Survival of the Newspaper Industry - Essay Example

SURVIVAL OF THE NEWSPAPER INDUSTRY: IMPACT OF THE INTERNET. Background Newspapers and the internet have an unmistakable relationship, both being in the communication/information industry, although newspapers have been around for much longer than the World Wide Web. Since the advent of the latter technology in the late 1950s, there has been widespread controversy on the impact that it would have on the world of print media, specifically newspapers, which have been the most common mode of mass communication for quite some time. Some experts in the industry believe that the net signifies the end of newspapers, telling from the suffering readership and circulation that was experienced as the internet gained popularity (Teeling, 2007), while others argue that the internet’s power to supply accurate up to date information is greatly reliant on newspapers as they make up the single largest information collection vehicles in most cities across the world (Hughes, 2006). We shall tackle both sides of the argument individually so as to gain proper insight on the issues involved in the debate. Negative impact The negative impact that the internet has had on the newspaper industry is mainly as a result of the switch of consumers from printed material to electronic material for news, entertainment among other uses. The impact of this switch is evident in the steady decline of readership and circulation which has since become more of a norm than an exception, with readerships dropping in rates as high as 16% (Miller, 2005) The internet affects print media on three major frontiers, advertisement revenue, readership and innovation and technology. Since the largest source of revenue for newspapers is advertisement, newspapers stand to suffer if they do not offer competitive packages for their customers. This has led to severe rates undercutting which has in turn dug into the revenues of the newspapers resulting in job cuts, plagiarism and writing of untrue and fictitious stories and events with shameless abandon (Hughes, 2006). The reason for this can partially be attributed to the fact that advertisers try to promote their products to the highest possible audience at the lowest cost, the internet offers a better than perfect substitute for newspapers for several reasons. For instance, the internet has far much more ahead as far as accessibility is concerned compared to newspapers. Whereas the latter offers some options for leisure and recreation in one or two pages, these options are comparatively limited to those which the internet can offer because at the simple click of a button one can access millions of online entertainment sites. Online advertisements are also more effective because in the first place, there are lesser limits to the size of the advertisement in relation to the total surface area available wherein it might take up to a quarter of the page at a minimal cost. In contrast, a quarter page advertisement in a newspaper is bound to cost quite a lot, actually about 21times that of the online advertisement (Karp, 2007). It is therefore quite clear that online advertisements are more cost effective than their print counterparts. In addition, online advertisements have the option of containing hyperlinks, which connect the user to the advertiser’s website where he can find much more information about them, their products and/or services, giving rise to more opportunities of turning the advertisement leads into sales. The newspaper advertisements can do little else than just display the advertisers’ contact details after the main content. The advertisements themselves have much better design when online because they may be made dynamic, which basically means that they may have movements and even sounds to accompany them which greatly enhances their memorability and ability to capture the attention of the target reader. In sharp contrast, advertisements in newspapers are limited to showing a single picture which may not be as attractive. The next major threat to newspapers is that of readership decline, which can be attributed to quite a few reasons, such as the increased interactivity that has been made possible by the advent of the internet. Whereas it is possible to have some level of reader interaction with newspapers, it is limited to sending of opinions through ordinary mail and more often than not these may not be published owing to the limited space that is available in the normal newspaper issue. On the internet one can post his/her opinion and watch as it is published instantly for all to see. Another reason for readers to prefer to go online than read the newspaper is the relative low cost of a large collection of information that is available at once from the World Wide Web, which is in sharp contrast with the information that is collected and assembled in a single issue of print (One world south Asia, 2008) Information is also broad and widespread covering the entire globe whereas the newspapers cover news that is more often than not local in nature. Therefore for the same cost or less, a reader can access much more information both in-depth, as there are many writers to read from and broad, as news may be accessed from all over the world through the internet. The third avenue through which the internet affects the newspaper industry is the frequency in which technology innovations are continuously unveiled in the internet market thereby enhancing its usability and attractiveness, whereas they are quite rare in the newspaper industry. These innovations range from applications such as blogs, where readers can post their opinions and comment on other people’s opinions, live video feeds on news and stories, and news alerts. There have also been great improvements in the accessibility of the internet on hand held devices, which means that news and all other services that would require a reader to purchase and carry around a bulky newspaper can now be accessed on an easy to carry device such as a mobile phone, datacenter, personal digital assistant (PDA) of palmtop computer. The internet has also grown so much in its applications that it is virtually impossible to have a business without a connection and most business consider the purchasing of a newspaper or subscribing to one as wastage as they can already access all the information they need from the internet already in the organization. All these have had adverse negative effects on the newspaper industry but there are some arguments that the internet actually complements the newspaper industry rather than destroy it. We will examine the arguments to this regard next. Positive effects The internet is famed to be the most powerful information tool of the 21st century and therefore has had a great impact on the newspaper industry from improving information gathering techniques, to allowing for newspapers to be distributed to wide geographical areas at minimal cost. As much as print readership has been declining as a result of the advent of the internet, some newspaper companies have