Roger Rabbit Didn’t Kill the Newspaper

Who killed the American newspaper? Craig Newmark did. Fifteen years ago, the IBM engineer started an email list for his friends. That list became Craigslist and has, along with the Internet, been largely responsible for upsetting the newspaper’s century-old revenue model.

It’s hard to imagine, but once upon a time, newspapers could and did make people rich, very rich. William Randolph Hearst and Joseph Pulitzer amassed massive fortunes and power through the newspaper empires. The newspaper business was so revenue rich that millions could be made even in its peripheral elements: the newsstands that sold the papers, and the companies that supplied paper and ink.

The newspaper business made so much money because it essentially operated a monopoly within local metropolitan areas. Employers with job openings, people with unwanted cars or extra bulldog puppies – they all had to turn to the local newspaper’s classified section. Obviously, the old model is not working anymore. It’s much cheaper to place an ad on Craigslist and newspapers all over America have been bleeding red ink since.

Last year was particularly bloody. Newspapers like the Christian Science Monitor and the Seattle Post-Intelligencer stopped putting out daily print editions, slashed their newsrooms and went online. Some papers, such as the Los Angeles Times and the Chicago Tribune among them, filed for bankruptcy protection; others, like the Rocky Mountain News, just went bankrupt. Even the New York Times, The Gray Lady, lost its owners money month after month.

Despite a sizable cottage industry dedicated to diagnosing the newspaper’s various maladies, no real solutions have appeared. Instead, those in the industry spend an inordinate amount of time reminiscing about the good old days. It can be hard to sympathize with this handwringing. Newspapers, after all, contributed to their own downfall by becoming complacent. For many years, papers had monopolies over information and over classified ads. Things were good and as long as the money kept rolling in newspapers did little to adapt to the changing times, little to serve its readers better.

Then one day, the newspaper business woke up and found that the old revenue model and even the paper itself was increasingly irrelevant. People didn’t want to pay for day-old news that they could access for free online as events unfolded. Newspapers had become (excuse the pun) yesterday’s news.

And yet, even though the delivery and revenue model is outmoded, the need for good reporting has hardly gone away. People still want news. If anything, the demand is more than it’s ever been. The Internet has made news more important; it just hasn’t figured out how to pay for it. And that’s one reality that hasn’t changed: news still costs money to produce, and therein lies the gnarly dilemma.

Last week, the New York Times offered what it believes could be a new way to meet its operating expenses. Starting in 2011, the Times will charge an undetermined amount for access to its Web site, Readers will be given a limited number of free articles; any additional articles will have to be paid for. Print subscribers will have free and full access online. Many other papers have looked at implementing a similar fee model for online content, but most, afraid of driving readers away, have ultimately decided not to.

The reaction to the Times’ proposal has been mixed. Some say that it’s about time. Others say that the pay wall is at odds with the way the Web works. The Internet feeds on page views. Doing anything that could turn potential viewers away is foolhardy and demonstrates a fundamental misreading of the way that business works in the Internet age.

But it could just work. The Financial Times and the Wall Street Journal are two papers that have fared better than the industry as a whole, mostly because of the fees they charge for online access. They can afford to do so because they offer a product that people think is unique enough to justify the cost. The New York Times is not a business-oriented paper like the other two, but as America’s premier paper, it just might get away with it.

So who really killed the American newspaper? Well, Craig Newmark probably sped up the end of the newspaper as it used to be. The Internet probably helped. But in the end, the American newspaper did itself in. Except, the newspaper is not quite dead yet. If newspapers are going to survive into the future, bold action is going to be needed. Other papers might not be able to do the same things that the New York Times can get away with, but that doesn’t mean that inaction is a viable option either. Papers are going to have to be willing to take risks, try new things and be prepared to make painful mistakes; ultimately, newspapers need to grow bigger balls. And whatever you may think about the New York Times’ decision last week, there is no doubt that the paper has done just that.

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