Is the newspaper industry at death's door?

DURING a recent visit to Dhaka, the chairman of The Financial Times Group, Sir David Bell, categorically accused search engine giants Google and Yahoo of "stealing" contents of newspapers, which affects the industry badly. A similar allegation came from media mogul Rupert Murdoch in early April. "Should we be allowing Google to steal all our copyrights?" asked the News Corp. chief.
Sam Zell, owner of the Tribune Company that publishes the Chicago Tribune, the Los Angeles Times and the Baltimore Sun, said: "If all the newspapers in America did not allow Google to steal their contents for nothing, what would Google do, and how profitable would Google be?"
It seems that Google is in trouble. Major giants in the newspaper business have pointed their fingers at the 10-year old company founded by two students in their university dorm. Google is now so powerful that media tycoons believe that it has been forcing the newspaper industry to death's door.
Google sees it differently. The search engine giant's response goes something like this: It's not Google, but the internet which has posed the threat to the traditional model of newspaper business. Google is not harming the industry, but helping with increased traffic to newspapers' websites. Google News shows only the headlines, a line or two of text and links to the story's Web site, which is fair in copyright laws.
No doubt Google has some grounds for the argument, but the anger of newspaper owners is also understandable because the newspaper industry, particularly in the US, is going through an unexpectedly sharp contraction. It is losing readers and advertisements significantly.
The average daily circulation of US newspapers declined 7% in the six-month period, ending March 31, according to the latest data from the Audit Bureau of Circulations. The data indicate that a shift in consumer behaviour has led more people to get their news and information online.
Newspapers have also lost the lion's share of classified advertisement to the internet. To make things worse, a depressed economy has compelled more readers to cancel their newspaper subscriptions, and business companies to cut their advertisement budget as part of overall cost-cutting measurements. As a result, closures of newspapers, bankruptcy, job cuts and salary cuts are widespread.
Citing losses of $18.9 million per year, the Christian Science Monitor stopped printing daily and, instead, started printing weekly editions from April. The Rocky Mountain News in Denver published its last print edition on April 3, after 149 years of publication. It was losing $1.5 million a month. The 144-year old San Francisco Chronicle is under threat of closure. Its owner, Hearst Corporation, threatened to close the newspaper unless staff agreed to massive cutbacks. The paper's loss was more than $50 million in 2008.
The Tribune Company filed for bankruptcy in December 2008 with $13 billion debt. Another big paper -- The New York Times -- is struggling with a debt of some $400 million. And the list goes on. A BBC report rightly questioned: "If the economic crisis goes on much longer will there be any newspapers left in the US to write about it?"
It seems that newspapers are in severe difficulty and moving gradually towards death. Many have already started to calculate when the last newspaper will be published in the western world. It is hard to believe, but the existing scenario leads to this end.
Who is responsible for the anticipated death of print journalism? Is it Google and Yahoo who provide free contents to users? Or, has the print media failed to adapt to changing journalism in the internet era?
Yes, Google aggregates news contents and people are increasingly turning to the Internet. But, blaming Google for the demise of the newspaper industry is not right in many senses. Google doesn't generate any content. It works just like a newsstand, where titles are displayed and readers decide what to pick. Once readers choose their titles, Google directs them to the story's original website.
It is not Google or any other news aggregator, but the failure of newspaper managers to understand the new media. The existing business model of newspapers has proved its ineffectiveness in making profit in the digital age, and at the same time their web versions failed to generate revenue. It is not an easy task to make money online by selling information when users have already become habituated to free contents.
Developing nations have not been affected so far by this changing trend of journalism -- thanks to low penetration of the internet. But, the blow is coming. As David Bell said: "Newspapers have to be very creative in thinking about the future challenges and opportunities."
Shameem Mahmud is a Lecturer at Mass Communication and Journalism, University of Dhaka, and post-graduate student at the University of Amsterdam Email: [email protected].