False Profits: continuing speculation on the future of newspapers

This Slate piece by Jack Shafer cites continued expectations for twenty percent profit margins in the newspaper industry as having destructive effects on the quality of journalism and future web-based development – which is where the growth is. These historically high expectations are the result of conditions that no longer exist; as technology eliminates monopoly.

Last fall, former Lexington Herald-Leader and Los Angeles Times Editor John Carroll decried these conditions on NewsHour. He discussed corporate pressure for profits, and conflicts between those who see themselves as serving the shareholders and those who see themselves serving the reader. “I think every good editor has a point which he has to define for himself, at which he must quit or resist, rather than damage the paper further.” Carroll left the LA Times last year and is now the Knight visiting lecturer at the Shorenstein Center on the Press, Politics and Public Policy at Harvard University.

In this era of publicly owned newspaper chains, money has overshadowed all else. And obligations to journalism, obligations to the community have fallen by the wayside to a considerable extent, and that is really the tension that's causing this problem. If owners reduced expectations to 10 percent profit margins, Carroll said, circulation would probably start growing. "And we would be able to invest very heavily in the Web, which is crucial to the paper's future," Carroll said. "At a 20 percent margin, I feel strongly that we are cashing in the paper's future in favor of current earnings."

“My topic is an urgent one: nothing less than the fate of journalism,” said Carroll. “The economic underpinnings of our craft are eroding. At the same time, the Web is offering rich opportunities for journalism in new forms. And, in the current scramble for market share, the work of the principled journalist is being lost in a din of marketing and propaganda...As a matter of public policy, a self-governing nation simply cannot do without real journalism...”