By Sean Stillmaker in News on Nov 27, 2010 5:45PM
There was a time when newspapers would come out twice a day, sometimes even more if there was a breaking story with the paper boy shouting, “Extra, Extra.” The paper boys have long faded and so did making money with the news. But there are still daily papers and newsstands that try to sell them. In the financial district Dahyabhai Patel has been operating his stand for four years and has seen a steady decline ever since.
Patel’s newsstand, at 105 W. Adams St., provides a neighborhood feel to the looming skyscrapers, but the neighbors don’t have time for archaic devices. On average he sells 10 newspapers and three magazines a day earning only a couple dollars in profit, a journalism student at Northwestern University’s Medill reports.
Since the Internet, newspapers have seen their demise. The decrease in daily circulation slowed this quarter to only five percent compared to the same period in 2009 when it was 10.6 percent. Magazines have seen a steady 10 percent decrease yearly since 2007. Only two of the top 25 newspapers showed year-over-year gains, the Wall Street Journal and the Dallas Morning News. Magazine subscriptions increased for Off Road Adventures and American Rifleman.
The quality of journalism or the role of the job has not changed (some would argue otherwise), but the biggest challenge we face is survival -- how do you fund our job? For the last century advertising has funded journalism. The Internet and social media has enabled advertisers to go directly after their targets, thus striving away from newspaper advertising. Craigslist killed the classifieds and Groupon is killing coupons.
In the second quarter ad revenue was at $6.44 billion, the lowest total since 1985, but online advertising increased by five percent. Charging for news online is too radical and cannot work universally (how would the Smithville Herald survive?). But the Wall Street Journal is doing it, and the New York Times starts charging online Jan. 2011.
Are e-readers with monthly subscription rates for newspapers going to take off? A big help on this front was the recent profit reversal with Amazon. Starting Dec. 1, newspapers will get 70 percent of revenue from Kindle subscriptions -- previously they were receiving only 30 percent.
The extinction of newspapers as a daily is inevitable. Until they realize this Internet thing is for real, a year subscription for the Sun Times is $91 and the Tribune is $143.