Washington DC, March 10, 2009 --  

Big city newspapers are facing final collapse as innovative news organizations emerge from the rubble.

The death knell is chiming for the Seattle Post-Intelligencer. Today, the Hearst Corporation reached its self-imposed deadline for selling or closing down the 146-year-old newspaper, with no buyer announced.¹ This is just the latest in a string of high-profile retrenchments of major American newspapers. Last month, the Rocky Mountain News closed down, and last year the Christian Science Monitor delivered its last issue in print form. The Detroit Free Press has announced an end to 7-day print delivery.²

Plenty of other big city newspapers are in trouble, too, and many won't survive the year. Reports of desperate moves abound. The New York Times infamously sold half of the office tower it just built to help cover mounting losses.³ The Poynter Institute announced plans to sell its profitable Congressional Quarterly division in order to raise money to shore-up its money bleeding St. Petersburg Times⁴ -- a move that amounts to eating the goose that lays the golden egg.

Perhaps the most interesting case study of the transformation of newspapers is currently taking place in San Francisco, the cradle of the once mighty Hearst empire. Last month, the Hearst Corporation told the California Media Guild, the union representing many Chronicle employees, that it is seeking massive job cuts in order to stem $50 million in annual losses.⁵ Even if it can push through the job cuts, the company told employees it may still have to close the newspaper.⁶

If the Chronicle closes down, it will make San Francisco as the first major city in the country to not have a daily newspaper. (Almost.) The qualification is needed because the Hearst corporation's former flagship, the San Francisco Examiner, still exists in a non-traditional form. Hearst shut down the paper in 2000, after it bought its higher-circulation cross-town rival, and sold off the remnants.

Since then, it has been resurrected. Now owned by Clarity Media Group, the company publishes a free daily tabloid with targeted delivery to households in high-income census tracts -- the exact types of readers that advertisers love.⁷ But the newspaper is far from traditional big city daily -- it doesn't sell subscriptions, doesn't offer delivery to less affluent neighborhoods, and isn't available every day unless you pick it up from a newspaper box.

The company has expanded its experiment to include Washington, DC, where its Washington Examiner uses the same business model. Is it profitable? Because the company is privately held, outsiders don't know. But if the February 27 copy of the Washington Examiner is any measure, advertisers love it. The once thin tabloid had swelled to over 50 pages in that issue -- chock full of advertisements.

Another interesting experiment is planned for this summer, where the Los Angeles Daily News plans distribution of a customized print newspaper containing only sections selected by readers. Instead of printing the papers at a central plant, they'll be sent to a printer installed in subscribers' homes.⁸ While this may seem inefficient, given that web can already deliver news to people's homes, such a system would be a good alternative for older, less-web savvy readers, and others who prefer a printed copy.

Despite these experiments, no business model is ready to challenge the dominant web newspaper editions, supported by advertising, that became common over the past decade. While they have attracted plenty of readers, the highly competitive internet advertising market has kept newspapers from receiving nearly as much revenue from online ads as from print.

As a result, web-only editions have not been able to support the large editorial staff typical of printed newspapers. This has led industry veterans, who spent their formative years during the industry's heyday, to cry foul. One of these veterans, Walter Isaacson, called for restructuring web journalism in a recent cover piece in Time magazine.

Isaacson's solution for the industry's woes is to bring subscribers back into the equation through micropayments for individual articles. Paid readers are critical, he says, because they keep advertisers from controlling content, and provide an alternate revenue source for downturns in the business cycle when advertising revenue flags.⁹

His arguments are unconvincing. CBS' 60 Minutes news magazine has long shown that quality journalism does not require subscribers and is not incompatible with advertising. And had big city news organizations cut costs and socked away money during the strong advertising markets of the mid-2000s (instead of burning through money as if it were the heyday of newspapers) maybe they wouldn't be so desperate.

No, web newspapers funded by advertising won't ever be able to support the huge staffs and high newsroom budgets of years gone by -- and that isn't necessarily a bad thing. Those who think that a large staff is synonymous with quality journalism need to read the vast majority of drivel that filled most of the middle pages of fat American newspapers from 25 years ago.

As the industry gets leaner, and new business models get tried, let there be no question that the news will go on. The overwhelming success of news portals like Google has proven the public's continued healthy appetite for journalism. Most big city newsrooms, however, with their large budgets and inefficient business models, simply won't be part of the equation.

Full Disclosure: David G. Young is married to a writer for Congressional Quarterly.

Notes:

1. Fox News, Seattle Post-Intelligencer Will Shut Down Paper, Go Online Only, Friday, March 06, 2009

2. Detroit Free Press, Detroit Free Press and News Redirect Staff, Resources to Digital Delivery of News, December 16, 2008

3. The Guardian, New York Times publisher to sell headquarters, March 9, 2009

4. New York Times, Congressional Quarterly Is for Sale, January 28, 2009

5. International Herald Tribune, Hearst threatens to close San Francisco newspaper, February 25, 2009

6. Fox News, Ibid.

7. American Journalism Review, Home Free, April/May 2007

8. New York Times, Could Customized Newspapers Bring Readers Back? March 8, 2009

9. Time, How to Save Your Newspaper, February 5, 2009