Personal Computing: Daily Newspapers Face Challenges from the Internet

Ever since the Internet began exploding in popularity in the mid-1990s, pundits have predicted that it would present serious challenges to daily newspapers. We're in the midst of seeing those challenges reach a crisis point.

The Internet is reducing daily newspaper profits and causing layoffs, and in a sinking economy, is leading to the demise of some print publications. Newspapers are facing the double whammy of shrinking ad revenue and shrinking readership.

The news has been grim:

• The New York Times' earnings for the third quarter of 2008 were less than half of what they were for the same period in 2007, and the paper is burdened with a huge debt, according to the company's latest 10-Q report. Silicon Alley Insider (www.alleyinsider.com) says the Times is "running on fumes."
• The Los Angeles Times, in its latest round of newsroom cuts, laid off another 75 staffers in October after laying off 150 newsroom workers over the summer.
• The Christian Science Monitor in October announced it will be transforming itself from a daily newspaper to a weekly one by next April while focusing more efforts on its Web site. According to a story in Business Week (www.businessweek.com), the paper is losing nearly $20 million a year and has seen its circulation shrink to 56,000 from a high of 223,000 in 1970.
• Every major newspaper in the country is losing circulation, according to the latest figures of the Audit Bureau of Circulations (www.accessabc.com), except USA Today and the Wall Street Journal, whose circulations are both flat. For the 507 newspapers as a whole that reported, daily circulation is down 4.6 percent from the same period a year ago. Of the 20 biggest papers, the biggest losers of subscribers were the Houston Chronicle, down 11.7 percent, and the Philadelphia Inquirer, down 11.1 percent.
• Newspaper circulation in the country as a whole is down more than 14 percent since 1970, despite the population increasing by 50 percent during this period, according to BuzzMachine (www.buzzmachine.com). Newspaper penetration is about half what it was then: 17 percent instead of 30 percent.

Things could get much worse, opines Tim Oren at his Due Diligence blog (www.due-diligence.typepad.com). He's calling what may happen the "Newspaper Crash of 2009."

For newspaper readers, the most pronounced consequences of the newspaper malaise are fewer articles available to read with their morning coffee, more news and feature stories by writers from the national news services instead of local reporters, and the loss of favorite columnists.

The flip side is the availability of more sources of news and opinion online, one reason for newspapers' problems. Newspapers' own Web sites are among those sites that are benefiting. Newspaper Web sites attracted a record number of visitors in the third quarter of 2008, a 15.8 percent increase over the same period a year ago, according to a recent Nielsen Online report (www.nielsen-online.com).

The most popular news sites, though, are not associated with newspapers. The top four in terms of the number of visitors, according to Nielsen's latest figures, are MSNBC (www.msnbc.msn.com), Yahoo News (news.yahoo.com), CNN (www.cnn.com), and AOL News (news.aol.com). The New York Times' Web site (www.nytimes.com) is fifth.

Unlike printed daily newspapers, most news sites are free, a major attraction, though some news sites follow the increasingly standardized Web model of offering additional services for a fee.

Reading news online, as anyone who has compared the two knows, has advantages as well as disadvantages to sitting down with a printed paper. One feature that has both plusses and minuses is personalization.

With the Internet, you can not only personalize