Black and Blue and Hardly Read at All

Tough times for Seattle's dailies—and newspapers everywhere.

Let's get one thing straight: As a newspaperman, I think the world is better off with more newspaper people than fewer—which puts me in a very small minority in terms of public opinion.

But the market is making a different judgment. In 1983, Seattle's two newspapers were preserved via a federally sanctioned joint operating agreement (JOA), a device that allowed publishers to sustain failing papers for the sake of editorial diversity. These agreements allowed newspaper business monopolies in exchange for editorial duopolies. Thus, here, we have the locally controlled Seattle Times handling advertising sales, production, and distribution for itself and the Hearst-owned Seattle Post- Intelligencer, with revenue split and each company running its own newsroom.

The business model for daily papers, however, has continued to fail. With the Times/P-I divorce before the state Supreme Court, where oral arguments were heard this week, it's clear that even the drastic measures of creating federally sanctioned newspaper duopolies isn't working. The local Blethen family's Times claims that it is being bled by its agreement with the P-I and can only survive by cutting its partner loose. Hearst believes its only chance of survival is by clinging to the arranged marriage, because the Times owns the printing presses. Whatever the outcome, the economics suggest that Seattle ought to brace itself for becoming a one-newspaper town in the not-too-distant future. The real argument isn't whether both papers will survive but who will own the last one standing.

Indeed, in the years since JOAs came into vogue in the 1970s and 1980s, the problems facing newspapers—declining circulation, competition from broadcasting, a growing republic of nonreaders—have accelerated.

Falling circulations have given rise to circulation scandals, which hit a number of newspapers this last year, with some, like Long Island's Newsday, cooking the books to inflate circulation figures. Advertising has declined with media diversification, too. The effect of the Internet has been particularly nasty, with most newspapers offering their content online for free while still charging for the print editions.

Major advertising segments, like employment classifieds, are migrating—no, that's too passive, stampeding—to the Web. A late-2004 study of classified advertising trends by a consulting firm, Classified Intelligence, concluded that in the San Francisco Bay Area, Craigslist has cost local newspapers between $50 million and $65 million in employment-ad revenue alone. That's in just one market, albeit ground zero for Craigslist, and it's just one segment of the ad market. But it suggests the scale of impact still to come. Many publishers now regard Craigslist as the Ebola virus of the newspaper business, causing revenues to hemorrhage from the eyes. Those vanished dollars used to pay for a lot of local journalism.

Newspapers are adapting by creating their own online classified services, but that might not be enough. Long ago, alternative newsweeklies like this one found enormous benefit in free distribution. As paid circulation numbers decline and costs increase, and with pressure from free online content, some daily papers are now experimenting with free distribution, too. Paid circulation papers have always disdained papers like ours as being "free tabloids" or "throwaways." But free dailies have cropped up in Boston, Chicago, Philadelphia, New York, and most recently in Washington, D.C., where last week billionaire Qwest Communications founder Philip Anschultz launched the Washington Examiner. The paper is delivered at no charge to 260,000 households in targeted neighborhoods. Anschultz has applied to trademark the Examiner name in nearly 70 cities, including Seattle and Tacoma.

Such experiments suggest that the bailing being done at The Seattle Times to cut losses might not be enough. The paper is downsizing its staff this month, slashing more than 100 jobs, cutting back staffing in suburban bureaus, and reconsidering many features of its print product. The Times also is boosting the newsstand cost of both the Times and the P-I, from 25 cents to 50 cents, at the end of the month. Charging more, as readership and the news product shrink, doesn't seem like a recipe for success, especially with a Seattle Examiner looming as a possibility.

Many of the wounds to the dominant Times are self-inflicted. The paper's financial problems are due to marketplace changes but also to the judgment of Publisher Frank Blethen, including decisions that precipitated a costly strike in 2000–01 and the signing of a revised agreement with the P-I in 1999 that gave Hearst too big a piece of the revenue pie for too long, in exchange for the Times switching to morning publication. The Times' decision in 2003 to pursue an end to the JOA, which prompted the costly lawsuit by deep-pocketed Hearst, has also hurt.

All this comes when the media generally are held in low esteem. At speaking engagements, I've noticed that no matter what the venue or topic, when we get to the Q&A, people left, right, and center seem to have the same question: "Why does the media suck?" Not only is the newspaper business under siege and undergoing dramatic shifts—"unbundling" and "rebundling," as Slate press critic Jack Shafer describes it—but it is perceived as failing to meet its responsibilities of informing the public, let alone raising hell. Worse, as people tune out, you get the screaming-into-a-hole-in-the-ground syndrome: Even good journalism starts to go unnoticed.

That might prove to be the toughest challenge of all. Amid all the din of change, the declining dailies are faced with having to re-establish their relevance—and value—to a hostile public.

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