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Newspapers Without Paper

What’s interesting — and for many disturbing — about this kind of story [1] is its not-quite-explicit core assumption. Here are the highlights:

Senior figures at Guardian News & Media are seriously discussing the move to an entirely online operation, it has been claimed, leaving Mr Rusbridger increasingly isolated.

The longstanding Guardian chief wants to develop the Guardian’s digital-only US operation before pulling the plug on the print edition, in the hope that it will provide a useful blueprint for the online business in Britain.

However, trustees of the Scott Trust, GNM’s ultimate owner, fear it does not have enough cash on its books to sustain the newspapers for that long, according to More About Advertising, the website run by former Marketing Week editor Stephen Foster.

The core assumption I refer to? That it’s not a question of whether the Guardian will end its print edition, but only when. But if print is a money-loser — and I keep hearing that is is, for newspaper after newspaper — why not end it now, today, and go purely digital?

Why shouldn’t newspapers around the world, or at least in the most internet-saturated parts of the world, just stop the presses — especially if they know they’ll have to do it anyway, and in the meantime the cash is draining away? What are the restraining factors? Habit and tradition? Powerful executives who have known the print world for so long that they can’t imagine life without it? The half-conscious feeling that paper and ink are real in ways that pixels and bits are not, and that if you only have pixels and bits you might as well be just a blogger, without a saleable product you can hold in your hand?

This inquiring mind really, really wants to know.

UPDATE: In addition to the really smart people weighing in below — if I could have picked people to answer I couldn’t have done much better — Nick Carr weighs in at his place [2].

SECOND UPDATE: The Guardian says this story is not true: they have no plans to abandon print. [3]

16 Comments (Open | Close)

16 Comments To "Newspapers Without Paper"

#1 Comment By David Ryan On October 17, 2012 @ 10:03 am

I asked James Bennet, editor of The Atlantic, point blank (and on twitter!), “If you put the entire issue online for free, why should I resubscribe, and why do you even bother to print it?” His answer was simply that there are still a lot of readers that like having the content bundled that way; which I take to mean that it’s still profitable to bundle it that way. By extension, I suspect a lot of of what we hear about “dead tree” is simply nonsense. To whit: If we stopped selling our DVDs tomorrow and went all virtual it would cut our revenues by at least half, which is to say enough people pay a premium for hard copy, and pay enough of a premium to make hardcopy profitable. Sometimes more profitable than digital copy. Robert “Free Ride” Lavine has more and broader details on this point in the music industry, but one fact I remember was that 95% people bought Susan Boyle’s record on CD, inspite of the fact it was available on iTunes.

#2 Comment By Jake Meador On October 17, 2012 @ 11:00 am

One issue is advertising revenue. If you look at this chart over at Ezra Klein’s blog ( [4]), you can see the issue: Spending on print advertising is massively out of proportion with its readership while spending on web is slightly below what it could be and spending on mobile advertisements is well below what it could be.

Point being: The issue for journalism isn’t that the money is gone. The issue is that the business model is transitioning at one speed and the ad spending is transitioning at another speed. Lots of people have already made the move to nonprint media, but the advertising dollars haven’t moved over as quickly. So print isn’t sustainable in the sense that we’re spending too much money on it, but in terms of advertising revenue print is still the top dog.

So if you drop your print entirely, what happens to the ad revenue you were bringing in? You lose a huge expense, but are you also losing a big chunk of revenue? That graph Klein has would suggest that you are.

#3 Comment By Joe Carter On October 17, 2012 @ 11:19 am

Having once owned a small regional newspaper, I faced a similar situation so I suspect the answer is: cash flow and contracts. Many of the liabilities (such as 401K contributions for employees) can be pushed to the end of the year and can be covered by loans. But ceasing publication of the print edition means an immediate cessation of print advertising and print subscription revenues. You’d be surprised how much “float” that allows on a month to month basis. Also the print edition has contractual obligations to both the subscribers and the advertisers. If they went out to business, they could leave that for the bankruptcy court. But when a paper continues to be an ongoing concern, you can’t just ignore the contracts you’ve already signed—and breaking them can be expensive. For example, canceling the print edition means providing some sort of refund to paid subscribers. That’s money they likely do not have which further exasperates the cash flow problems.

#4 Comment By Orthodoxdj On October 17, 2012 @ 11:59 am

I don’t know much about the business world, but I miss paper newspapers. I live a small city. The newspaper here is still printed everyday, but it has gotten smaller and smaller. If it ever goes to online only, I will be very sad.

#5 Comment By Wick Allison On October 17, 2012 @ 12:17 pm

I’ll add my second to Joe Carter, with an addition: The conundrum is that print advertising commands significantly higher prices than online advertising. The reason is that print advertising demonstrably works. The problem, though, is that print readership for mass products like newspapers is collapsing. So, as a newspaper owner, what to do? To go entirely online now, as Mr. Carter suggests, means eliminating the huge float of print advertising and cutting staff by up to 80 percent. Once done, that action is irreversible. But what if there is a natural level at which plunging readership settles? And, what if by making adjustments on the cost side, one is able to restore profitability to the print product based on the premium print advertising will continue to command? Risking everything on online at this point seems a risk too big to take.

I would like to emphasize that we are talking about the 200 or so metro newspapers here. Small-town and suburban newspapers have their own challenges, but not nearly as stark a choice to make. And magazines are another case altogether. Niche magazines have actually been helped enormously by the internet.

