April 28, 2014

Read All About It

In a new book, journalism expert Penelope Muse Abernathy ’86 describes the crisis facing local newspapers in the digital age — and how they can see their way out.

Dan Rosen

In Saving Community Journalism: The Path to Profitability (University of North Carolina Press, 2014), Penelope Muse Abernathy ‘86, the Knight Chair of Journalism and Digital Media Economics at the University of North Carolina, recalls her first experience at a local newspaper. As a reporting intern at the Laurinburg Exchange in rural North Carolina in 1969, she observed that the paper’s second generation editor and publisher, John Henry Moore, would have coffee every morning at a nearby café, chat up locals, and return to the office with a healthy beat on the town’s comings and goings.

Today, as the landscape of journalism has shifted, that paper’s process is far different. The Laurinburg Exchange is no longer family-owned and operated, but instead run by an investment firm that owns nearly 100 other publications around the country. The local staff has been dwindled to a skeleton crew, which, as Abernathy writes, does “not have the time — nor the experience and perspective — to do the sort of analytical stories that residents so desperately need as they try to overcome the significant economic challenges they face.”

It’s a situation she sees playing out throughout the country, as community publications (which Abernathy defines broadly in the book, excluding only the 90 largest regional and national papers) struggle to adapt to the immense disruption of the digital age. Yet all is not lost, she says. In the edited conversation below, Abernathy, who has 30 years of experience in journalism, including executive positions at the Wall Street Journal and the New York Times, talks about what’s ahead.

In the book, you describe community newspapers as being as important to us as the major metros. Why are these smaller papers so valuable?

Because I had worked the last couple of decades with really large papers, I think everyone assumed I would focus my work on those big institutions. But there were several industry studies that drove home the importance of community newspapers for me. Some estimates say as much as 85 percent of the news that affects public policy, from local government all the way up to Washington, originates with these newspapers. For one thing, newspapers have traditionally had more reporters than broadcast outlets. As a result, they can assign reporters to specific beats and they can do investigative pieces that might take two or three months. Broadcasters generally don’t have the manpower to do that.

So in terms of politics, these investigations mean newspapers serve as government watchdogs. They also tend to set the agenda for the public policy debate. Then socially, they help us form our identity, linking us together geographically or by affiliation. And in terms of economics, there are really two vitally important roles that newspapers have historically played: as a marketplace, connecting local businesses to the community through ads; and more broadly, surfacing important economic issues.

How has the Internet disrupted the business model of newspapers?

For most newspapers, historically, 80 to 90 percent of their revenue comes from advertising. Newspapers have this very unique business model where revenue from_their readers doesn’t offset the cost of producing the paper. So they depend on advertisers to make up the difference. It’s really important that ad revenue continue to be a major component of the model going forward. Just think about it. How many subscribers do you have to get that pay you $200 a year versus one business that pays you 10 or 20 times that for an ad?

It’s not the first time newspapers have faced disruption. There was the introduction of radio and then TV. What makes the digital disruption different?

As Professor Eli Noam at the Business School has pointed out, with the TV and radio disruptions, if you were a community newspaper you retreated into your local market. If you think about radio and television, television especially, they tend to be located around major metro areas. The source for most of the information about the local community still came from community newspapers.

The web, though, has destroyed the barrier to entry. In the past, if you wanted to own a newspaper, you had to own a printing press. Not anymore. Anyone in these local communities can start a blog and build a following.

Do you feel like the community papers have been slow to react to this?

I don’t think they’ve had to react as quickly as the bigger papers. Whereas you had major metros wringing their hands as early as 2003, it wasn’t until 2008 that most community newspapers realized there’s a new economic normal. That’s because, for a while, the further out you got from the metro areas, the less digital connectivity there was.

But slowly, people even in rural regions began to expect that a newspaper was not going to be just a printed product, but that it would be available to them online and on their phones. It was a sort of slow trickle, but it’s kind of like the frog that’s in slowly boiling water. You don’t realize it until all of a sudden you go, “Ooh! That hurts!”

So what’s the way forward for them? Do you think it’s important that local newspapers continue to print a physical issue?

It’s dicey to predict the future, but I do not think the printed product will die completely. I do think the print edition will provide a much less significant portion of revenue for newspapers. What does this mean? It may mean that newspapers that are currently published three times a week go to once a week. It may be that newspapers that are published seven times a week are published three or four times.

For the last 20 years or so, maybe only three days a week were actually profitable for most newspapers. But those days were so profitable that newspapers could afford to publish the other days anyway. That’s not the case now. So newspapers have to cut their costs. They can then use the money they save in printing and distribution to reinvest in building a community across multiplemediums.

This will help the advertisers, too. There have been lots of studies that have shown that advertisers that use more than one medium increase the reach, exposure, and the efficiency of their ad because the same people are exposed to it multiple times on various mediums, and, of course, the more mediums you use, the more likely an ad is to be seen for the very first time by a new audience.

We’ve been working with a really neat independent paper in Vermont, helping them ascertain where their readers are getting their news. Vermont was notorious — even as recently as two or three years ago — for having rural pockets where, if you were there for the weekend, good luck with your cell phone. But that’s changed. The general manager tells a great story about encouraging someone who came in to buy a print ad to run the ad in multiple editions – both print and digital – instead. She said he came in two weeks later and could not believe the number of people who had seen it.

The critical thing for community newspapers is to stop thinking of themselves as print-only but instead as spanning multiple mediums. That’s generally the way their customers are consuming news today, even in the most remote areas of the country, so they have to keep up.

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