I’ve worked in the daily newspaper industry most of my life. I am the fifth generation of my family in that business; we published a daily paper for 140 years. I teach postgraduate New Media Management at one of the major media schools in the U.S. and specialize in how the media industries adjust to new technologies (notably the Internet).
I’ve lived through four of the six phases of daily newspapers’ attempted adaption to online, and watching the fifth unfold, and expect the six and final phase to become dominant by the year 2020.
These phases are:
- ‘The Graphics Guy’s Experiment’ [mid-1980s to 1992]
Someone in the newspaper’s information graphics department goes online, joins online discussion groups, and wonders if online technologies might be fertile future ground for newspapers. Why the graphics guy? Because online distribution of syndicated information graphics by the Knight-Ridder syndicate, Tribune syndicate, The New York Times syndicate, the Associated Press, and United Press International during those years was one of the very first usages of online by newspapers. The Internet wasn’t yet opened to the public, so they used proprietary online bulletin boards or consumer online services such as CompuServe, Prodigy, and America Online. It wasn’t the graphics guy at all daily newspapers, but more likely than not was.
- The Sideline Experiment [circa 1990-1994]
Some journalists or photojournalists discover online and begin experimenting with it. The first experiences by most were with professional groups hosted by consumer online services, such as CompuServe’s Journalism Forum. Some of the journalists experiment with posting their newspapers’ stories online. When these experiment result in usage by online consumers, the newspaper begin putting more of their stories online. Yet because the Internet hadn’t been opened to the public during the first part of this period, most of those newspaper contract exclusively with an consumer online services (CompuServe, Prodigy, America Online, etc.) to host their newspaper’s contents online.
- ‘Grow The Audience’ [1995-2004]
A few years after the Internet becomes open to the public, newspapers’ online experimentation switches from being hosted by the consumer online services to hosted by the newspapers themselves on the Internet. Newspapers’ experiments online switch from a sideline experiment to mainstream efforts blessed by their corporations. Publishers mistakenly see online as a means of distributing their newspaper editions to consumers by a means that doesn’t involve the costs of purchasing, printing, and distributing paper. They order, ‘grow the (online) audience’. The mistakes are (a) they don’t realize that consumers consumer news differently online than with print – much less frequently and less thoroughly; and (b) they don’t realize that online advertising isn’t a scarce but infinitely surplus commodity to sell – online ad rates don’t rise with increased online consumption. In other words, the consumption and business models online are radically different than in print. The newspapers’ online revenues won’t result in anywhere near the revenues of print.
- Get Eaten Alive [2004-2013]
As the majority of online consumers in the developed countries obtain broadband access (plus wireless), their media consumption almost fully shifts from print to online. Newspapers lose approximately half of their print circulation and print advertising revenues, but the newspapers’ online revenues don’t compensate for those losses. Moreover, the newspapers fail to themselves adopt the classified advertising and advertiser self-service online advertising mechanisms used by companies such as Google and CraigsList, companies that then devastate the newspapers share of local online advertising.
- Panic & Paywalls [2014-2020?]
Waking up to their fate, daily newspapers attempt to increase a portion of their online revenues by walling off most of their online contents except to people willing to pay $10 to $35 per month for access. Yet even after four years of multi-million marketing campaign for paid online subscriptions, The New York Times is unable to convert into online paying subscribers more than 2 to 3-percent of its website’s registered users. Although that conversion ratio will help slow that newspaper’s financial decline, this paywall business model from the premiere daily newspaper in the English language doesn’t scale to most of the other 1,200+ daily newspapers in the U.S. (where the average daily newspaper’s website has less than 25,000 monthly users. Two to four percent of those users are only 500 to 1,000 users. If that average newspaper charges $15 to $35 per month to them, it generates only between $92,000 and $420,000 annually online. Yet it’s nonetheless unlike that the average U.S. daily newspaper will have the conversation percentage of the nation’s top national newspapers.) Moreover, these paywall erected prevent 95 to 98 percent of the newspaper website’s previous usership from accessing the paper’s online contents.
- Graves [2020 and beyond]
The pyrrhic paywall policies are the nails in the coffin of most daily newspapers in the U.S.