How newspapers blew it in the mid-1990s

“The business model that had fueled the golden age of American newspapers broke somewhere around 2005. Total advertising revenues began dropping, and, at least at this writing, it seems unlikely they will rise appreciably again, at least until print newspapers have literally disappeared and been replaced by some digital future that is still emerging.”

That’s how ProPublica general manager and former Wall Street Journal assistant publisher Richard Tofel begins his 30-page e-essay, “Why American Newspapers Gave Away The Future,” which will be available on Amazon.com and other sites beginning Wednesday.

Tofel asks: Why did nearly all newspaper publishers decide in the mid-1990s to put their content on the Internet free of charge?

How, as a visitor from another planet might ask, did a large industry that had successfully charged customers for its product for more than a century come to decide to give that product away and thus threaten its very existence? The answer can be found on any number of levels, though I think it ultimately lies in an understanding of the culture of newspapers and newspapering.

He explores that in his essay, and makes these observations:

Richard Tofel

* Newspapers feared they’d be regarded as “Square” if they asked readers to pay for content. (“Simply put, the notion that information wants to be free had become Hip.”)

* “The economic future of newspapers depends on their maintaining a near-monopoly on high-quality local news and on achieving a substantial level of circulation revenues, ideally online.”

* Most people think newspapers “succumbed to a stealth attack from Craigslist,” but the newspaper-owned CareerBuilder and predecessors CareerFinder and CareerPath were online first. However, Tofel notes they “failed to compete effectively with a single geek working out of his apartment.”

Tofel says the business model of newspapers has been broken irretrievably for about seven years now, but…

We should care not about newspapers themselves but about the highest level of quality journalism that they have represented for a century or so. The future of that kind of journalism will depend largely on our ability to create new institutions, and adapt old ones, so that we can respond to technological change with business creativity, entrepreneurial determination, self-confidence, and common sense.

For more comments on this post, go to Facebook.com/JimRomenesko

Tofel’s e-essay is $1.99, and can be pre-ordered here.

Comments

comments

7 comments
  1. Judging from the summary, this appears to be just another piece in the well-stuffed genre of arguments against free online news.

    The excerpts are a mixture of obvious observations along with meaningless buzzwords like “technological change with business creativity, entrepreneurial determination, self-confidence, and common sense.”

    So why should I pay even a penny for what promises to be a regurgitation of what’s already been debated exhaustively?

  2. While “the notion that information wants to be free had become Hip” was true, additionally newspaper couldn’t generate enough digital subscribers to meet the hype. Instead of admitting it would take awhile, the easiest thing was to spend too much resource to build the traffic numbers and sell the hype to advertisers but it still wasn’t enough. The traffic numbers looked large but real profits were/are absent.

    Today, expectations are beaten down so far, realistic growth in digital subscribers and even advertising are possible. Profits are possible with simple solutions based on the wider array of technologies available that don’t take much if any labor or selling. The willingness of the public to pay for content will continue to grow.

  3. Interesting article and the debate that followed it is just as interesting. What strikes me as odd is that no one mentioned the Huffington Post…started on Internet and probably today the biggest newspaper on the net, and (as I understand it) now a money-making proposition. Surely a way to the future of the newspaper industry?

  4. Jim, I think you and my fellow commenters miss the point; the cover price of newspapers never paid for journalism. At best what you paid at the newsstand covered the printing and distribution costs.

    Display and classified advertising funded journalism and generated the profits for the newspaper industry. This is where the money was.

    What’s happened is print advertising is moving online but now goes through Craigslist or intermediaries like Google, which means online publishers get pennies where there were once dollars.

    It made sense to give away content for free online as long as the advertising paid the bills. This model has worked fine for commercial TV and radio.

    Sadly it appears it doesn’t work for online journalism. But no-one knew that ten years ago.

  5. max frankel said:

    Well, I think the reason lies not in stupidity but custom.
    Newspapers had long given away their content for virtually no entrance fee. They relied on advertising, especially in heyday on classified advertising.
    The web quickly stole that advertising and exposed the always critical question: would readers really pay for news? They had not in a very long time.

  6. Kurt fliegel said:

    would love to refute this complete and total nonsense point by point, but I’m not willing to pay the price of admission.

  7. The Seattle Times and The Daily Herald of Everett have written against a bill in Olympia that would let school districts charge for the actual.