September 19, 2012

400-Word Scenario #7: No More Newspapers

Patrick Marren
Partner

[We scenario consultants can sometimes be jaded, but occasionally even we see a graph that makes our eyes pop. The following mini-scenario is based on this stunning graph: http://www.businessinsider.com/newspaper-advertising-collapse-2012-9 . In EXACTLY 400 words, let's examine what MIGHT happen when print news goes the way of the buffalo...]

The first major metropolitan newspapers went on-line-only in the 2010s. The New Orleans Times-Picayune had gone virtual briefly after Katrina in 2005, when their production facilities had been rendered unusable. But at the end of 2008, the two Detroit newspapers, the Free Press and the News, which were already operating under a joint agreement with combined back-office operations, cut back home delivery to just Thursday, Friday, and Sunday, with a 32-page edition available at newsstands other days.

By 2011 physical circulation had declined by some 50% for most newspapers over the previous 15 years. By 2015 most major metropolitan newspapers had been forced to cut delivery back to just a couple of days a week; many simply abandoned print. Some hung onto delivery, since with advertising revenue declining, delivery revenue was an ever-increasing percentage of their income. But as the Greatest Generation disappeared and the Baby Boom generation began to die off, the public appetite for consuming news via print simply would not support continuing operations. 

By 2020 Chicago, the city of "The Front Page" and "His Girl Friday," a city that had boasted eleven daily print newspapers at its height, had none. The Tribune and Sun Times existed merely as on-line wisps of their former selves. "Serious," "educated" people read the on-line New York Times and Wall Street Journal on their commutes through their eyepiece readers, or listened to NPR; most people were more likely to be watching TMZ, Youtube or Fox News. 

Rigorous number-crunching by 2020 had isolated exactly what types of media people would pay for. These were, in order: celebrity/entertainment; scandal (subset of celebrity);  extreme partisan political opinion; sports; and financial news. "Classical News Reporting" was the province of NPR, the New York Times, and a few other high-end on-line publications. Some slivers of this segment were fairly high-margin, as the educated 10% would always pay to appear better-informed. But it had decreasing influence over politics and society. 

The real winners were those who were able to take advantage of the increasing lack of local news coverage. Garbage collection, policing and zoning were boring, and those negatively affected no longer had any media megaphone for complaining. So local corruption increased massively, poverty and disorder grew...but no one was in the forest to see the trees fall. Small towns, impoverished neighborhoods, and prematurely aging ex-urbs were easy prey for powerful moneyed interests...some affiliated with New Media titans.

Comments  | 

pmarren
The epic decline continues: http://www.businessinsider.com/newspapers-are-losing-13-of-print-revenue-for-every-1-of-digital-revenue-2012-12

Thoughts?