This week’s news that The Wall Street Journal is hiking its cover price from $1.50 to $2.00 — just a year after raising it from $1 to $1.50 — is further evidence of the desperation of newspaper publishers in response to the unravelling economics of their medium.
Under enormous pressure to prop up their bottom lines, newspapers in most developed countries are resorting to a cocktail of short-term measures that could have a quite devastating medium-term impact on the quality of their editorial franchises:
- Increase the cover price — which generates more revenue in the short term but inevitably leads to lower circulation and visibility.
- Print fewer newspapers (because there are fewer buyers) — which saves money on printing and newsprint.
- Employ fewer journalists — which saves money on salaries and expenses but inevitably leads to a decline in editorial breadth and quality.
- Cut other editorial costs (foreign bureaus, Canberra staff, travel, research, freelances) — same effect as above.
- Produce fewer pages — which saves money on newsprint but results in a diminished service to readers.
The result of this potent cocktail is that in order to meet short-term shareholder demands newspapers are steadily reinventing themselves as high-priced niche printed products, precisely at the same time as the internet is becoming the most powerful low-priced niche content platform in history.
All this is happening at the same time as chilly economic winds are buffetting newspaper advertising revenues, classified advertising continues to migrate to the internet and — not surprisingly in view of all this turbulence — investor sentiment about newspapers is decimating their share prices.
Becoming a more niched product is less of a problem for a specialist paper like The Wall Street Journal, because that’s essentially what it is already, but for general interest broadsheet newspapers the road to nichdom can very quickly turn into a narrow laneway.