The daily newspaper, the bedrock of the 4th Estate, is on life support


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The state of the dying newspaper industry had managed to slip out of the news the last couple of years as the depth and frequency of news staff layoffs, dramatic cuts in content and news of newspaper mergers/acquisitions and closings became routine.

But when Warren Buffet recently declared the newspaper business model is “toast” and a number of university and research studies revealed just how decimated the Fourth Estate had become, the death of newspapers got some belated coverage.

That business model Buffet, whose Berkshire-Hathaway owns some 30 newspapers nationwide, referenced was the newspaper industry’s failed, abysmal attempt to transition from print-centric to digital-centric media.

TRENDS JOURNAL GOT IT FIRST, AND RIGHT

The Trends Journal called that business model dead in 2016:

“For a decade, the newspaper industry has been reinventing itself into a digital business with nothing but profound losses to show for their efforts. Digital alone will not save newspapers.“ (TJ, summer 2016)

To save itself from the massive paid circulation, classified and display advertising revenue it had lost during the last two decades, the industry turned to digital platforms to stay profitable.

But as our many trend analyses and forecasts on this topic through the last five years demonstrated, newspapers have not made investments in their newsrooms for the last 15-plus years.

Instead, they engage an aggressive merger/acquisition path to consolidate operations, drastically reduce costs and temporarily improve margins to enhance digital audience and revenue streams.

While it can be argued that most major industries engaged the same M/A strategy, how many of those made the majority of cuts in their prime product-producing divisions of their operations?

JUST HOW BAD IS IT?

While a variety of studies by Pew Research, the National Newspaper Association, Columbia Journalism Review and several universities conclude newsroom staffing levels have dropped between 45 and 55 percent during the last 15 years, our assessment is the cuts are even deeper… critical newsroom jobs, from investigative reporters to assignment editors, have been replaced by low-paying “digital content” positions.

What is the result of slaughtering news resources?

More than 1,400 cities and towns in the United States have lost their local newspaper in the last 15 years, according to a University of North Carolina study.

As news shrunk, so did print advertising, down more than two thirds in the last 15 years and losing 10-plus percent each year, according to the Pew Center.

Most important, new data are showing impact of the absence of local reporting power is having not only on those communities but in helping to shape national news priorities.

POLITICO, for example, found low voter turnout in the 2016 election in communities with no or low local newspaper penetration. A study by Texas A&M showed how municipal spending and corruption is increasing in uncovered communities.

Other university studies conclude that growing ignorance of national and world events is heightened by the absence of media outlets to localize that coverage and show how that news impacts those citizens and their communities.

FACEBOOK’S KICK IN THE TEETH TO NEWSPAPERS

There are 60 percent fewer journalists at work today in large part because of the scam. Facebook providing snippets of legitimate news created and owned by others to draw traffic and sell ads on that traffic… news and information it never produced. Like Uber doesn’t own a car, or Grubhub a restaurant, Facebook doesn’t employ reporters, editors, photographers or any producers of original content.

Corresponding with a decade-plus of declining revenue and readership for newspapers, digital advertising exploded, flooding the coffers of Facebook, Google and other social media giants, while draining the resources of newspapers.

As newsrooms starved, Mark Zuckerberg orchestrated one of the great scams in media history.

Facebook and Google alone now control, own and manipulate 60 percent of the digital advertising market.

Never mind that its digital advertising is, as we have reported for five years now, an unproven, unaccountable, manipulated and fully unreliable source for any return on advertising dollars.

It’s a mass of data confusion and contradictions rammed down the throats of individuals, businesses and industries who believe no other alternatives exist.

The promise was Silicon Valley geeks concocted the magic digital elixir to bring targeted advertising messages to every digital device on the planet.

After all, these monoliths know every online purchase you made, websites you visited, searches you engaged and more – your digital footprint is the click bait advertisers use to reach you.

BUT DOES IT WORK?

But as we have long forecast, and data are now supporting, Facebook and Google have been cooking the numbers. In fact, as the data show, Facebook’s advertising and traffic data are a lie… its digital advertising does not reach the audiences promised and it has been falsifying those metrics for years.

Facebook, in a series of announcements, was forced to acknowledge it miscalculated some metrics vital to the interests of publishers and marketers counting on digital ads to reach target audiences.

Among other “misstated” metrics, Facebook admitted that it over-reported video advertising’s viewing time for more than two years. The social media giant disclosed that its measurement for the average time users spend viewing was vastly overstated—by as much as 80 percent.

Marketers, advertisers and publishers for years made ad buys and content decisions in the billions of dollars based on grossly miscalculated metrics.

Then it was revealed that Facebook, without the knowledge of its users, was selling their personal data to other marketing and research companies.

