Newspaper Industry Death Watch

As some of my readers know, I spent a quarter century in the news business (more if you include the time I spent throwing newspapers up on lawns as a kid). I started at age 19 in the composing room (when newspapers still had them) and had the privilege of working among some of the best in the profession while serving as a foreign and Washington-based correspondent. I care deeply about newspapers, and still read three or four every day.

So I couldn't help but notice the bad news on the business page today. Profits at the New York Times Co. and the Tribune Co. were down again. The Times is planning to triple its cost-cutting in the next two years, the report said. At the Tribune, according to the Wall Street Journal, publishing revenue dropped 9% to $920 million. Ad revenue fell 11%. Online revenue rose 17% to $66 million. Circulation revenue fell 6%."

Allow me to deconstruct those numbers a bit. The decline in ALL revenue was greater than ALL internet revenue combined. In other words, for every $8 decline in print revenue, the company picked up $1 in internet revenue.

We're at the peak of a business cycle (with many recessionary winds blowing, but that is another story). Advertising has always been a coincident indicator, in other words, it rises and falls in tandem with the overall economy. Advertising dollars are migrating away from print to the internet, broadcasting and other sources like direct mail. Companies like Google and Yahoo are rolling in cash.

But they hire very few journalists (if any). And those they do hire have very few standards. I had lunch yesterday with a former reporter trying to raise a little money to catch on at a univeresity (apparently the people who get teaching jobs now are the ones who can raise their own salaries, and pay a 50 percent kickback to the university).

She had done a bit of freelancing for a mainstream newspaper and an internet outlet. The former paid about 40 cents a word; the latter paid about 10 cents a word. I can remember earlier in this decade (when I was doing much more freelancing than I am now) that I could get $2 a word from some outlets, and $1 from unprofitable (usually non-profit political mags) ones. It appears that internet economy is collapsing payscales, too.

Which brings me to my final complaint of the morning. I get something called the Alternet in my in-box every day. It is a bunch of stories from a progressive point of view, many of them from well known names like Amy Goodman or Barbara Ehrenreich. But it also has a lot of young journalistic talent who are getting their initial training in the field by publishing on this site. All well and good.

But today's banner headline involved a shriek about how hedge-fund short-selling could lead to a great crash like 1929. With today's stock market acting kind of wobbly, and, as I mentioned earlier, a lot of signs that the economy may be heading south soon, I was intrigued. So I read it. The reporter quoted a few investors who had been burned by short-sellers (they operate their own websites, which disclosed that fact even though the reporter did not). He never called the Securities and Exchange Commission to get its comments on the systemic risk posed by hedge fund activities. He never called the Federal Reserve, which closely monitors and regulates capital markets for systemic risk threats, about its analysis of the situation. In short, no real reporting.

It is often said that our democracy cannot survive without a free press. But when the only information the new economy's free press provides is ill- or uninformed opinion, what kind of democracy will we have?

Posted by gooznews at July 26, 2007 08:58 AM