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Column: News never made money, and is unlikely to

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By Jack Shafer

(Reuters) - Sometime in the mid-1990s, the Web began to peel from the daily American newspaper bundle its most commercial elements, essentially the editorial sections against which advertisements could be reliably sold.

Coverage of sports, business and market news, entertainment and culture, gossip, shopping, and travel still ran in daily newspapers, but the audience steadily shifted to Web sources for this sort of news.

Broadcasters had dented newspaper hegemony decades ago, absconding with breaking news and weather coverage, and inventing new audience pleasers, such as traffic reports and talk.

But it was the Web that completed the disintegration of the newspaper bundle that dominated the news media market for more than a century.

In addition to pinching the most commercial coverage from newspapers, the Web has also made off with the lucrative classified advertising market, simultaneously reducing its status as the premier venue for content and advertising.

This isn't to say newspapers deserted the commercial news categories.

Newspapers have maintained their presence in the sports-weather-business-entertainment-culture departments to attract readers who attract advertisers. Even so, circulation has eroded and ad revenues have fallen to below 1950 levels in real dollars.

The units of the newspaper bundle not yet ransacked by the Web, such as international, national, state, local, and political coverage, have (to paraphrase Frank Zappa) little-to-no commercial potential.

Traditionally, newspapers have struggled selling space to advertisers by invoking these news varieties unless the news is absolutely spectacular or sensationalized. As the bundle fragments, it becomes more difficult for publishers to support non-commercial news.

Outlets such as Politico, a child of the Web, and the Bureau of National Affairs, a pre-Web entity now owned by Bloomberg, which were designed to commercialize news about politics, the federal government, regulatory affairs, political campaign, law, and lobbying, have succeeded in targeting an elite Washington, D.C., audience with this kind of news.

But those successes don't subtract from the fact that Washington news is a loss leader for most mainstream newspapers.

The same is largely true of international and national news. No mass audience is willing to directly pay for such news outside of the one already served by the New York Times with its combined daily print and digital circulation of 1,865,318.

Even at the Times, subscribers now contribute more revenues than advertisers, indicating that they value its mission more than Madison Avenue does.

This discussion would be incomplete without crediting the Wall Street Journal, the Associated Press, and the home team at Reuters for chasing news that can't be directly monetized.

A semblance of the traditional news bundle survives at these places for legacy reasons and because the Web hasn't usurped their positions in the journalistic order.

The day may come, however, that falling revenues force them to redefine their editorial missions, too. That day may close in on USA Today, a frequent purveyor of noncommercial news, sooner than later.

Were harder forms of news ever commercial? Gerald J. Baldasty's book, "The Commercialization of News in the Nineteenth Century", makes a case clear as spring water that hard news has almost never been a mass commercial enterprise.

The American newspapers of the 1820s and early 1830s were creatures of political parties, edited by zealots. Essentially propaganda sheets, these newspapers were "devoted to winning elections," as Baldasty wrote well before (1992) the Web invasion. Without newspapers, top political organizer Martin Van Buren once said, "we might as well hang our harps on willows."

Political parties supported the papers financially, and when editors strayed from the party line into independence, the parties would dump their newspapers.

For instance, Andrew Jackson's supporters helped start the Washington Globe after the editor of the U.S. Telegraph, a Jackson loyalist, was thought to have betrayed their cause.

Political office-holders steered printing contracts and payments for official notices their way. In those years, members of Congress used their franking privilege to send newspapers at no cost through the postal system and doled out patronage jobs, typically postmaster positions, to their favorite newspaper editors. "Many subscribers simply did not pay for their newspapers," Baldasty wrote. "In 1832, one North Carolina editor estimated that only 10 percent of this 600 subscribers had paid for the paper."

Changes in technology such as faster, cheaper presses and the telegraph, the Internet of its day, throttled the monopoly power Washington newspapers held over federal news.

By the late 1840s, the hinterlands no longer had to wait days or weeks for federal, national, and international news to be freighted in from outside. Timely news now came over the wire and could be printed contemporaneously with events. All this helped newspapers declare independence from the parties, and as they did many enlisted a new patron, the advertiser, who "preferred news free from unpleasantness," in Baldasty's nice construction.

These editors deliberately softened and commercialized the news, frequently censoring it on behalf of advertisers. "Half the content of antebellum metropolitan newspapers dealt with politics, whereas postbellum newspapers devoted proportionately much less attention to politics and much more attention to crime and courts, accidents, society and women, and leisure activities." Women were thought more susceptible to the appeals of advertising.

Puff pieces about advertisers and "reading notices," the sponsored content of its day, proliferated. Throughout the 20th century, newspapers got the upper-hand in the struggle, and at places like the Chandler's Los Angeles Times, the Graham's Washington Post, the Ochs-Sulzberger's New York Times, laudable chains like Knight-Ridder, and elsewhere, publishers showcased and promoted hard news in their fat bundles.

Most of today's publishers and editors aren't as solicitous of advertisers as late 19th century ones, but I doubt that backsliding would help newspaper bottom lines.

I also doubt that dramatic improvements in their commercial coverage would do the trick, either. Readers and advertisers have already flown their one-way migration route. The only place this isn't true is at some small town newspapers, the sort Warren Buffett likes to buy, where the bundle prevails.

Obviously, serious journalism still gets done at many conventional outlets, but it's telling that the most enthusiastic creators of non-commercial news hail from not-for-profit precincts, such as ProPublica, Texas Tribune, the Center for Investigative Reporting, the Center for Public Integrity, the Fiscal Times, the Investigative Reporting Workshop, Frontline, the Wisconsin Center for Investigative Reporting, the Schuster Center for Investigative Reporting, Stateline.org, Voice of San Diego, MinnPost.com, NPR (still feasting on Joan "McDonald's" Kroc's $235 million donation), other organizations and various non-profit magazines and non-profit broadcasters. (No offense meant if I left your outfit off this list.)

Meanwhile, grant-makers at foundations like the Alicia Patterson Fellowship, the Fund for Investigative Journalism, the Open Society Foundation's media wing, the Nation Institute, the Pulitzer Center, the Harvard Fellowships, the John Simon Guggenheim Memorial Foundation, and elsewhere have supported serious journalists.

As philanthropists take the seat in the story room once held by politicians, we should be glad. But not too glad, because there will never be enough philanthropists to restore the status quo ante. Nor will the market create enough billionaires like Jeff Bezos who are willing to rescue drowning newspapers like the Washington Post.

Wishful thinkers, and I'm one, can hope for media giants like Bloomberg and ESPN, now the most valuable media property in the United States, to be persuaded to add non-commercial news to their bundles. Perhaps ABC News, which is owned by one of ESPN's co-owners, could be repositioned as the noncommercial face of ESPN.

If summoning additional philanthropists doesn't work, can we stomach asking the political parties to re-enter the journalism business? To a limited extent, they already have, with the establishment of Fox News Channel and the retooling of MSNBC. As for me, I'm counting on the winds of technology to blow a fresh miracle through the news business. A Hyperloop for journalism!

(Jack Shafer is a Reuters columnist but his opinions are his own.)

(Jack Shafer)

http://www.globalpost.com/dispatch/news/thomson-reuters/130815/column-news-never-made-money-and-unlikely