Newspapers must join other conglomerates to survive

In the Feb. 5 issue of Time magazine, former managing editor Walter Isaacson outlined his plan for print media to survive the economic recession. In "How to Save Your Newspaper," Isaacson argued that printed media must charge for online content if they are to continue.

Isaacson is wrong — the time when readers would pay for content has come and gone — but government action (or inaction, rather) could do a lot to save newspapers.

Media outlets embraced the Internet because publication was cheap and could still be supported by ad revenue. But as more people got online, they began consuming and demanding richer content. Newspapers were under increased pressure to provide additional content in the form of blogs, streaming video and other interactive features to forge an online presence that could continue competing. They could handle this, for the most part, because the increase in Web traffic corresponded with increased Internet ad revenue.

Newspapers went over the edge in 2008 — the first year that more people got their news from online sources than in printed newspapers. Online ad revenue suffered with the economy as free news Web sites that had been operating with a relatively small profit margin suddenly became huge money pits. This was a result of both advertisers not being able to afford ads and struggling consumers looking for ways to save money.

The effect on the newspaper industry has been catastrophic. The 150-year-old Rocky Mountain News just went bankrupt and printed its last issue on Feb. 27. Newspapers in San Francisco and Seattle are facing massive layoffs, and even the New York Times is more than a billion dollars in debt.

As a solution to all this, Issacson suggests newspapers should charge for online content. You should have to pay a fee before reading a news story, he says. In his article, he points to the recent success of iTunes and proposes a similar model.

This idea might sound good in theory, but it's important to remember that iTunes works because of its integration with the iPod and the significant deterrents against piracy. Online news has neither of these advantages. Even the pretext of mandatory free registration to use a site is usually enough to send me looking elsewhere for a news article. If some papers continue to offer for free what others are charging for, readers will gravitate to the free sites. Unless the news industry forms some sort of OPEC-like cartel to protect itself, pay-for-content models simply don't work.

Instead, media companies should pursue media conglomeration strategies. Newspapers should join forces with television, radio and other media companies since broadcast media's profits can carry print media and make both better.

Liberals like President Barack Obama are opposed to such consolidation because they claim that it limits local news coverage. They want to enact policies to prevent consolidation. But community journalism has already migrated to the Internet. In Kansas, for instance, a few free blogs offer better and more thorough political coverage than any of the local publications. This trend will only continue in the future.

Media consolidation offers the best hope for the survival of print journalism. The result will be a better quality publication, industry financial stability and incentive for people to use the Internet to cover local events themselves.