A newspaper company, like a public broadcaster,
could be organized as a not-for-profit, tax-exempt corporation. It
could still sell papers and advertising, it could still develop new
Internet revenues, it would still pay market wages and salaries (or
maybe better), it could re-invest in improving its own staff and
facilities and operations, it just couldn’t make a profit. And it
wouldn’t pay taxes or dividends.
Here is more. As newspaper ads move to the web, draining a key source of revenue, I see a few options:
1. Subscription finance with high prices and few ads. A bit like the Financial Times. Of course this means fewer newspapers and fewer newspaper pages. On the plus side, fewer articles would continue on other, distant pages.
2. Sleazy tabloids. But the competition with the Internet remains.
3. Some clever newspaper coup to take over Web processing of commercial information and leapfrog over ebay and Craigslist.
4. Web products evolve into customized, print-on-demand newspapers. A some major newspapers survive by going the hybrid route, or by merging with their web competitors. "What is a newspaper?" becomes a question of degree and we needn’t mourn the lack of pure newspapers.
5. Non-profits would take in revenue and also raise donations by selling access to social and political networks. What would a date with Maureen Dowd go for?
6. Extremely partisan, low-cost "rag" newspapers, akin to 19th century U.S. experience, and paid for by subscription. Advertisers seek to offend nobody, and thus exert a centrist influence over newspaper content.
I place virtually no weight on option #3. Comments are open.
I suspect big city (1 million plus) newspaper subscriptions will increasingly come to resemble NPR or ballet theater season ticket subscriptions — that is, signalling devices that one belongs to the “proper” social group. Small town papers will increasingly come to resemble community theatre and other semi-commercial “hobby” type economic activities — more as an outlet for creativity and a place for full-time volunteer types. People who actually want timely information quickly will continue to migrate to craigslist, google, and other internet venues.
P.S. Your blogads bar overlaps the comments textbox on IE6, making it impossible to see the rightmost 15 characters of each line that you are typing. That makes it pretty hard to proof your comments!
Newspapers could become profitable again if they offered something that was useful. Unfortunately, most of the newspapers in the country have forgotten their job – to tell the news. Look at the local papers – many of which seem to be very profitable – they stick to their job.
One other comment. The post on ยง501 (c)(3) is a bit off. Nonprofits can offer products or services. There are some complicated rules about competing with the for profit entities. (See the Mueller Macaroni case where a university inherited a company that made macaroni and the courts said you can’t do that without paying taxes.) But there are lots of places in society where c3s offer a service or product. But the basic idea that newspapers should go into this realm is loopy.
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In our area, we have a big paper, which is losing money, and a small weekly city paper, which makes money and is free. The money-making paper strictly sticks to local news and sports or local-angle news (town soldiers in Iraq, etc), while 95% of the articles in the big paper are wire-service copy you can get off the Internet. Not sure what this indicates generally, other than something to do with “narrow-casting” and local focus.
The problem with highly partisan newspapers is they would compete directly with the blogosphere, which is both highly partisan and more knowledgable than your typical journalist on the topics they blog about.
One correction (to the linked article, not Tyler): Nonprofits can, of course, earn profits; what they can’t do is distribute them to owners. This leads to important organizational differences (which might well explain why newspapers tend not to be nonprofits), but not intrinsic limitations on what the entity can do/make/sell.
“fewer articles would continue on other, distant pages.”
This is one of many reasons why the Financial Times is my paper of choice. I like being able to read it linearly (or actually from front to back) without page jumping. I find front page ‘continued on…’ to be obnoxious now in comparison.
Fewer high placement ads = higher cost per ad, less paper to print, and a presentation that caters the reader. Of course it takes an economics newpaper to figure that out!
I also like the idea of some sort of at home printing, or at least more options to have any paper printed locally and delivered. My copies of the FT are printed in San Francisco and arrive in my Hawai’i mailbox the following day. Reading about things that happened two days ago is getting less and less tolerable in the internet age.
#4. There is no loneger much of an efficiency gain from having an entire newspaper. It used to be you needed the resources to print a million copies. Now all you need to do is post to the internet. This means more efficiency via division of labor. I can choose where to get my sports info, my style info, my business info, and my headlines (all different sources). The newspaper will fade from importance and thats a good thing.
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