In another sign of the decline of traditional newspapers, The New York Times announced that they will be combining the news staffs of their online and print divisions. While the media largely ignore this announcement the ramifications are potentially huge for the future of the newspaper industry.
The Times facing stagnant readership and flat to declining ad revenues isn’t the only paper facing a challenge. The Washington Post for example just announced a daily circulation decline of 4% in the first six months of the year along with a 1% increase in revenue in the newspaper division. Compare that with a 21% jump in revenues in their online division and you can see where future growth will come from for the Post. Yet the Post said they had no current plans to merge their newsrooms.
The problem is that while online revenue and usage are growing it really isn’t a profit center for the papers. There is a heavy cost to provide readers with the “free” content. To date only the Wall Street Journal has been able to successfully charge for online content and has attracted 744,000 subscribers at last count who are paying from $39-$79 per year depending on whether or not they subscribe to the print edition. Thanks largely to the purchase of MarketWatch in January by Journal parent Dow Jones & Co. the online segment now represents one half of the print revenue. It doesn’t hurt that the Journal has a virtual lock on financial news and information.
It is inevitable that other papers will try to emulate the Journal model in some form and that the days of free content are limited as the newspapers continue to struggle with their print future.