decided not to fight back but rather to go along with the internet revolution. While there are many advantages that come with the use of the internet to disseminate information, newspaper companies still provide the information to be disseminated with their extensive networks of field reporters and correspondents. Hughes “While technology may change methods of delivery, as for example online, there is no content to deliver without a news organization to gather and edit it” (Hughes, 2006, s8). This shows that the same internet that is potentially threatening the newspaper industry is actually dependent on it and therefore cannot eliminate it completely. From an economic point of view, the point of concern is how long it would take online journalism to catch up to print media in terms of contribution to the economy. According to the Project for Excellence in Journalism annual report, it would take the eleven years for it to catch up, if online advertisement revenues continued to grow at the current rate of 33 percent, which is highly improbable, and the newspaper journalism continued to growth at 3 percent per annum. It is therefore quite evident that the newspaper industry is still very much alive. Another reason for optimism in the newspaper industry is the fact most newspaper companies have decided to adopt the use of the internet and have online versions of their newspapers and coupled with their solid brand reputations, strong cash positions and wealth of knowledge. These companies have managed to offset their lost revenues in print media by shifting operation to online advertising. Besides, there is a tendency of information from newspaper companies to have more credibility as opposed to other sources of information such as blogs (One world south Asia, 2008). This of course works in favor of the newspaper companies, whose online publications attract comparatively more visitors. The internet has also gone a long way in improving how breaking news and information is transmitted from one area to another, wherein news that is breaking in one end of the country can be easily and quickly transited to the company via the internet thus aiding in the overall reliability of the newspaper. The emergence of new technology has also worked in the favour of the newspaper companies, in their bid to have the internet work for them as opposed to working against them with innovations such as RSS news feeds, which directly send news to the clients’ computers automatically rapidly growing in popularity with 96 percent of the newspaper companies sampled during the The Bivings Group newspapers study were using this technology (Teeling, 2007). The role of internet technology in the newspaper industry is poised to grow even bigger with Bill Gates, the immediate former Microsoft chief executive, together with Arthur Sulzberger Jr. who is the publisher of the New York times recently unveiling plans for an ‘e-paper’, a hand held electronic device that would hold the contents of the New York Times news paper and thereby possibly eliminating the printing and delivery costs. Although so far this new technology has not yet been perfected to merchant standards, and neither men gave any indication on how much each would cost of even how much the customer would be charged to access the newspaper’s online content, knowledge that the system is being developed inspires hope of a brighter future for newspapers. (Hughes, 2006). Because of the internet, news has become more interesting with the inclusion of dynamic pictures, interactive discussions, video streaming, and home publishing. Which has in turn created a new market for newspaper companies among the internet users, the new generation that experts observe is abandoning the traditional ways of gathering information. This, with the increase in innovations of internet related gadgets has opened new horizons for the newspaper companies. There are also stringent restrictions as far as the use internet content is concerned as can be attested by the recent lawsuit against Google’s subsidiary YouTube, which was charged with copyright infringement which gives the newspaper in print a bit more freedom since the rules that govern the material contained in the newspapers are clear cut and generally understood, which is not the case with internet publishing where we have a lot of overlapping and loop holes in the regulatory systems. Thus print media has an edge as it have far fewer legal tussles than internet media. By partnering with already established internet companies, newspapers can boost up their online revenues to as to offset their losses that have been incurred either directly or indirectly by the use of the internet. Most of these companies fall under the search engine, indexes and online directories. Since they have access to millions of web pages across the world, they are at a position to provide support to the newspapers by placing site relevant advertisements. Google Inc. Chief Executive Eric Schmidt says, “It's a huge moral imperative to help here.” As he realizes the effect that the internet has had on the industry and so once again the internet has the potential to come to the rescue of the newspaper industry which it threatens. Conclusion In closing, the internet has had both a positive and negative impact on the newspaper industry as has been exhaustively explained above and it would therefore unfair to take a specific stand and say that it either good for the industry or bad. Instead, it would be more advisable to take a more compromising position in which while appreciating the fact that the internet has led to the loss of a significant chunk out of the newspapers’ revenues, there are some advantages that can be attributed to it and therefore it is up to the individual companies to make the effort to identify strategies to mitigate the negative impact of the internet on their business operations and promote the positive effects so as to ensure survival. References Erin Teeling “The use of the internet by Americas Newspapers” Posted on the World Wide Web on August 1st 2006 URL: http://www.bivingsreport.com/2006/the-use-of-the-internet-by-america%E2%80%99s-newspapers/ John Hughes, “In the age of Internet, Newspapers are still big business.” Posted on World Wide Web on May 03, 2006 URL: http://www.csmonitor.com/2006/0503/p09s01-cojh.html. NBC11.com “Google: New Ad Service Should Help Struggling Newspaper Business” Updated June 11 2008 URL: http://www.nbc11.com/news/16579514/detail.html?rss=bay&psp=news. One World Asia, “The Threat from the Internet” Posted on World Wide Web on April 21, 2008 URL: http://southasia.oneworld.net/Article/the-threat-from-the-internet. Robin Miller, “A Recipe for Newspaper Survival in the Internet Age” Posted on the World Wide Web on Wednesday, Nov 30, 2005 at URL: http://slashdot.org/article.pl?sid=05/11/27/1645214&from=rss Scott Karp, “Newspaper Online vs. Print Ad Revenue: The 10% Problem” Posted on World Wide Web on June 17, 2007 URL: http://publishing2.com/2007/07/17/newspaper-online-vs-print-ad-revenue-the-10-problem/ Read More