The transition to digital technology has been marked by intransigence by industry giants across virtually every field. As we've discussed before, Hollywood and record labels are more interested in trying to find ways to lobby and litigate their way back in time. Until recently, major comic book companies like Marvel (a subsidiary of Walt Disney Co. (NYSE: DIS) and DC Comics (a subsidiary of Time Warner Inc. (NYSE: TWX)) tried to rope customers into sticking with physical issues of popular titles by releasing the same issues in a digital platform at random, later dates.
The newspaper industry, though maybe not so overtly resistant to digital media, has adjusted just as slowly -- and it's paying for that. "All the News That's Fit to Print" is well on its way out. A study from the Council of Economic Advisers and LinkedIn Corp. (NYSE: LNKD) show that the newspaper industry is declining faster than any other industry in the United States, shrinking 28.4% from 2007 to 2011 alone.
Ad revenue has been steadily decreasing as the Internet and TV supplant the newspaper as quicker, more reliable forms of news distribution. Staff cutbacks are an industry norm as newspapers are shopped around for fractions of what they were worth just a few years ago. All this is taking a toll on the stock prices of publicly traded news companies.
(Source: Pew's State of the Media, 2012)
The most recent attempt to stanch the industrywide bleeding is the general implementation of paywalls, which place a limit on the number of articles visitors can read online before they're forced to subscribe. The much beleaguered Los Angeles Times, which is owned by the privately held Tribune Company, implemented a paywall on March 5. More papers are following suit. The New York Times and the Boston Globe (both owned by The New York Times Co. (NYSE: NYT)), the Milwaukee Journal Sentinel (NYSE: JRN), the Star Tribune in Minneapolis (which emerged from bankruptcy in 2009 as a privately held company), the Dallas Morning News (owned by A.H. Belo Corp. (NYSE: AHC)), and others already have them in place.
According to News & Tech, about 150 of the nation’s 1,350 dailies have implemented some form of paid digital content. Another 100 papers are expected to adopt similar models this year.
The question, of course, is whether people will still pay for their news.
There is some reason to believe they will. Statistics show the NYT boasts a digital subscription rate of about 380,000, or half of its print readership. The Wall Street Journal, which is owned by News Corp. (NYSE: NWS), has been restricting access to online content far longer than its peers, and it has 537,000 digital subscribers. The Financial Times, owned by Pearson plc (LSE: PSON NYSE: PSO), has about 250,000.
However, these three cases may be the exception, rather than the rule. The vast majority of readers appear to be choosing from the numerous free news sites and blogs. Further, the NYT, WSJ, and Financial Times are preeminent newspapers. The latter two implemented paywalls long before this affliction began in earnest, and they have likely accrued a "fan base" of sorts among the newspaper-reading cohort that contribute to the subscription numbers.
Maybe not surprisingly, the future of newspapers appears to be in tablets and smartphones. The Pew Research Center's Project for Excellence in Journalism said in its State of the News Media 2012 report that the growth of portable devices is affecting the way people consume news.
People who read the news on laptops and desktops commonly use Google topic searches, the report said, but tablet and smartphone readers are more likely to use applications made by specific news organizations. This harkens back to the "fan base" that has made pay-to-read news sites work for some papers.
As tablets and smartphones continue to grow in popularity, they could become the main medium of "print" distribution. In the future, will we be reading "All the News That's Fit to Pixelate?"
I've said it before and I'll say it again: there is a place in this country for good, traditional journalism. Let's hope the new subscription model will help to revive some of these dying papers, albeit in a new and more easily accessed form.
Noreen, I could not agree more. There still is a place and a need for traditional journalism, I hope what it is experiencing now is just some growing pains as it transitions to the digital world.....
Try reading a story in traditional print - then find the tablet version.
The electronic version feels ephemeral and somewhat weak - less credible. This may be a generational thing among those of us raised on newspapers. I use both and enjoy the easy search engines built into electronic copy. But thre is still nothing quite like a newspaper spread on the table next to your morning coffee.
It would be interesting to see what others think, and how they feel about it. To put it al in perspective I am in my early 30s so I am not super young, but I have also never been one to read the paper to get my news.
I agree. Sometime I do the paper version ( usually while traveling) but I prefer the tablet version. I have also found little reason to buy a subscription with all the free sources out there. When I talk to business associates, I do not seem to be alone.
I agree. Sometime I do the paper version ( usually while traveling) but I prefer the tablet version. I have also found little reason to buy a subscription with all the free sources out there. When I talk to business associates, I do not seem to be alone.
For everyday news, the Internet is the perfect medium. But for longer pieces --- investigative journlism, magazine features, books --- print is still king. And high-end traditional media companies are the only ones with the resources and the talent to pull off quality long-form pieces. Internet-only media companies are good for creating rumor mills and smut blogs, on the other hand.
