There's very little doubt now that gales of "creative destruction" are destroying the newspaper business.
Plenty of people are worried. Jobs are being lost. Independent watchdogging of government, business, and other institutions is threatened.
Readers, too, are having to come to grips with a world (or at least a city) without newspapers. The Monitor's Alexandra Marks and Bridget Huber talked with a number of them in this article about what the loss of the struggling Boston Globe would mean to them.
Trust in online news
In general, however, readers who already spend time online are not mourning the demise of the print daily. And that may be the most important reason for the crisis in the newspaper business.
Readers don't just settle for online. Increasingly, they appear to favor it. According to a survey conducted by the London-based TNS marketing group, readers now trust the information they get online slightly more than they do news from old-line newspapers:
"Globally, the most trusted information source was friends, with 42% of those surveyed saying that they trusted word-of-mouth recommendations. About an equal number trusted TV news (41%), online news (40%) and newspapers (39%).
"Naturally, there were variations in media trust from country to country, but several patterns emerged.
"Internet users in the US and Canada held similar attitudes toward the media, with the largest differences in the US’s comparative lack of trust in newspapers and TV news."
The report was conducted via the Internet, so you would expect some pro-online bias. But the survey indicates that when people rely on the Web for news they don't feel deprived. They like it.
Which makes sense. Online news is more up-to-date than print. More sources of news are available at the click of a mouse. And almost always there are deeper dives that can be done into subject areas that are briefed online. As newspapers implode, there are any number of possibilities in the online world (an interesting slideshow by Paul Gillin at the grimly named but comprehensive Newspaperdeathwatch.com site outlines some of them here).
Gloomy future for dailies
It is the intrinsic appeal of online news even more than the current economic travails of the newspaper business that seems sure to push more and more newspapers to the brink. The print-and-ink business is a high-cost proposition.
Shedding those costs is a painful process -- and in some cases a process that can't happen without bankruptcy, layoffs, or at all.
Despite owning big positions in the Washington Post and the Buffalo News and being an inveterate newspaper reader, Mr. Buffett declared, "We would not buy them at any price. They have the possibility of going to unending losses.... I don’t see anything on the horizon that causes that erosion to end."
In other words, the man famous for determining fundamental value in a stock before investing sees none in this industry, despite beaten down share prices.
Struggling in the trenches
In the latest blow, the New York Times has threatened to give official notification to the Boston Globe's labor unions that it will shut the Globe in 60 days if the Newspaper Guild does not give up its contractual perk of lifetime job guarantees for some more senior workers.
The warning (an official notification process under the Worker Adjustment and Retraining Notification Act) may be a negotiating tactic to win financial concessions from the Globe's unions. And so far, the Times has not filed the WARN notice. But given the Globe's losses, the Times is likely to be serious about following through.
Given that the overall concession the Times has been trying to wring from the Globe's unions was $20 million while the company is projected to lose $85 million this year, it is difficult to see how anything short of draconian layoffs and restructuring lie in the Globe's future.
The E.W. Scripps Co. shut down the Rocky Mountain News. The Hearst Corporation shut down the Seattle Post-Intelligencer -- keeping alive the SeattlePI.com website -- and has threatened to do so with the San Francisco Chronicle.
It may be that restructuring, slashing costs, and perhaps even a return to local ownership (as former Globe economics columnist David Warsh argues here) will help them through tough economic times. At the least, such moves may buy time to execute a transition to a Web-first or perhaps Web-only publishing strategy.
In the end, it is readers who decide. In a hundred thousand individual decisions, readers touch off the process of creative destruction. And increasingly readers seem to be deciding that daily print and ink are unnecessary.
What they don't yet know -- what no one knows -- is how comprehensive the online news reports will be once the old-line newspapers lay off the journalists whose work has been feeding the print paper, which in turn has been feeding the online news sites.
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