Quality Reporting Doesn't Come Cheap

The decline of newspapers is a tragedy for democracy. How can it be stopped?

PETER R. KANN

Imagine yourself the proprietor of a venerable and profitable business whose success is based on the quality of your distinctive product, the brand loyalty of your customers, and the fair price they are willing to pay for the value you provide.

Then you hire some bright young managers who develop a new and improved version of your product that can be distributed faster and accessed more conveniently than the old one. The new version—essentially a repackaging since core components are the same—appeals to traditional and new customers. No mystery there, since unlike the older version, for which you still charge, the new one is given away for free.

Consequently, your total customer base grows but your revenues do not. Your profits shrink as the free version lures customers from the paid one. You begin to wonder whether there might be a little flaw in your new business model, whether perhaps you should have charged for the new and improved version, but all the experts now tell you it is too late for that.

So it was that newspaper proprietors, seduced by the allure of a new distribution medium called the Internet, gave young Web disciples license to take their preciously crafted product—news—and repackage it with all manner of bells and whistles from interactivity to instant updates to historical archives and then give it away for free to the very same people and more who still were expected to pay for the traditional product on sheets of inky newsprint. Something was wrong with the logic.

Indeed, a business analyst landing here from Mars logically might question why an unwieldy newsprint product, stale as soon as it rolls off the press and not updated till another sun rises, should not be free whereas the new Internet product, offering all the same news plus more and evolving as does the news around the clock, should not be worth a pretty price? An even wiser Martian might conclude that customers should be given a choice, or offered a combination, but that they should be expected to pay for both.

Based on a nearly 60-year habit of reading them and some 50 years working for them, newspapers still are my preferred way to access and absorb news, but that is not nearly so true of my children and will be even less so for theirs. More and more people clearly prefer to get their news online and, not surprisingly, prefer to get it for free. Good for them, but not so good for the increasingly impoverished publishing companies selling (or these days giving away) news, for the steadily diminishing cadre of reporters and editors who produce it, or for the future of news as we have come to know it.

The start of this downward spiral predated the Internet by some decades as publishers relied more and more on advertising as their primary revenue source, chased larger and larger audiences to appeal to those advertisers, and displayed less and less confidence they could attract those audiences by charging full and fair value for the publications they produced. Thus, well before the advent of the Web, publishers were discounting subscriptions, providing all sorts of peripheral premiums, and giving away more and more copies to maintain artificial circulation bases.

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Chad Crowe