Newspapers Struggle to find a New Business Model
by Gerald Trites, FCA

Ever since the world wide web got rolling twenty years ago, people have been predicting the end of print media. The predictions were that the end of the Gutenberg Age had come, that newspapers, books of all kinds and any other paper media were destined for the dustheap.

Now after all that time, we still have books. A recent poll revealed that a majority of people still felt that paperbacks would survive, even over competition like the Kindle. There are still newspapers around the world, although the evidence suggests that they are not read as much as they used to be and subscriptions have been declining. What happened?

There has been an evolution going on. In the case of books, basic information based books like those on business have declined dramatically. It is simply easier and faster for one to get information from the web than it is by wading through printed books. On the other hand, novels continue to be written, and people can be seen in public places, like airlanes and subways, reading paperbacks. Sure there is competition from iPods and laptops, but the paperbacks are still there.

Newspapers are a different deal. You don't often see them being read in public places any more. Any trip on a commuter train will show the newspapers to be in a minority. So, where do people get their news?

It seems they get a lot of it from television and the web. With regard to the web, they get a lot of it from the online versions of - yes - newspapers. Some make use of blogs and some have their favourite bloggers. The big difference between newspapers and blogs, though, is that newspapers are written and run by journalists in a newsroom - people with comprehensive training on how to obtain, verify, source and present stories in a reliable and accurate way. Blogs are often produced by people with little such training. Therefore, newspapers should be a more reliable source of information than blogs. Also, blogs tend to have a relatively narrow focus, while newspapers tend to cover a wide variety of areas of interest - news, weather, sports, community affairs, politics, comics, classified ads, crossword puzzles, you name it. Blogs don't do that. Some people think that blogs can substitute for newspapers, but that's a kneejerk reaction that simply does not stand up to scrutiny.

Newspapers have been trying over the past twenty years to find a business model that accomodates the web. Some of them charge for content. Some charged for content and then changed their minds. Most simply offered up their content for free. But with subscriptions to their print versions declining, the recession has been the tipping point for some papers.

The question is, what are they to do? There are options but not very many. Here are a few:

1. Continue to offer online content free and hope to increase online advertising revenue,
2. Offer online content on a subscription basis,
3. Offer online content on a pay-as-you-read basis,
4. Discontinue the print version, then refer back to 1, 2 or 3.

Their challenge is to come up with a business model that produces enough revenue to support their newsroom and the kind of standards that have made them an important part of our society, indeed, as the Globe and Mail puts it in a recent article, an important element of our democracy.

The problem is all of these options have shortcomings. Offering content free does not generate revenue. Advertising revenue has not been sufficient to cover costs. To require subscriptions for online content just turns people away to content that they do not have to pay for. Charging subscriptions would require unprecedented collaboration among all newspapers to work. And even then there would be other sources. Pay-as-you-go might have potential. Some have tried it, but again, the competition would need to do the same. Discontinuing the print version loses revenue, caves in and would leave parts of the populace without the news, because not everyone has and uses a computer on the internet.

The bigger risk appears to be with newspapers for smaller cities and communities. Newspapers that have national and international reach seem able to survive. But there is a growing list of cities that have lost or may lose newspapers - Seattle, Denver, Minneapolis and others, maybe San Francisco are some mentioned in the Globe article. Is this just a reflection of tough economic times on a struggling industry? Or is it part of something bigger? Is it part of the continuing decline of community in our society?

The role of families (along with communities) has also declined drastically over the past twenty years or so. We have attempted to maintain the services they provided by outsourcing, particularly the outsourcing of child rearing to day care, sports teams and schools.

For communities, newspapers have played an important role in maintaining public awareness of the community environment, the activities of their politicians, keeping them accountable and providing a forum of discussion among its members. To whom do we outsource those activities? Who will step in and take up the challenge? There are no obvious contenders.

But the newspapers are not dead yet. They do need to adapt with bold and new initiatives that recognize the role that the web plays in society - that it is more than a medium for conveying information, but rather itself a forum for interaction. The newspapers that capitalize on this aspect of the web will have the better chance. That means going beyond the provision of reader comments on stories, although that is useful. It means having people join rather than subscribe. It means making the newspapers truly interactive, social networking sites - not copies of Facebook type sites, but not totally unlike them either.

The Web has transformed society. It has made us much more interactive and engaged with each other in new and diferent ways. That is what people want. They don't want just to be told, they want to discuss. They want to hear and be heard. They truly want to be part of something - a community of some kind. Newspapers have recognized some of these trends and tried to respond to them. They just haven't gone far enough.