Decline of Newspapers: Overview

Introduction

The newspaper industry is undergoing rapid and profound changes. Circulation has been declining since the 1990s, and regular newspaper readers are a shrinking percentage of the national population. Advertising revenue, which represents newspapers’ main source of funding, has dropped significantly in recent years, and publicly traded media-company stocks have plunged in value. As a result, newspaper owners have been forced to slash budgets and operate with vastly reduced staffs.

Observers of government and politics throughout history have noted that it is essential for citizens in a democracy to have access to trusted news sources. Since the nineteenth century, newspapers have been the primary means by which most people find out about current events. Even after the introduction of broadcast news technologies such as television and radio, newspapers remained the most important news media. However, the advent of the Internet completely changed the way the public gains access to and shares information. Today, most people throughout the world are accessing news information online, and newspapers have taken a backseat to free sources of electronic data that are available instantaneously, twenty-four hours a day.

Some media analysts have expressed concern that the decline of the newspaper will result in an uninformed citizenry and could even lead to a crisis of democracy. Others are hopeful about the future of journalism, contending that the Internet will provide new opportunities for the dissemination of news. They argue that the Internet has allowed for the creation of media genres and venues that could have never evolved from old-fashioned, print-based media.

Understanding the Discussion

Circulation: The standard measure of newspaper readership; refers to the number of copies distributed per edition of a paper.

Classified advertising: Smaller, generally text-only advertising, organized by the type of item or service offered.

Display advertising: Larger, more image-rich advertising; the source of most of a newspaper’s revenue.

Distribution: A general term for the way that newspapers are sent out to consumers.

Household penetration: A method of measuring newspaper readership, calculated by dividing a newspaper’s total circulation by the number of households in its distribution area.

Investigative journalism: A style of reporting that seeks to uncover secret or unknown information, often dealing with controversial or politically sensitive topics.

Typesetting: The way that newspaper content is physically printed on the paper.

History

News journalism has always been closely associated with democracy. Since democracy rests on the decisions of voters, it is essential that citizens have access to high-quality information about issues and candidates. Thomas Jefferson asserted that any threats to journalism should be considered threats to the future of democracy. Throughout modern history, newspapers have been the most important source of information for citizens. Today, however, the majority of people receive their news from the Internet, and recent developments in the newspaper industry have raised questions about its sustainability as a medium.

Prior to the 1950s, most newspapers were small, family-owned businesses. They were profit-minded businesses, but they were also considered to be important pillars of their local communities, with substantial power to shape opinions and sway elections. The first wave of change to the newspaper industry came in the 1960s and 1970s, when ownership shifted to large, publicly traded companies. This was partly a result of the introduction of computerized typesetting technology, which was very expensive and would put an insurmountable financial burden on smaller newspaper companies. At the same time, television was beginning to emerge as a source of competition for advertising revenue. Newspaper publishers without large cash reserves worried about the financial future of their products, and large corporations took advantage of the opportunities created by new technological developments.

Since many of these large companies were publicly traded, they depended on constant growth to keep the price of their stocks high. Therefore, the pace of acquiring new papers rapidly increased. By the end of the 1970s, there were relatively few independently owned newspapers remaining. Many media critics blamed this change in ownership structure for weakening the newspaper industry, arguing that investors were interested only in short-term profits rather than the long-term health of the newspaper medium.

Newspapers were still quite profitable, but it became clear that competition from television would have an effect on future earnings. Now owned by corporations rather than independent people, newspapers reacted to these anticipated losses by making budget cuts. Reporting and editorial departments were downsized and consolidated. Critics contend that the quality of newspaper journalism suffered due to these cuts.

Newspaper readership started a steep decline in the 1980s and 1990s. Household penetration fell significantly, decreasing from a high of 130 percent (due to households reading multiple newspapers) to 54 percent by 2001. Total circulation also fell in the same period, down about 10 percent from the early 1990s. The emerging popularity of the Internet in the mid-1990s further undermined newspaper readership, and online venues for classified advertising, such as Craigslist, dealt a significant blow to newspapers’ advertising revenue.

The sharp decline of newspaper profits continued in the early 2000s. An industry that used to collect 20 percent annual profits faced a new reality where 6 percent margins were normal. Dwindling profits led owners to raise subscription rates and cover prices and reduce circulation, creating a situation that many analysts deemed unsustainable.

