In a moment of dubious etiquette, venture capitalist and Netscape co-founder Marc Andreessen said at a New York Times conference this week that the company should dismantle its print operations not in ten years, or five, but “as soon as possible.” Cue print lovers’ outrage.
Of course, those paying attention to the newspaper business shouldn’t be surprised to hear anyone, let alone Marc Andreessen, speculating on the eventual or imminent demise of print. At least 14 metropolitan dailies have closed since Newspaper Death Watch (a sobering site if ever there was one) started keeping track in 2007, and another 10 are working on a digital-only or digital-print hybrid. In May, New Orleans’ Times-Picayune said it would be reducing its frequency to three times a week. Gannett and McClatchy are both struggling with falling ad revenue and rising pension costs, and earlier this week, the Tribune Co. – in its fifth year of bankruptcy – announced plans to sell off some or all of its papers.
So everyone knows print is in trouble. But simply giving it up – all production and distribution costs included – is no panacea. True digital success stories are few and far between (think The Wall Street Journal, The New Yorker, The Atlantic, and the Financial Times) but are touted as beacons of hope for the industry. To date, newspapers’ transition to online-only has not been, as Andreessen asks of the NYT, a matter of “going on 100 percent offense,” so much as necessary reaction to harsh realities: ad revenue is down, circulation is flat and putting out an actual paper is expensive. It’s too early to know how such nascent operations will fare in the long run.
For the New York Times specifically, the prospect of an all-digital operation is still a financial bridge too far. It’s true that company saw a 10.9% drop in third-quarter print ad revenue, compared with the same quarter in 2011 (and in line with a staggering drop in print ad dollars documented here) but digital ad sales have yet to come even close to filling the void. Moreover, the New York Times Co. saw a 2.2% decline in digital ad revenue in the third quarter, which—at $44.6 million—accounted for less than a quarter of overall ad dollars. In other words, online advertising is still the David to print’s (however floundering) Goliath. The subdued panic resulting from the digital advertising plateau is evident in marketers’ attempts to “revolutionize” the ad space. See: social media marketing, custom content and lofty price tags for exclusive tablet campaigns.