Diary

The Newspaper Bailout Push Is Fast Approaching

One of the Rules Of The Ride established at my blog site’s inception is that conservatives should accept the “mainstream” media for what it is; namely, a propaganda arm for the Left in this country, and seek to destroy that media through economic means.

This has largely already happened without any concerted effort by conservatives in the case of newspapers; word has hit today that the New York Times is down to just $34 million in cash and could be in imminent danger of closing. This is playing out all over the country, as several papers have opted to shut down or go to an online-only format.

The fact is, the newspaper business is largely obsolete – and what about it isn’t obsolete is quickly going the route of the buggy whip or the rotary phone.

I’m reminded of two things. First is this:

Second is a personal story.

I spent a good part of my early professional life in the publishing business, as from 1997 to 2004 I was the founder, editor and publisher of Purple & Gold Magazine, a niche publication covering LSU sports. Most readers of P&G would say that it was a creative success, but in our best years we were a break-even financial story. Some of that had to do with my mistakes as a young entrepreneur, some of it from the fact we were undercapitalized and had difficulty building the capability to execute our ideas for growth. But in the end, what killed us wasn’t bad management or lack of capital; it was an obsolete business model. You see, that publication depended on the passionate patronage of die-hard LSU fans starved for even the most insignificant details of things like football recruiting, and we were pretty good at reporting them.

What we quickly found, though, was that while we could generate a nice market for the information we disseminated it was the process of disseminating that information which was destroying our business. We created the first blog in the LSU market and distributed it via e-mail blast to over 8,000 paying subscribers, and every Sunday night we’d compile a magazine edition that we’d put online in PDF format – and see that PDF file be ravenously downloaded by our readership.

But on Monday, Tuesday and Wednesday what we’d find was that the value we created in our coverage of our subject matter was being destroyed by time delays in printing and mailing of the magazine that we were paying for. Printing and mailing were the largest costs associated with our business, and they were largely fixed. They were also chiefly responsible for the fact that up-to-date information we compiled on Sunday was largely out-of-date by the time many of our subscribers received their issues in the mail on Wednesday, Thursday or even Friday. Sometimes our out-of-state subscribers wouldn’t get their copies delivered until the following week; you can imagine the destruction of value arising from those subscribers not seeing the magazine previewing the Florida game, for example, until after that game was over.

And as the internet became more and more prevalent, this model became more and more unworkable. Our best subscribers started dropping off or going to an online-only subscription, because they were no longer interested in getting the print magazine on Wednesday when they’d already read the PDF file Monday morning and they were getting the e-mail blast of the blog – and what’s more, they were looking at message boards and chat rooms on LSU sports all day long to get their information. The decline came quickly and it became obvious we were unsustainable.

I’m not going to say because my experience in the publishing industry wasn’t ultimately a successful one that nobody can make it work; accuse me of arrogance if you want but I’m nowhere near THAT far gone. What I will say, though, is that my business ran aground on many of the same market conditions newspapers are dying of now. Printing is a huge expense – paper costs, and so does ink, and so does energy to run a press. Meanwhile the same information can be distributed nearly cost-free via the internet, and with things like iPhones and Blackberrys making it easy to surf the web from a cell phone there is less of a portability issue where online content is concerned. Online content also lends itself to enhancing information with video, audio and interactivity, making the old-fashioned newspaper article a dying journalistic form.

And furthermore, the internet has caused an explosion of access to the public by different purveyors of media. Would anybody have thought Drudge would be what he is 15 years ago? The Daily Kos? Redstate.com? Of course not. As a result, newspapers can’t claim the kind of monopoly on local advertising dollars they used to, and you’re seeing the model fail all over the country.

The bad business model of the newspaper industry isn’t the only problem; partisan hackery disguised as journalism is another major issue. Some 90 percent of the White House press corps describe themselves as Democrats, and if you read the New York Times or Washington Post or Los Angeles Times it’s quite obvious that what you’re getting is propaganda rather than objective journalism. The American people understand this and no longer see newspapers as the guardians of truth in their communities.

Ahhh, but the beneficiaries of that leftist bent won’t allow the death of the industry without a fight. Enter John Kerry, who is now championing a federal bailout of the newspaper industry from his perch in the United States Senate. Kerry’s latest hot air comes following previous noises toward bailouts from Democrats in Washington, including the idea of allowing them to function as non-profit entities or even through permanent state subsidies.

The American people can’t stand bailouts as a general rule; a Rasmussen poll released yesterday finds 59 percent of the population of the opinion that the bailouts already in effect were a bad idea and only 26 percent still support them. Add in the fact that newspaper household penetration is below 50 percent, with average newspaper circulation dropping by 3-6 percent every year, and the idea of bailing out newspapers looks like a colossal political loser.

Think about it this way – you get calls from the local paper all the time attempting to sell you a subscription, and you refuse to buy for whatever reason. Your refusal to purchase their product is then used as justification for the government to take your money in taxes and then redistribute it to the paper in the form of a bailout or a government subsidy, and not only are you out money you would otherwise be able to spend on patronizing other sources of information you might choose, you don’t even get the newspaper you refused to buy.

This is an idea so demonstrably bad that only an idiot, thief or Democrat politician would propose it. Little surprise we’ll have hearings on it next month.

(cross-posted at www.thehayride.com)