The Washington Post is, perhaps, the best known newspaper in the world. Take two young reporters, one battling editor – and one president of the United States, toppling into oblivion… Yes, the Post has a resounding, historic name: but, baby, look at it now.
Today’s Post has suddenly come to symbolise everything that’s contentious about daily journalism’s survival in the 21st century, and thus to pose two crucial questions. Is the Wall Street way a viable approach to running a newspaper these days? And how do you cope with the surge to news online: by charging customers, or giving your news away free?
In America, these battles are being fought out between the quasi-academic likes of the Columbia Journalism Review and Professor Clay Shirky of New York University, the supreme guru of internet ideology. But first catch up with some facts.
The Washington Post Company’s newspaper division has lost money in 13 of the last 15 quarters. Total loss over that period: $412m. The latest quarterly figures reveal a $23m loss and a 7% drop in revenue. Indeed, revenue has now slithered down in 20 of the last 22 quarterly returns. Last year’s annual figures show it at $314m, a third less than in 2006. Print advertising has shrivelled by 53% in that period. As for digital ad revenue, and supposed salvation, that’s down too – by 8% in the new returns. Amazingly, it too has slipped back over the past five years.
In short, everything’s shrinking: the money coming in, the future – and the newsroom, now getting by on around half its former staffing. The most recent cull has reduced the investigation team from seven to four. Or, as Ben Bradlee might say: “Well done, Woodward; so sorry, Bernstein …” For Deep Throat, read Superficial Swallow. It’s a stark and cautionary tale – at least for Ryan Chittum in the Columbia review. And he has two great beefs against the people – the management suits – he holds responsible.
One is the Wall Street beef – the way the overarching Post company, to which the news division only makes an 11% or so revenue contribution, has paid out $1.1 bn in dividends and share buyback schemes over the past four years of the credit crunch. This bigger Post, owner of a profitable education operation, could have used some or all of that money to keep the newspaper fed and watered. Instead, it has frittered it all away, he says – largely on trying to bolster a share price that has shrunk no matter what.
There’s problem number one. When Mammon fights the ghosts of Watergate, who wins? Mammon every time. The outside interests bought long ago in the cause of diversification and protecting the Post now come first. Can this be right? Whatever happened to public service?
As for problem number two, it’s perhaps the most vexing one of the digital age. Do you put up a paywall, like the New York Times? Or do you give your content away free, as the Post has chosen to do? And what, for that matter, does “free” mean, since the Post has pushed up its print cover price by 76% in the last five years, losing nearly 30% of its circulation in the process? “It’s a death wish,” says Chittum – and a particularly infuriating one since the New York Times, building its paywall, has shown how you can “bring in tens of millions of dollars, help shore up print sales and not hurt online ads”. Lay out Times and Post policies side by side over time, and there’s no contest.
Enter Professor Shirky, sweeping into the debate. “In its current configuration, the Post is basically screwed”. Of course propping up the share price is stupid. But the CJR is also right when it argues that Post management “should turn to their most loyal readers for income via a digital subscription service of the sort the New York Times has implemented”. He means bring in a paywall – an admission, in the context of this argument, much like George Osborne pulling Plan B out of his back pocket, shredding A for Austerity and eating the pieces. It’s a U-turn to boggle over.
Of course, in true Shirky fashion, he covers his retreat by claiming that papers are generally doomed unless entirely rethought – easy pickings for sites with targeted information, such as Homicide Watch in DC (or my earlier example in these columns, the political specialists of Politico). “Even successes like [the Times’s] don’t replace past losses,” he maintains. And maybe that’s true in the foggy world of digital news: but it doesn’t hide a change of American direction as more and more papers there follow the Times and erect slightly porous paywalls.
There’s a ripple of activity turning into a tide on the other side of the Atlantic. It doesn’t mean that such subscription policies are right in every case and every country. It doesn’t deal with the avalanche of paid-for apps for iPads and mobiles that are changing the terms of the “free or paid” debate anyway. It doesn’t cover the fragility of the Post’s print strategy – bowing out of competition as a US “national paper” but then cutting its local reporting staff to shreds. It doesn’t explain the sorry Post performance on digital ads, or its sudden collapse in Facebook referrals. It doesn’t fully encompass the news that digital ad growth on all US papers has slowed to a crawl, and even slipped back a more modest notch at the NYT.
Nevertheless, there are some stark alternatives here: and the fate of the Post is becoming a powerful symbol for American papers contemplating profound change. It may not yet show what does work. But – draining resources, pushing up prices, failing to turn unique visitors into cash and, frankly, producing an increasingly threadbare product – it does seem to show what doesn’t