By John Cribb ~ Cribb-Greene

The "popular wisdom" that small and mid size newspapers are going to vanish is ridiculous. Here's why. 

The primary product newspapers create is local news and information. The public's appetite for local news has not diminished; in fact, it has increased in recent years. The growth of available information on the Internet has increased the need for "quality news" - news that is gathered, formatted, and fact-checked by professional journalists. 
The idea that newspapers are somehow in the "buggy whip" business - with an obsolete product - is absurd. Local news is not a product that no one needs or wants - it is a product that consumers need more than ever. 

The problem faced by newspapers is not one of having an obsolete product; it is one of having a wrecked financial model. The way newspapers have been paid for their news product - through advertising and subscriptions - has been severely disrupted causing revenue declines throughout the industry. We believe this financial model will be repaired or replaced.

Accelerating the problem has been the severe recession, which has brought many industries to their knees, newspapers included. The recession will pass, and when it does newspapers will recover as leaner and more efficient businesses. Nevertheless, they must fix the financial model.

Subscription income is a substantial part of paid papers' revenue, but has been in decline for years. We think that ink-on-paper newspapers will always have value to a segment of consumers and the trick will be to get those consumers to pay more for this type of product. Ink-on-paper newspapers' single copy and subscription prices are far higher in nearly every nation other than the U.S. - so it appears that it should be possible to increase both single copy and subscription prices over time. The convenience of a printed piece will always have value to some readers.

The real issue appears to be the financial model for advertising revenue on newspaper websites and electronic products. Digital/electronic advertising is the same as advertising in a newspaper, meaning the publisher is selling "eyeballs to advertisers." Publishers need to become far more sophisticated in marketing their readers' demographics to advertisers to increase these ad revenues. With electronic delivery, small increments in revenue growth add large gains to profits. Although monetizing digital/electronic advertising is critical to newspapers, we would suggest that the bloom may come off the rose - meaning advertisers may find that this type of advertising is not nearly as effective as first thought. Should this be the case, there may be a return to traditional print ads. The continued popularity of preprint inserts seems to be evidence that printed advertising works well.

Classified advertising is another story, and it may be that conventional newspapers must adopt an approach used by many free newspapers and shoppers. This approach is to provide classified ads for free, and use the classifieds as a device to enhance the readership of display advertising.

A serious obstruction to getting paid for digitally-delivered news is the pilfering of this information by other aggregators. It seems that a simple change in copyright law (returning the law to what it was twenty years ago) could solve this problem. In a recent Editor & Publisher editorial, they talked about a potential change and had this to say: "But if Congress restored the explicit right to sue under the common-law unfair competition principle that they took away a couple of decades ago, newspapers and other creators would have a powerful weapon against free-riders. The likely outcome would not be a blizzard of litigation, but an accommodation between originators and aggregators on a fair way to do business. Newspapers would at least have a fighting chance in this digital age."

We don't believe there is any magic solution for the issues currently plaguing newspapers. Likewise, we don't know what effect these problems will have on large, metro newspapers who have suffered far more intensely than their smaller brethren have. Some large papers have already folded, and it is likely that others will not survive. Mid and small market newspapers are weathering better, and are poised to rebound in a stronger economy. However, profit margins and revenues may not rebound to past levels.

Will we still have newspapers delivering news by conventional and electronic means in the near and far future? Absolutely.