I agree with you. There is nothing like a news paper spread in front of you while having your breakfast. I had Internet for a long time now and I still formed this little morning habit of mine.
Yes Noreen I believe there is always a place for trusted and well reported news. The success now depends on the form of distribution. A feeling of nostalgia and habit may make some readers still want to have a tangible physical form of a news paper in their hands but people's needs are changing so it's high time the news paper industry took note of this and catered to their customers changing needs.
News is so readily available cheaply today you really have to like a paper to pay the print price, I picked up a NYT the other day in shock of the price. Sorry I am not attached to the paper and could get my news from many online venues for free even with the paywalls. I am afraid the paper will be a dinosaur in a matter of years. At least we will save some trees.
Well, the paper is probably going to go extinct regardless of what the price is. I just hope that the traditional newspaper firms can thrive on new media platforms, because I'm not fully sold on the idea that investigative journalism will survive otherwise. Or journalistic integrity, for that matter.
I don't subscribe to three newspapers for the news alone. I really like the op/ed sections, in-depth pieces, style, recipes, supplements, crosswords, etc. I currently read print but could imagine switching to a tablet someday. What I couldn't imagine would be doing without my morning reading fix!
I loved that ink. I used to work an overnight shift, and at 3 am would go down to the first floor to get the first edition hot off the press. Dirty fingers, but great fun.
@Street Smart, All those sections, and the possibility of stumbling on something really interesting as you make your way through them, is what I love about "real" newspapers. I can search a topic online, or read the top stories on the Washington Post. But at least on my phone or computer, I never trip over an unrelated but great story like I might if I had the paper in my hand. I don't have a tablet so maybe the experience is different for those users.
@Noreen, I COMPLETELY agree with you about the serendipity factor of reading print. A tablet might begin to replicate it, but I've read the NY Times and WSJ on iPads courtesy of my cool friends and it really isn't the same.
When I moved to Manhattan for my first job, I used to get on the Wall Street bus from the upper East Side each morning, sit down and read the Journal, which involved mastering THE FOLD, whereby one folded one's paper in quarters lengthwise and turned the pages in little increments so as not to encroach on one's seatmate.
It was SO New York and no gadget could EVER take the place of how mistress of the universe COOL I felt doing it! Sad but true...
Those little sections with totally unrelated things which would never come up if you'd done an online search are the ones I liked. And I used to cut out and keep the best articles on various interesting subjects. Now when I read online when I stumble upon something I want I try to save the link but some how I don't seem to ever find the time to go back and look again. I never seem to remember to look it up with the saved links when the need arises whereas I always look through and rememb er my physical paper cutting collection.
You could also block your face with it in case you didn't feel like engaging in random conversation with your neighbor... You can't really do that for too long with a tablet.
There is a sea change happening in how we receive and use information. Yes, we're moving from print to internet. But the way information is pre-selected for our consumption may be the bigger change.
Google, Facebook and others have made tremendous investments in software to choose what pages and links are presented to us. I think this contributes more than we realize to the polarization and fragmentation of our public conversation.
@PredictableChaos, that was a fascinating TED talk on filter bubbles. Thanks so much for posting it! Coincidentally, I had dinner last night with a friend of mine who runs an SEO consultancy and we were talking about this VERY thing.
I know that I've had it happen on Facebook. The scarier thing is when you don't even KNOW that it's happening on Google or other search engines.
It's official: I'm DEFINITELY keeping my print newspaper subscriptions!
It's like a two way selection. We consumers can choose which newspaper or website we read, and publisher can choose what contents they want to show us. Hehehe...
So all those information is biased, biased by newspaper editor and by these bubble filters. Really be careful what we read now a day.
@mlnvestor, hate to break this to you, but editors have always selected what to show their readers. Newspapers and magazines have finite space. Sometimes editors have to shovel garbage to fill the space, sometimes they have to trim down to the muscle to make the space. And sometimes editors have political and other alterior motives driving how they fill their space.
I also spent about 10 years in newspapers before I saw the light -- fortunately well in advance of the train coming through the tunnel.
To Noreen's point, newspaper people are personalities. And editors are personalities. And publishers are personalities. So inevitably their filtering confirms to the biases in the newsroom and are shaped by the community and the person in the corner office. There is no such thing as a purely objective media operation. Even Google's news results are programmed by sombody who has injected bias into the algorithm.
Let me tell you how biased newspapers can be. You can either laugh or cry about this.
In case you forgot or are too young to remember, there was an accident at the Three Mile Island Unit 2 (TMI‑2) nuclear power plant near Harrisburg, Pa., on March 28, 1979. It was the most serious in U.S. commercial nuclear power plant operating history.
