The mystery that is the future of newspapers keeps boggling the minds of many in the industry. The demise of the physical “paper” element seems inevitable. It is always a wonder that the paper versions of the “news” are still to be found. The answer to “what will people read on the train” has been found in mobile phones and tablets. London’s underground is about to complete the installation of WiFi which would enable passengers to browse underground, hence removing the last impediment to digitising the catching-up-while-commuting experience.
Newspapers have been bracing themselves for the move to 100% digital versions for over 10 years, but the most common sentence heard in this context – “we are still trying to figure out how all this will make any money” – is still heard often. In the meantime, a temporary answer has been found by investing in technology while radically cutting the spending on content.
Across the industry there are fewer and fewer journalists with regular jobs, and fewer and fewer paid contributors. While newspapers wait patiently for the gradual growth in willingness of reluctant advertises to pay more for online ads, they fully take advantage of the voluntary spirit of the internet; everybody wants to produce content and everybody wants it to appear under the respectable umbrella of an established newspaper, paying for it seems hardly necessary.
The fact that the production of opinion is so much cheaper and so much less accountable, than the production of news, led to a new convenient theory: we all know what’s going on because it is on CNN/BBC/SKY or “on the internet”, therefore what we are looking for now is commentators who would “make sense out of it all” for us.
The outcome is that almost every huge news story in the world ends up being covered, at least at some of its crucial moments, weeks or months, by a very small number of correspondents who are actually on the ground. Their reports get mixed in with a much larger body of content from underpaid, in most cases, if paid at all, commentators and witnesses.
The attempts to increase income, rather than cut spending, on online journalism suffers constant difficulties. Advertising grows slowly and so far most users refuse outright to pay for content, least of all for news. The “pay wall” model is struggling, though some newspaper are convinced that if they insist on keeping a certain amount of content behind the wall, their readers would eventually break and pay.
With all this at the background many were surprised to hear two months ago that billionaire Warren Buffett and his company Berkshire Hathaway decided to spend $142 million to purchase 63 dailies and weeklies from Media General Inc. of Richmond in the US.
“Warren Buffett buys newspapers. Is he nuts?” asked Eric Wardle on the Washington Post’s opinion blog. Why spend money on those small local and regional papers, asks Wardle, and answers “while the big regional and national newspapers have elevated the crisis of newspapering to a countrywide obsession — complete with constant updates on circulation losses, drops in advertising revenues and the like — small weeklies and dailies have been plodding along. Not printing money, mind you, but making a living.” This makes sense to Wardale: “Slow, steady, unspectacular gains,” he concludes, “Sounds a lot like a Buffett investment.”
The need for local and specifically targeted news is there; the hunger exists among readers, and local advertisers can recognise their gain from cheap online advertising more easily and immediately than the large corporates. But the production of quality local news depends on employing local journalists and producing content independently and locally. Would Buffett withstand the temptation, to which most owners of local newspapers chains have long ago yielded, to produce unified content on the cheap for all his new outlets? If he does, his gamble might prove successful.
Gini Dietrich in Spinsucks sheds some light on Buffett’s business model, in his letter to publishers and editors of the newly acquired newspapers: “The original instinct of newspapers then was to offer free in digital form what they were charging for in print. This is an unsustainable model and certain of our papers are already making progress in moving to something that makes more sense.” In short, Buffett believes that what did not work on the national and international news level, would work at the local level; that people would be willing to pay for exclusive near-home information.
It is a bold experiment, though the sum invested, while substantial, does not endanger Berkshire-Hathaway. Businessmen like Buffett are there to make money and money will not be made unless the newspapers provide quality content beyond competition. Such content that the specific demography it targets will be willing to pay for, and have trust in; the kind of trust that can be bought only by providing editors with complete editorial independence. Will Buffett let them thrive? The answer to this question could pave a new path for the future of journalism, or end in great disappointment. Many in the world’s media markets will be watching those little US southern newspapers very very carefully.