal Asia in India.

See? Sometimes government aid is a good thing.

Keep an eye on

  • Speaking of newspapers, New York Times media columnist David Carr goes head-to-head with the Henry Blodgets of this world who ran the numbers and think the Gray Lady is dressed for bankruptcy or death. Guess again, Carr says. (The New York Times)
  • And speaking of The New York Times, it’s waded into the debate over whether billionaire Hollywood and music mogul David Geffen (thank you for “Court and Spark,” Neil Young’s weird phase, Nirvana, Sonic Youth and Guns n’ Roses) is going to be a nice guy or a mean guy if he tries to buy the Times Co. (The New York Times)
  • Newsweek decides that the future of publishing is about catering to smart people. (The Washington Post — Newsweek’s sister company)
One comment

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This blog post sounds like sour grapes to me.

The WSJ is one of few newspapers that has been making the transition to newer, online media successfully. A growing number of people, including myself, are signing up to pay for premium content where news articles are unskewed and provided as news–and opinion articles appear in the Opinion section. I think Reuters does an excellent job in providing solid, factual content–unfortunately, many newspapers add a left or right slant around this content. This is very unpalatable to many readers who are moving away from these slanted news sources and venturing out to the WSJ and the Reuters websites for their news content.

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