Not enough scandal and disgrace?

Perhaps not.

In the summer of 2018, Facebook led the charge to declare itself judge and jury in determining what content is “inappropriate” and must be censored.

The Media Censorship trend, which is still in high gear, revved up last summer with the multi-platform shutdown of Alex Jones and his media operation INFOWARS. It was a full scale assault on First Amendment rights on the internet.

Then Facebook engaged a massive purge of political, opinion-driven and alternative media accounts for “inauthentic behavior.”

Without warning, and scarcely any explanation, 800 pages were closed October 11 by Facebook for “working to mislead others about who they are, and what they are doing.”

Most of the pages “purged” by Facebook were independent media outlets that advocated for, among other things, different perspectives on the news of the day, pushed for marijuana legalization, chronicled cases of police brutality, advocated for independent political candidates, promoted a variety of social causes, railed against government spending and scores of similar accounts.

Facebook even went so far as to shutter 68 pages and 43 accounts linked to a marketing group promoting the presidential ambitions of Brazilian far right-wing presidential candidate Jair Bolsonaro, who eventually won.

The social media giant issued a statement saying it had acted against the pages and accounts linked to Raposo Fernandes Associates (RFA) “for violating our misrepresentation and spam policies.”

Facebook accounts such as Anti-Media, Reverb Press, reporters from RT, the Free Thought Project, Reasonable People Unite, Police the Police and similar pages, drawing hundreds of thousands of followers were deleted.

And finally, and painfully ironic, Facebook last year launched an initiative to aggregate and drive local news across its platforms only
to quickly discover there was not enough local news being produced to support the initiative.

A handful of major national outlets, like the New York Times and Washington Post have suffered lower circulation losses than national averages and have built strong digital subscriber bases. The Wall Street Journal was the first major newspaper to charge for its online content in 1996. The New York Times introduced its paywall in 2011 and the Washington Post in 2013.

Today the Times boasts 3.4 million digital subscribers, with 2.7 million of those subscribers paying for news and the rest consuming feature news, like crosswords and cooking, as extra. The Journal has 1.7 million digital subscribers while the Washington Post has 1.5 million digital subscribers, according to people familiar with its operations.

But these national media outlets are the exception. For the vast majority of newspapers, digital subscription revenue is in single digits, according to Pew and other sources.

A NET LOSS FOR BALANCED COVERAGE

The decade-plus scramble to find new revenue sources to support quality news reporting has failed. And that failure is not only fiscal.

A new study by RAND concluded that between 1987 and 2017, news content produced and delivered across multiple platforms – print, online and broadcast – has transitioned from event- and fact-based reporting to coverage that is “more subjective” and opinionated.

Prime-time cable news and online sites lead the way in this transition, which has accelerated in the last decade, but the study also found a shift that newspapers are continuing their journey to “emotional,” opinion-driven coverage too.

In short, RAND concluded: “All media are shifting away from facts and analysis in public discourse.”

In particular, cable news networks CNN, MSNBC and Fox drive substantial portions of their audiences and advertising revenue off of opinion-based news casts, from Carson Tucker to Rachel Maddow and Chris Cuomo.

These shows aren’t journalism-based, they are their own version of reality shows. They’re another marker for the death of real news, real reporting, real context and real analysis.

Here’s the update: The Fourth Estate as we’ve known it for the past century is indeed dead.


TREND FORECAST

Most small and mid-size newspapers will continue to lose print revenue at a double-digit pace each year. The trend of merger and acquisitions will continue, but the pace will slow down for the simple reason there are few family- or small company-owned operations for the bigs to acquire.

One trend to watch in the waning days of the once mighty newspaper industry, however, is the growing number of newspaper operations seeking not-for-profit status. The Salt Lake Tribune — the largest daily newspaper in Utah — is the latest to seek IRS approval to function as a not-for-profit. In just the last four years, the paper lost half its circulation and about half of its news staff.

Currently, there are several newspapers that legally are profit operations but owned by nonprofits. For example, the Tampa Bay Times in Florida has been owned by the Poynter Institute since 1978 and the Philadelphia Inquirer and its sister publication, the Daily News, after several ownership trials, are now operated by Lenfest Institute for Journalism; the newspapers themselves are for-profits subsized and owned by not-for-profits.

It remains to be seen how much energy this trend has and whether these new business models will work.

However, we stand by our Top Trend 2017 forecast, RIP Fourth Estate:

“The daily newspaper is on its death bed. No longer the people’s protectorate, tanking public trust and shrinking financial resources have limited traditional media’s influence on the public. The Fourth Estate – the unofficial fourth branch of government designed to hold powerful people and institutions accountable – is no longer the domain of the mainstream media. (Trends Journal, December 2016).”

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