Many newspaper stocks are down over 90% from five years ago. Some public companies in the industry, most notably the Journal Register Company, have gone bankrupt. The combination of huge debt taken on for acquisitions of other newspapers, and profit margins undermined by a sharp drop in advertising, have put the newspaper industry on the brink of extinction.
The troubles of newspapers are old news. Most Wall Street analysts expect that the most profitable revenue for most papers — namely, classifieds — won’t bounce back at all after the recession. Sites like Cragslist have taken too much of the market That leaves large metropolitan papers with expensive staffs and the cost of printing and distributing huge numbers of newspapers.
The news about newspapers is what is being done to save them. Most large papers have moved a great deal of their content online. According to comScore, The New York Times (NYT) properties are among the fifteen most visited families of sites on the web in the U.S. Online advertising is down this year, but not nearly as much as print.
Several companies have been formed to help newspapers make money on the internet. The most well-known of these is Journalism Online, started by a group of partners including the former publisher of The Wall Street Journal.
Google (GOOG) is the newspaper industry’s latest white night. It has the software capacity to help index content to make it easier to search. Google’s AdWords program offers publisher the chance to sell ads next to the search results on their online newspaper editions.
But, the most intriguing opportunity Google offers is a new micropayment system which allows online content customers to make very small payments of a few cents or a few dollars to look at a specific article or series of articles. A dollar may not seem like much, but the theory is that, if content is cheap enough, hundreds of thousands of people will make the very modest investment to read something that interests them. Google would offer publishers a package that will allow readers to sign on to accounts for doing everything from paying for an article to taking out a classified advertisement.
Google’s Software Isn’t the Problem
The weakness of the program that Google offers is not its software. It is that very few newspaper customers are likely to use it.
Because the internet is such a vast tool for content creation, and because interlinking is the lifeblood of any web-based content property, almost every article that runs in one publication can be found somewhere else on the internet — for free.
Aggregation sights like Huffington Post and Newser pull together the most popular and well-read articles from major newspapers, magazines, and online news sources. Even at the local level, many cities have web sites with enough local data that they compete with newspapers for listings of event, arts reviews, and local politics.
A number of media analysts say “the news wants to be free.” Because so much of it already is, newspapers can’t put the genie back into the bottle. It is too late for them to charge for what the public has gotten gratis for years.
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