We all knew this day would come. With the latest spinoff by Gannett of its extensive newspaper portfolio expected to be completed by the end of 2015, it now appears finance capital has written off the newspaper industry.
On some level this was inevitable given the movement of advertising from print to the web, but the real driver is not so much the loss of advertising revenue as the demand for higher profits from Wall Street.
Wall Street, not surprisingly, sees no value in serving local communities with news and has been pushing for media conglomerates like Gannett to drop their newspaper divisions in favor of TV and internet investments. Though local communities may not be the only ones to lose their newspapers as even the two largest national newspapers – The Wall Street Journal and New York Times – are having trouble hitting profit goals.
From David Carr at The New York Times:
The persistent financial demands of Wall Street have trumped the informational needs of Main Street. For decades, investors wanted newspaper companies to become bigger and diversify, so they bought more newspapers and developed television divisions. Now print is too much of a drag on earnings, so media companies are dividing back up and print is being kicked to the curb.
Setting aside the brave rhetoric — as one should — about the opportunity for a “renewed focus on print,” those stand-alone print companies are sailing into very tall waves. Even strong national newspapers like The Wall Street Journal and The New York Times are struggling to meet Wall Street’s demands for growth; the regional newspapers that make up most of the now-independent publishing divisions have a much grimmer outlook.
Regional newspapers are going to have an extremely difficult time staying afloat given their only real specialty is in providing news and information about local events and concerns – i.e. something large and lucrative brands have no interest in attaching their advertising dollars to.
So this is how America’s newspaper industry ends, not with a bang but with a sullen Wall Street earnings call?
Photo by Fletcher6 under Creative Commons license.