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March 21, 2016

The Three Problems Dooming Newspapers Today

Robert Niles
By Robert Niles
As some of you might know, I've been writing a weekly column about theme parks for the Orange County Register. It's a nice throwback to my earlier days in journalism, when I worked in newspapers as a reporter, editorial writer, columnist and website editor. But the newspaper business isn't exactly the healthiest one going. When you find yourself longing for the career stability of your friends in show business, you know something's deeply wrong with your job. Of the three papers where I worked full-time, two have been sold, one of those two has been through bankruptcy, and the third paper folded. And now, the Register is going through its own bankruptcy, with the paper about to be sold.

I know plenty of people in the newspaper business, and over the years I have heard many of them blame the Internet for the industry's problems. But that's a ridiculous excuse. The Internet has created a vast new marketplace for content, substantially increasing the amount of time people spend with media. The newspaper industry had its chance to dominate online media, but blew it by resisting attempts to do much more than slap its print stories online.

(One manager at Los Angeles Times warned me in the early 2000s that the Tribune Company had rejected plans to create original content for the Internet after I pitched that entertainment columnists for the paper should do more blogging. That's when I started looking for another job.)

Inspired by the impending sale of yet another paper where I've worked, allow me to suggest three actual problems that are screwing the newspaper industry right now.

Pensions

This problem isn't unique to newspapers. Any business that's shrinking faces the same issue. At their heart, pensions are a deferred compensation scheme. They allow an employer to get more work that it pays for right now by agreeing to make that up to its employees later on, in the form of a pension. That's great for a growing business, as it allows companies to bulk up with lots of work that it isn't immediately paying for in full.

When employees start to retire, a growing business still comes out ahead, as the value of the "free" work it is getting from its expanding number of new employees is worth more than the pensions it has to pay to its retirees. But when a company stops growing, and starts to contract, pensions kill it. When that happens, the value of those pension payments far exceed the "free" work that the company is getting from its shrinking pool of active employees, draining the company's bottom line.

The Register's pension obligation has been the big anchor weighing it down. The problem's so bad that the two major bidders for the paper — Tribune Company (you, again!) and Digital First Media — both refused to accept the paper's pension payments in their bids to take over the company. That means American taxpayers could be left holding the bag, through the Pension Benefit Guaranty Corp.

Again, this problem isn't unique to newspapers, as should be obvious from the fact that the federal government has created an organization to handle the pensions of failed businesses. Automakers, retailers, and even school systems have struggled to balance their books under the weight of all those deferred payments coming due. (Better hope those checks clear, Baby Boomers!)

The Beat System

Despite all the changes in society and in media over the past four decades, most daily newspapers look pretty much the same as they did when I was a kid. Yeah, they're smaller, but their format remains the same — a front news section, a business section, a sports section and a lifestyle/entertainment section. In each of these sections, reporters cover an assigned "beat" with a relatively fixed set of sources providing information for their stories. From time to time, papers shuffle assignments and move reporters to cover different beats. To staff these positions, newspapers rely on journalism school graduates who are trained to report, write and edit stories to fit these industry conventions.

This is a horrible way to structure a publication in the 21st century.

The only reason that my wife (another J-school graduate) and I aren't living on the dole today is that we broke with these conventions and developed our own niche publications online. Thousands of other independent online publishers are making a living by creating and cultivating communities where readers can explore topics that newspapers' rigid beat systems either ignore or provide only superficial coverage.

Here's the irony for newspapers: People want information. They crave smart, insightful, engaging storytelling. But newspapers were engineered to serve a mass market that held together only when there were no widely accessible sources of more specific, in-depth information. Now, anyone can click directly to the sources that newspapers cover, or they can find alternate voices that tell us stuff that newspapers never deliver.

Failure to Cultivate Communities

This cuts two ways for newspapers. Successful independent online publishers have developed fiercely loyal and active communities of readers, who participate in discussions, contribute original content and promote the publication to others though social media. But these communities didn't evolve by chance. They developed only when leaders did the hard work of cultivating them, recruiting an initial wave of participants, providing examples to emulate, steering the conversation in rewarding directions, and shutting down trolls who would damage the community.

(Trolls who make us laugh and keep everyone honest — hey, they're okay.)

Almost all newspapers blew this challenge by refusing to get their reporters actively involved in leading and managing a community of their readers online. In fact, many papers explicitly forbade their employees from participating in or even monitoring comment sections on their articles, out of fear that staff participation would leave the paper liable for the content of those comment sections. As a result, many newspaper comment sections today are the cesspools of the Internet. It's damned-near impossible to make YouTube comments look smart and insightful, but newspaper comment sections often manage that seemingly impossible task.

But it's not just virtual communities that newspapers must cultivate. Great publications work to build and sustain the offline community that they cover, as well. Unfortunately, industry conventions fail newspapers here. Too many reporters and editors conflate the industry's goal of objectivity in reporting the news with a need to be impartial in presenting it.

No one has time for wishy-washy news. If people are going to invest their effort in reading your work, you'd better reward them with strong, supported conclusions. That means not being afraid to take a stand to protect your community when the reporting leads you there. But too many editors are afraid of the blowback — from readers, from advertisers, and most chillingly, from their papers' owners.

When you own your website, at least ticking off the owner isn't an issue anymore!

Readers want to hear from people inside their community, too, and not from poorly-informed outsiders. Sure, it's cheap to import a staff of fresh J-school graduates from outside the community, but newspapers pay for that what those cub reporters blow their credibility by not knowing the community. Demanding that reporters not have any professional contact or experience within the industries they cover also leaves newspapers ill-prepared to compete with independent publications that offer insight from people who have the training and experience to offer far more detailed and insightful coverage.

The TL;DR? Newspapers blew it by sticking with their top-down management in the Internet era, instead of adopting a grassroots-up, community-driven approach to developing and managing their publications. Managers didn't want to lose control of their publishing empires. But the public took it away from them, anyway.

When a business — or an industry — fails, don't blame the customers. Blame the owners, the board and the people who failed to make the right calls the industry needed to survive. Newspapers could have won the Internet. But they didn't. And that's not the Internet's fault.

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