The accident occurred on a Tuesday or Wednesday, as I recall, Someone asked the (late) executive editor at the (late) Pittsburgh Press -- four hours west of the plant -- if a team should be dispatched to cover this major news event.
The response: "Nah. Let's wait. If it's still important on Friday, we'll write something for Sunday."
LOL! yes you got me there. I have vivid memories of the news, I guess maybe I wasn't thinking of exactly when it was and how young I was. I remember writing something in school about it. I guess you (and I) might have been a little young for the union card ... my bad.
At least back then, most major cities had at least two major dailies. Now we're lucky if there is one. If one paper made a stupid decision, there was hope the other would have some sense. That was the value of competiton.
I think the internet provides this competition without the need to go search out the physical copies of local dailies. Anything you can find in paper form is on the internet and more accessible than the physical copy.
Now, if one daily misses a scoop, you have 10 others waiting to pounce...pun completely intended :)
What a different world we live in nowadays where reporters are rushing out to do stories on ludicrous topics like cats that have a paw that looks like the virgin mary.
Maybe 'filter bubbles' are why popular YouTube videos are so bad.
After we've already watched 6 short videos, each worse than the last; our filter bubble presents choices for us that have millions of views. But, for some unknown reason, they are they all about car accidents, embarassing noises or the Kardashians.
Yes, I always wonder how they decide that these particular videos are just right for me. Actually makes me a little nervous. What demographic am I tapping?
The information is fascinating, but you have to keep in mind the limitations of the data. The CEA worked with LinkedIn to get a different twist on employment statistics. As the Economist noted earlier this month, "OFFICIAL statistics can tell you how many workers were jobless last month, how many had college degrees and how many worked in construction. But they cannot tell you how many know Hadoop, a software for managing data that is much in demand these days."
The CEA acknowledges that LinkedIn's 50 million US members are not a nationally representative sample of the US workforce. But because they tend to work in sectors of the economy that require higher levels of education, the information embodied in the changing distribution of the industries and occupations in which members are employed has the potential to inform the decisions of individuals considering specific educational and career paths.
Is pharma shrinking? Not necessarily. But growth is dependent on regulatory approval. Google pharma jobs in any given month and the news might be good. Or bad.
Take January 2011:
Arena Pharmaceuticals (ARNA), stung by its inability to win regulatory approval for its experimental obesity drug lorcaserin, slashed its workforce by 25 percent or 66 employees.
Elan (ELN) laid off 130 people or about 10 percent of its workforce.
Abbott Laboratories (ABT) cut 1,900 jobs, or 6 percent, of its U.S. workforce following setbacks in its development pipeline that led to a restructuring.
Noreen got the jump on me, but here's some articles I found that at least imply that pharma is facing some hard times, a little old though they may be;
Additionally, a recent study by PWC Health Industries had this to say on the subject:
Branded Pharmaceutical companies are trying on new business models as varied as the costumes in a Broadway musical. Lower cost generic manufacturers are logging market share gains from branded manufacturers. The scenario is becoming more frenzied in anticipation of a jolting $118 billion revenue loss between 2012 and 2016 due to expiring patients. More than 80% of pharma and life science CEOs surveyed by PwC said they have altered course during the past two years, and 36% said they have modified their strategies in fundamental ways. The years 2009 and 2010 were banner years for pharma mergers as companies looked to rebuild product pipelines....These mergers created larger companies, but they have consequently been slimming down. The numbers paints a dismal picture. Since the beggining of 2011, more than 20,000 US job cuts were announced. The US Department of Labor estimates that pharma sales and marketing staffs will shrink by 5% between 2008 and 2018.
"The most recent attempt to stanch the industrywide bleeding is the general implementation of paywalls, which place a limit on the number of articles visitors can read online before they're forced to subscribe."
Paywalls (for the most part) are such a bad business decision. As mentioned in the article, users have so many other options to get their news/info/whatever that you're basically begging them to leave your site and go elsewhere. There's no such thing as consumer loyalty anymore, not with the internet providing so many options.
The blogs and comments posted on Investor Uprising do not reflect the views of Investor Uprising, PRNewswire, or its sponsors. Investor Uprising, PRNewswire, and its sponsors do not assume responsibility for any comments, claims, or opinions made by authors and bloggers. They are no substitute for your own research and should not be relied upon for trading or any other purpose.
To save this item to your list of favorite Investor Uprising content so you can find it later in your Profile page, click the "Save It" button next to the item.
If you found this interesting or useful, please use the links to the services below to share it with other readers. You will need a free account with each service to share an item via that service.
Tweet This