It is well known that the digital transformation of the local news business robbed newspapers of much of their print advertising and subscription revenue. They have tried to transform themselves into digital properties with online advertising and paid subscriptions for products people read online. For the most part, it has failed. One outcome is that an extraordinary quarter of all American newspapers have closed in the past 15 years. Many others are on their last legs.
A major new research report from the Hussman School of Journalism and Media at the University of North Carolina at Chapel Hill covers the carnage in great detail via a 124-page document called “News Deserts and Ghost Newspapers: Will Local News Survive?” The analysis points out that vast parts of America have been left without any newspaper.
Due to the shuttering of local papers, half of the journalists in the industry lost their jobs over the same period. The other major by-product is that 1,800 American communities have been left without a newspaper at all. At the start of the period examined, which was 2004, there were 9,000 local papers in the United States. Print circulation across the country has dropped by 5 million since then.
Seventy of the papers that have closed are dailies. About 2,000 weeklies and other “non-dailies” are gone.
What happened? As late as the 1990s, many newspapers were highly profitable, some with profit margins over 30% of revenue. Their only competition was local TV and radio. The wide use of the internet was almost a decade away. Access to broadband did not explode until after 2000.
Newspapers were, for the most part, late to the digital transformation of news. Portals like AOL began to move news online. Many publishers viewed this as an anomaly. Print margins were too good to push into a different model. By the time the process began at local papers, it was almost too late.
The internet made news free in many cases as well. The local consumers did not need to pay for local news in many places. Newspapers had to replace local advertising that had moved to the internet. Often that was successful. Getting people to pay for online subscriptions was more difficult. That challenge still exists as the final hurdle many papers need to clear to stay in business. A few well-funded papers with large numbers of journalists have made it. Millions of people pay for such papers as The New York Times, Washington Post and Boston Globe.
Almost no local newspapers have been able to keep editorial staffs at levels of a decade ago. This undermines product quality. In turn, readers do not see much worth paying for.
The worst part of the research is that it is very clear the process is not over. Thousands of more newspapers will close in the next year. Much of the industry will not even be a ghost.
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