Monday, July 23, 2018

What Is Happening to the Newspapers? The New York Daily News As The Story

The New York Daily News will axe half of its editorial staff.  The basic reason:

Like so many other print publications, the Daily News has battled faltering advertising revenue amid a transition to a digitally centric media landscape. The paper reportedly lost $90.4 million over the last three years.
 The killer of newspapers is the Internet because of two distinct problems it causes for traditional and even digital newspapers:

The first one is the intrinsic economic problem of information as a product.  Once an article, say, is posted online, it can be copied, saved, distributed to many other sources and quoted in all sorts of other articles without the original creator of the information getting any further payment for it.

Attempts to stop such "free" use can be expensive.  Hiring lawyers might work, but nobody can afford to sue every single stolen use.  Technologies can make it harder for someone to see the information without paying for it, and they can also make it harder for that stolen information to be further distributed, but anyone who has spent any time online knows that those devices can be bypassed without very high costs.

What all this means is that paying for news has become voluntary, a bit like the way public television tries to attract donations.  Just as most people who watch public television do not donate, neither will most  consumers of newspaper information subscribe to the paper if they can avoid doing so.

The consequence of this is that the subscription revenues of newspapers will decline.

The second way the Internet is killing newspapers is by taking away their advertising revenues.  Advertising used to be how most (including local) newspapers got their revenue, but innovations such as Craigslist have deeply cut into that revenue source.

All this creates a fascinating problem:  It's in our narrow self-interest to read news for nothing, if we can get away with it.  But it's very much against our wider long-term interest to do so.

That's because nobody can ultimately produce information without getting compensated for it.  Writers need food and rent money, for instance.  But when the newspapers' revenues fall, their owners will start laying off the staff which produces the information.

First to go will be foreign staff, probably, then editors (so be prepared for unchecked facts and bad spelling), then most writers will be replaced by free-lancers who are expected to work for "exposure,"* then piped-in general content will replace local news and so on.  Investigative reporting is very expensive, and if it will not be funded, corrupt politicians will certainly cheer.

In other words, democracy requires a free press, but right now free press is in peril not only because of Trump's view of it as the enemy of people, but also because we do not have a good business model on how it might survive.**

* This argument is one I have heard often.  It always makes me think of the fact that in the cold Finnish winters exposure means death.

** There are some such models, most based on nonprofit funding structures where the consumption of news is separated from the funding of those news.  That model might work in a limited sense (most political media already relies on it), but it's unlikely to produce the economically optimal level of, say, investigative news.