#6 Comment By Darrell Judd On October 17, 2012 @ 12:58 pm

You could answer your own question by describing an actually successful online-only news source that does not involve becoming a .org or running charity telethons.

It’s still not a business.

#7 Comment By Karen On October 17, 2012 @ 1:18 pm

Technology will allow people to print their magazine or newspaper if that’s what they want – you can sort of do that already but not in a way that “looks” like a magazine or newspaper we recognize. Print on demand technology will quickly serve those who want a trad looking publication. Tablet performance continues to be improved as well, which will shift many paper readers to that technology, especially as tablets get less expensive. Local papers can thrive as print publications – and many do – because the economies of scale are very different and they fill different needs than big national papers. The progressive friends I have who push for newspapers getting non profit status or public funding amuse me no end. If the people at the New York Times, including the fin family who runs it, can’t figure out how to make a profit, that’s their fault – aren’t they the smartest people in the room, after all?

#8 Comment By Alan Jacobs On October 17, 2012 @ 2:24 pm

One further thing I’d like to ask you knowledgeable people: How similar are the conditions of magazines and newspapers? I mentioned only newspapers in my post because it seems to me — note: seems — that the situation for magazines is not so uniformly bad, with at least some folks (most notably The Atlantic but also, with a radically different business model, The New York Review of Books) staying in the black.

#9 Comment By Jake Meador On October 17, 2012 @ 3:01 pm

Dr. Jacobs – I’m not as knowledgeable about newspapers vs magazines as others here (I’ve never worked at a magazine, only newspapers), but I suspect one layer to this is that newspapers are threatened by the internet in ways that magazines aren’t. A daily paper is made obsolete, even more than it already was by TV, by the internet. At least with TV you could say “Well, we’re still the first to break the story in print.” (“Print” meaning something you read, in this case.) The internet took that away.

Put another way, the internet as a medium can do what a newspaper does, no problem. Magazines, being more niche-driven and far less regular, are a different animal. Magazines were never about breaking news or being part of a daily reading routine. In fact, the internet is a huge boost to magazines b/c it enables them to do a bit more of the breaking news/instant analysis type coverage. (It’s striking that the 47% video wasn’t broken by WaPo, NYT, or some other newspaper. It was broken by a magazine, Mother Jones.)

Maybe one way to put it – and I know this is extremely reductionistic, but maybe it’s a starting point – is to say that newspapers have historically been about informing while magazines have been more about analyzing.

#10 Comment By David Ryan On October 17, 2012 @ 4:27 pm

Per Mr. Carter, a good place to start getting an understanding would be by having a look at The Guardian’s media kit. My guess is it will show that advertisers are still willing to pay a premium to run ads in a physical product vs the same number of “eyeballs” on the guardian website.

#11 Comment By Lulu On October 17, 2012 @ 5:19 pm

I don’t have any facts to back up this observation, but I read advertising in print on paper far more than I do on the Web because advertising on paper is less intrusive and therefore less annoying to me. Ads in black and white in the NYT print edition just sit serenely off to the corner, but ads on the NYT Web site jump insistently onto the screen; because it seems like a choice to look at the stationary ad, my eyes tend to oblige, but the look-at-me! quality of Web ads makes me “disappear” them with a click of the mouse.

Could that be why print advertising is still more profitable?

#12 Comment By Jake Meador On October 18, 2012 @ 9:22 am

Heh, and as if on cue from yesterday’s discussion… Newsweek is going all digital starting in 2013.

#13 Comment By David Ryan On October 18, 2012 @ 11:21 am

Tweet from Nicholas Jackson about the end of NW print addition:

[5]

#14 Comment By Sean Scallon On October 18, 2012 @ 4:24 pm

“Why shouldn’t newspapers around the world, or at least in the most internet-saturated parts of the world, just stop the presses — especially if they know they’ll have to do it anyway, and in the meantime the cash is draining away?”

When the day comes when almost everyone, not just the young and hip, can afford and IPad is the day the presses come to a complete halt. It will happenen but so long as reading actual paper is cheaper and easier, then print shall remain, especially among an older generation of readers.

#15 Comment By Michael On October 19, 2012 @ 5:21 am

Print objects have a much wider circulation than the name on the bill. Family, friends, people in the coffee shop where the item gets left on the table when you’re finished reading it.

Digital subscription mechanisms go to great lengths to insure that only the purchaser is allowed to read the item. Thus, literal “circulation” is heavily reduced. This matters, as far as advertisers are concerned.

But if you want to see what probably is the future of short-term text communications, browse zinio.com, as Zinio is the leader in the digital publishing field. New Scientist publishes its digital subscription through them, as do many other name brands.

#16 Comment By Bob On October 20, 2012 @ 9:56 am

As somebody who writes for a small-town newspaper, I can tell you that we offer an online subscription in which people can download a PDF copy of the entire paper. I don’t have all the stats as to how many people pay for that subscription, but it is a cheaper method of offering subscriptions because you cut down on the expenditures with printing the paper.

We have not used this process to entirely replace printed material, though, as there are still a lot of people who prefer to buy a print subscription, or at the very least, buy single copies of printed material.

While I do believe the switch from printed to online material is inevitable, I don’t believe conditions allow for an immediate switch from “all print” to “all online.” It’s going to take time for the switch to fully take place.