Newspapers: Where’s the business model?
Steven Rattner, a Wall Street money manager — and former reporter for the New York Times — wrote a piece for the Wall Street Journal on Thursday, looking at alternative business models for the newspaper industry, an industry he says is failing to not only find new customers but to keep its existing customers. “The news about newspapers could hardly be more dismal,” he says, with “falling circulation, repeated rounds of layoffs, disappearing ads and a chain of bad earning reports. It’s an unsavory stew of ills, one that shows little prospect of becoming more appetizing.”
Rattner doesn’t seem to be a fan of newspapers going private — that just “substitutes one rapacious posse of shareholders for another equally fierce brigade of capitalists,” he says. So what are the other options? “Not-for-profit status might be one possibility,” he says, such as the St. Petersburg Times, which is owned by the Poynter Foundation (which also runs the Poynter Institute). He also suggests that the U.S. could somehow “create a pool of money (possibly from a license fee similar to how the BBC is funded)” and then hand that out to news organizations that apply, in the same way public televsion does.
Jack Shafer of Slate says he thinks that for a capitalist, Rattner’s piece is short on business specifics, but from the sounds of it Shafer wishes that he had been harder on the industry. The Slate columnist says that newspapers have seen their business shrinking for at least 30 years and done nothing about it.
“Rattner’s piece neglects to mention that for better than 50 years newspaper companies have feasted on their advertisers, charging steep ad rates everywhere and confiscatory rates wherever they owned the only daily.
Now that the Web is underselling them on the ad front and other media are stealing eyeballs, should we weep for them?”
Shafer goes on to say that we should “call off pledge weeks for newspapers…. and let’s amend the Constitution to ban tax subsidies for newspapers. If dailies can’t make it on their own, they deserve death.” Howard Owens has some thoughts on newspapers as a business here, and Stowe Boyd says he thinks that Rattner is “cracked.”
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(On Feb 16th, 2007 at 1:57 am)
While the U.S. doesn’t have the BBC, it does have serious public media companies like NPR, American Public Media, and PRI that all produce great editorial content for a 24/7/365 news cycle. If public funding works for broadcast media, why can’t it work for print media?
(On Feb 16th, 2007 at 10:01 am)
That’s a good point, Steve. I don’t see why something like that couldn’t work for print media as well — and as Rattner notes towards the end of the piece he wrote in the WSJ, the subway in New York started as a for-profit venture but eventually became a public entity because it was seen as having enough public benefit, even though it could no longer function as a profitable business. Sounds a lot like newspapers to me
(On Feb 16th, 2007 at 12:36 pm)
The MTA in New York is an interesting example. Especially now that it is seeking for advertisers — or underwriters — to buy the naming rights to subway stations, see Marketplace’s report This subway station brought to you by . . ..
Apparently, whether an organization is private or public, its needs support from private companies. The difference is what role they serve — advertiser or underwriter.