Future Fishwrap

I still read a daily newspaper, but we all know that newspapers are in decline. Their circulations are dropping slowly but steadily. I haven’t seen any data on the average age of newspaper readers, but I’m sure it must be increasing. Over time newspapers will have fewer and fewer readers.

As technology advances, they will no doubt find different distribution mechanisms. Most newspapers are available on the web, of course, but reading articles on the web is not (yet) the same as reading them in the daily paper. And, of course, nobody has figured out how to get people to pay when reading on the web. I think the Wall Street Journal and the Financial Times are the last major newspapers to charge for web access; they do it by providing information of particular interest to people who need timely information. Most of us don’t need the information in the newspaper, at least not enough to overcome the mental hurdle of actually paying for it.

Newspapers have an important role in our social system: they provide in-depth timely information about what is happening. Television is an excellent source of breaking news, but terrible at in-depth information. Radio is no better when it comes to news. The Internet is significantly less reliable than newspapers, in that there is no editorial oversight and no punishment for being wrong. Magazines have a relatively slow publication schedule and are not timely (and the weekly news magazines are likely to be the next ones to go after newspapers, anyhow).

Is there any way to keep something like newspapers in existence? They will clearly have to switch to a different distribution mechanism; that will use fewer resources, and save them lots of money. That different mechanism has not yet been invented, but I’m confident that it will be. Some sort of smart paper would seem to be the best bet at present.

That still leaves them with the problem of supporting the large reporting staff which is required to do the job. People aren’t willing to pay to read newspapers on the web; would they be willing to pay to read them on smart paper? I don’t know; if smart paper exists, a lot of people will provide free information on it. Can newspapers still charge a fee in that case?

Perhaps a somewhat more radical approach could be found. I see two keys to a useful newspaper: a deep reporting staff with expertise in different subject areas and geographies, and a responsible editorial staff to maintain an independent perspective and to ensure that articles are high quality, relevant, and correct. There are plenty of people with the necessary skills and interest. The question is how to pay them for their work.

As I’ve written before, micropayments won’t work. Newspapers have a history of thriving on the patronage system, and we can’t rule that out in the future, but we also can’t count on it. Subscription fees I discussed above. Advertising is an obvious source of revenue; newspapers use it effectively today, but that too is decreasing. Newspapers once got much of their advertising money from classified ads; that entire market has been eliminated by the Internet. Is advertising enough to keep several newspapers thriving? (We want more than one, to avoid capture by the people and organizations they cover). I don’t know; I guess time will tell.

This is an instance of a general class of problems that are difficult in a capitalist system: if you have a good that has a small value to many people, but requires a large ongoing investment to create, it is difficult to aggregate payments from the many people to the single creator. Advertising works around the issue by finding a much smaller set of people who want to talk directly to all the users of the good. There ought to be another mechanism as well, but I don’t see it.