The global financial crisis that began in 2008 resulted in further declines in advertising revenue. For instance, the New York Times reported a 51 percent drop in income in the third quarter of 2008, and Gannett, the largest newspaper company in the United States, announced a 60-percent decline in first-quarter 2009 profits. Investors, including the influential Warren Buffett, became pessimistic about the future of the newspaper business. Some analysts predicted that the newspaper industry would not survive for more than a few decades in its current form, leading many to predict the end of newspaper journalism. Others have considered alternative funding models and formats for newspapers, including charitable funding, and a number of grants for investigative journalism were established.

Another option was for newspaper companies to fully embrace the Internet. Most if not all newspapers now maintain corresponding websites, which are less expensive to produce than print products and generally contain the same information as the newspapers themselves or even more, as well as archives of old articles or full back issues. In addition, increased interactivity and the use of video, audio, and user commentary combine the appeal of print and broadcast journalism and attract display advertising from new clients.

Some analysts predict that the decline of the traditional newspaper industry will be harmful to quality journalism and the public’s access to information, while others anticipate that new funding models could actually improve them. They argue that the industry’s corporate alignment seriously hinders reporting, while journalists less beholden to advertising revenue would be able to pursue stories that might have previously been considered off-limits. They note that the Internet can be considered a democratizing technology, allowing a wider variety of journalistic voices to reach global audiences.

Decline of Newspapers Today

It is clear that the newspaper industry is in a time of profound change. Newspaper profitability appears to be experiencing an irreversible decline, and the industry has had to adjust its business model or perish. Electronic newspaper subscriptions have become a standard option, saving newspaper companies significant sums of money by lessening the need for cumbersome physical distribution systems. Some papers have opted to migrate to an online-only format after the failure of their print incarnations, while others have been launched as online-only products from the start.

Many newspapers have “paywalls” on their websites, which prevent users from accessing some or all articles without a paid subscription. A hard paywall is one that blocks all access, while a soft paywall limits access partially but not completely; unpaid users might be allowed to access a certain number of articles per month, or a small amount of material might be designated free content. The Wall Street Journal was among the first to adopt this technology, establishing a hard paywall as early as 1997, while the New York Times instituted a soft paywall in 2011. However, for every newspaper website that has successfully instituted a paywall without a significant drop in readership, many more have failed, and many media critics have expressed doubt that even a successful paywall would be sufficient to offset the loss of revenue from print advertising.

Another potential way for newspapers to generate online revenue is through application programming interfaces, or APIs, which are interfaces that allow outside entities, such as news aggregators or specialized software applications, to access and use a website’s content. The Guardian, a national British newspaper, has been openly critical of paywalls, opting instead to offer different levels of API access, including free access for personal or noncommercial use, a commercial license that allows access in exchange for advertising, and customized access for software or web-service developers in exchange for a share of the software or service’s revenue.

According to the Pew Research Center, in 2022 the estimated total US daily newspaper circulation—print and digital combined—was 20.9 million for both weekdays and Sundays, down from 28.6 million for weekdays and 30.8 million for Sundays in 2018.

Small newspapers have been hit particularly hard by the decline in readership, with the Poynter Institute for Media Studies reporting that more than two local newspapers closed per week in 2023. Additionally, the Medill School of Journalism at Northwestern University found that the US has lost almost 2,900 newspapers and 43,000 journalists between 2005 and 2023. At the same time, the Pew Research Center found that out of roughly 12,000 polled journalists, 57 percent were either extremely concerned or very concerned about the future of press freedoms in the US, while Reporters Without Borders ranked the US forty-fifth in the world in terms of press freedom in 2023.

There is still much uncertainty about how the Internet will continue to affect the future of journalism. Since newspapers remain a primary source of information on current events, and newspaper companies are the primary employers of print journalists, it is quite possible to argue that changes in the print-media landscape present a serious threat to journalism. Television may benefit somewhat if newspapers are no longer printed, but television news programs have also been declining in viewers and are considered even more tainted by corporate interests, especially among younger audiences. Although there are legitimate reasons to be concerned about the downfall of the printed newspaper product, it is likely that in the long term, Internet-based newspapers will largely replace them.

These essays and any opinions, information or representations contained therein are the creation of the particular author and do not necessarily reflect the opinion of EBSCO Information Services.

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