Print media is not on deathbed

If you listen to the media critics, you might think it is time to stop the presses and go home.

The critics will tell you that newspapers across the country are bleeding money. They will say paper is too expensive. They will point out that readership of newspapers has fallen, which must mean the industry is dying.

 They will say that college students don’t read paper newspapers anymore. They will point to newsroom layoffs and buyouts and say that the end is nigh for paper-based journalism.

The problem is, they are wrong.

In a typical newspaper, the actual paper and ink accounts for less than 15 percent of total expenses. The real cost is the people, the journalists who gather and deliver the news day in and day out.

Those people would still be necessary even if you publish online only, which is why I call myself platform agnostic. As long as I am being paid to be a journalist, I don’t care if my work comes delivered on paper or through pixels. But for now, paper is the best and most profitable delivery method. Don’t believe me? Read on.

Setting your focus on the ink and paper is short sighted and shows a lack of understanding in how the news industry operates.

In one sense, though, the media critics are right — there is something that is ailing newspapers. But it is not the paper they are printed on. The problem with newspapers can be summed up in one word — Craigslist.

From a consumer’s standpoint, Craigslist is great. It offers free classifieds — something that used to cost money for the typical landlord, or potential employer, or seller of used dishwashers. And how could getting that service for free be a bad thing?

Well, from the news industry’s perspective, those $30 ads used to add up to big money. They used to pay the top salaries for the experienced and best reporters — journalists who are now losing their jobs.

But you know what? Craigslist is a better product than the majority of print classified advertising, and we need to accept that the classified revenue stream is gone and will never come back.

The problem is that classifieds added up to a significant portion of a typical newspaper’s profits each year. To see just how much money we are talking about, lets look at Lee Enterprises.

Never heard of Lee Enterprises? That’s what makes them the perfect bellwether for the typical newspaper. Lee Enterprises owns about 350 small newspapers all across the nation. Since their biggest newspaper is the St. Louis Post Dispatch (and not a behemoth in New York or Washington, D.C.), Lee gives us a snapshot of what is going on under the hood of a typical newspaper.

In 2006, before Craigslist went fully mainstream, Lee Enterprises earned close to 40 percent of its annual revenues from classified advertising — more than $300 million. By 2009, that number had plummeted nearly in half to $162 million, cutting the heart out of Lee’s balance sheet.

By comparison, Lee’s traditional advertising accounted for $464 million in 2006 and only fell by about 20 percent in that same timeframe (which, if you remember, includes the Great Recession).

Absent that post-Craigslist drop in classifieds, things would not necessarily be looking rosy in our nation’s newsrooms, but we wouldn’t be seeing the bloodbath going on today at newspapers across the country.

Classifieds and traditional advertising fell a combined 30 percent over three years. In response, newspapers had to cut their expenses accordingly and slashed their staffs by a similar number.

By any measure, it hurts to see veteran news reporters leave their longtime posts. There is no denying that. But, with the dominance of Craigslist, there was also no avoiding it.

The reality, however, is that, far from being an ominous sign, those cuts are actually a healthy move for the industry.

With their leaner personnel roles, newsrooms can continue operating within their tighter post-Craigslist budgets.

Most publicly traded newspapers are now posting positive numbers, and many are even on track to post profits for the first quarter of this year.

And the best news is that advertising traditionally follows the overall economy, and both the economy and advertising are looking up for this year.

Saying that newspapers’ woes can be chalked up to the Internet is short sighted and naive.

For now, the business model for print publications is solid, and I plan to read my newspaper in its paper edition long into the future — or at least until something comes along that does the job better. But that’s a discussion for another day.



Michael Giusti is the Maroon adviser and teaches journalism in the

School of Mass Communication.

He can be reached at

mdgiusti@loyno.eduOn the Record is a weekly

column open to any member

of Loyola’s faculty and staff.

Those interested can e-mail

letter@loyno.edu



 

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8 comments

Anonymous

Mon Apr 5 2010 20:50

Wait until the next Craigslist comes around. Readership means very little. What matters is where advertisers want to put their money.

Anonymous

Fri Mar 26 2010 08:48

see my song about print media and snailmail and snailpapers, humor here

Anonymous

Thu Mar 25 2010 11:10

Newspapers are the first and still the best wireless, portable news devices available. Newspapers have higher profit margins than oil companies, and larger audiences in their markets than the super bowl. Consolidation of newspaper companies and the subsequent debt service is the biggest reason their profits are down, far obscuring the drops in ad revenues. Union contracts in newsrooms and production facilities make it difficult for newspapers to cut their costs to match revenue's ebb and flow. The average reporter contributes less than one story per issue in non-union shops, and less than one story per week in union shops. Unions kill every business they invade, and newspapers are no exception. The newspapers with the most union employees are in the most financial peril. But newspapers will survive, despite unionized journalists and disgruntled former journalists.

Ben

Thu Mar 25 2010 09:52

No offence, but it is opinions like yours that are leading newspapers into a full sense of security. Newspapers and newspaper advertising in their current form is all but dead. Its team papers relished the future, the journalists are the blood of the organisation, whether they stay in print form or internet or ipad etc. Without them the paper goes no where except bust, if they turn to the net for instance they will still have an audience (and an ever expanding one). As they say, for every newspaper reader who dies they are not replaced, newspapers and their distribution cycle simply are not cost effective any more and the standard advertising model does not work. With proper effort and skills online papers and lower circulation newspapers do work and do hugely turnaround profits, if done right.

Tim Windsor

Thu Mar 25 2010 06:58

The old saw goes: "You're entitled to your own opinions, but not your own facts" is due for an invocation here. While it may be true that paper and ink account for 15% of some newspaper's budgets, that's a meaningless figure, not unlike citing the price of sheet-metal and paint in the car manufacturing process. In truth, the entire print production process -- printing it, binding and baling it, and driving it to your home or to the newsstand -- accounts for something much more like 60% of a typical newspaper's cost. The journalists themselves represent a much, much smaller slice. So your base assumption is just wrong.

As for *whether* newspapers should survive in print, that's opinion. In my opinion, strong environmental and business efficiency arguments can be made against the paper part of a newspaper company. Why saddle the business with 19th century technology for the sake of nostalgia? True, papers have made a mess of the digital transformation so far, but that doesn't mean they should just give up and re-embrace the wasteful medium of print.

Anonymous

Wed Mar 24 2010 02:14

The most shocking thing about your commentary is that you are "paid to be a journalist." How can that be? I've never seen your work before, but I'm not impressed. You are right in pointing out that Craigslist usurped a big chunk of revenue (and provides a better delivery vehicle), and you are correct in saying that humans are the biggest cost of newspapers. However, you are dead wrong about staff cuts being better for the industry. Newspapers are relying more and more on inexperienced freelancers and agenda-driven readers to fill their pages. More mistakes are getting into newspapers -- and not just typos because the copy desk is shorthanded, but huge gaffes made by people who don't understand or care about journalistic ethics. Newshole is shrinking, and papers across the country are all starting to look like an AP-dominated USA Today. Arts critics are often the first to be laid off, with papers filling the gaps with so many wire reviews that only a handful of critical voices remain. Meanwhile, the profits that you mention are being recycled into bonuses for the same editors and executives whose bad decisions aided the economic decline of news organizations. You apparently still have a platform to address these issues, and yet you use it to say, "Hey, it's OK -- I've got a job." It will be interesting to see if your voice will still be heard once you're relegated to the vast wasteland of the blogosphere.

Anonymous

Sun Mar 21 2010 12:42

Who needs paper? newspapers s*ck

Anonymous

Sat Mar 20 2010 01:40

Hogwash

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