Helpless Newspaper Industry

February 27, 2008 • Media Economics • by

Werbewoche Nr. 4, 2008

For the third time within three years, the Los Angeles Times, one of the most highly respected newspapers of our time, has lost its editor-in-chief. For the specialized media in Europe, the incident may deserve only a slight notice, as geographically, the story has taken place far, far away. The departure at the Los Angeles Times illustrates the result of an ongoing cost-cutting battle, with  management bent on slashing jobs, and a lack of appropriate financing for the newsroom.

In California and beyond, the armchairs of editors have turned into rather uncomfortable hot seats these days as well, catapulting even successful journalists into uncertain orbit. While this may be a warning signal, it also signifies utter helplessness.This third high-level departure from the Los Angeles Times points to wasted energy and tense emotions stemming from the current cutback philosophy, a philosophy which has editors stumbling from one dramatic round of cost-slashing to the next. Many publications are now at the mercy of investors who are suspected, with some justification, of being primarily interested in turning a quick profit rather than tying up large sums in an industry that seems doomed to die anyway.

No one working in today’s newspapers seems to know how – or even if – making money in paper-based journalism will still be possible in 10 years. Even among cool-headed decision makers, the situation is capable of provoking panicked reactions, perhaps best described as  acts of self-cannibalism:

  • The first industry misstep was the publishing of all news content on the Internet for free, despite the fact that the traditional print product was supposed to continue making a juicy profit. Imagine Coca Cola giving away its dark brown brew in plastic containers, while raising the price for the very same product when sold in glass bottles. This is hardly different from the behavior of publishers who generously upload all their content on the Web, while still hoping to cash in on the same product marketed through traditional channels of distribution. For quite some time, the newspaper industry strongly underestimated the brand value of its well-established print titles, and in doing so damaged that value. Fear-stricken by the looming presence of entities like Microsoft and Google, publishers began acting as crowd-pleasers handing out giveaways.
  • The second industry misstep was, and is, to flood the print market with free sheets. While it is true that, in the beginning, this proved to be an effective method for making millions (see, for example, the success of 20 Minuten in Switzerland), its emulators (Cashdaily, heute, .ch and News) are already struggling quite a bit when trying to do the same. The publishing houses that are putting out those freebies, however, are damaging their other in-house titles. On one hand, advertising volume is not unlimited and on the other, it is not only the readers of the Swiss tabloid Blick who are eagerly picking up those free sheets. Probably all of us do so, occasionally, thus saving the few francs which a quality newspaper would have cost, withholding that money from newsrooms which are in dire need of it.
  • The third misstep arose as the immediate consequence of acts 1 and 2; all editorial staffs suffering from acute under-financing are easy prey to spin doctors who come to the rescue, offering public relations articles free of charge. However, such PR-sponsored content undermines journalistic credibility, while at the same time reducing the advertising income of publishing houses. The realization that “collateral products” can be quite a profitable affair came to publishers with the same speed it took them to realize the brand value of their print titles ¬– although better late than never.
  • The fourth misstep is the shameless praise and promotion of products in the editorial pages. In the eyes of more discerning readers, this behavior is likely to reduce journalistic credibility even more.
  • The final industry misstep was, and still is, the merciless reduction of editorial staff and unscrupulous plundering of newsroom budgets. If you start to remove healthy flesh instead of superfluous fat, newsrooms start to bleed out. Journalistic quality and credibility are, once again, damaged – hence very much in line with industry misstep No. 3.

The tragic comedy of the Los Angeles Times lies in the fact that blame for the paper’s early downslide was laid at the door of  CEO Mark Willes, who, as a newcomer to the newspaper industry, toyed with innovative strategies to make the paper more profitable. Coming from the food industry, Willes introduced clever marketing concepts that may have saved the super tanker from sinking without damaging its journalistic integrity. Rather than being greeted with open arms, Willes was attacked and scandalized both by his own journalists and the ones working for competitors, ultimately leading to his resignation. Today, Willes lives as a pensioner in Hawaii. Maybe anxiously anticipating the moment when people in Los Angeles and perhaps even in Europe will reevaluate his suggestions rather than weed through one editor-in-chief after another.

Translation: Oliver Heinemann

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