A Future Herald-Leader?

There have been several days lately when I have opened the front section of my Herald-Leader only to find that I am largely familiar with the world and national stories being reported. This is much less true for City & Region and subsequent sections – and I almost never read the ads. I wonder; are other readers having the same experience?

I don’t raise this question to be critical of the Herald-Leader. I’ll bet the same would be true if I subscribed to the Courier-Journal or any other daily from a mid-sized city. I just find that today’s technologies put me in touch with more real-time news than I can consume.

But newspapers are important. From America’s early days publicists have realized the power of our newspapers to influence public opinion. As David Sloan wrote in American Journalism, “Their main purpose was to have a forum to promote their party’s views…to win elections…and thus determine the nature that the political system would take.” As Secretary of State, Thomas Jefferson is said to have used state department funds to pay Philip Freneau, to edit a pro-Jefferson, anti-federalist bi-weekly newspaper called the National Gazette.

As late as 1870, 89% of urban daily newspapers were overtly affiliated with one party or another. But the conditions changed. Paper became cheaper, telegraph and new printing technologies came into being, cities grew and demand for news increased. These combined to make newspapers much cheaper to produce. The climate was right for new entrants into the profitable newspaper business.

Papers found that their editorial positions had to change to present both sides of the issues. Increasingly, cities had one newspaper and its readership was composed of liberals and conservatives. By 1920, fewer than half of the nation’s newspapers were politically affiliated. This journalistic model sought truth and valued honesty in a non-partisan manner; a neutral government watchdog.

That journalistic model is now under attack. Changes in technology have allowed politicians to use the press in ways that are new to 21st century citizens and increased political polarization has resulted. As the Scooter Libby trial has revealed, some of our watchdogs have been lured into government service. (For example: this from the Star-Tribune)

Today many newspapers seem to be struggling with a business model that just isn’t working. Take the mighty Wall Street Journal, for example, with their 1.75 million print subscribers. WSJ’s Deputy Washington Bureau Chief, David Wessel told an audience at the Yale School of Management last April that they maintain that number only by persistently discounting subscription rates. There is no growth.

But the on-line WSJ has 750,000 subscribers, an increase of eight percent over the prior year. Their growth market consists of college kids who are getting their news on-line. The problem is that they can’t charge advertisers as much for on-line readers as they can for the print readers. How can they continue to support the number of reporters it takes to produce reliable stories?

The unit of Dow Jones (WSJ’s parent company) that includes print and on-line editions of WSJ, Barrons and Market Watch had revenues over a billion dollars in 2005 - but still lost $2.5 million. They created their web site, hoping to move advertisers to the internet with them. The advertisers went - but most of them skipped WSJ and advertise with Google instead. Now Google has annual revenues four times that of Dow Jones.

The competition that once drove journalism toward unbiased reporting seems to be having the opposite effect today.

Harvard economists Sendhil Mullainathan and Andrei Shleifer argue that today’s competition forces newspapers to cater to the prejudices of their readers. As a result, news outlets seem to be returning to the kind of political niche marketing that existed in the days of pamphleteers. Whenever competitors can create so called “differences of opinion,” they do so to further divide the market and enhance profits.

So what’s a local newspaper to do? Is the most effective future business strategy for the Herald-Leader to be “in the middle;” fair and balanced in the traditional sense? Will competition reemerge in Lexington, perhaps in the form of an outrageous, youth-directed New York Post/Fox News-style on-line tabloid; meant to strip 30 percent from the Herald-Leader’s readership at low cost?

I suspect the answer for the Herald-Leader won’t come from its journalistic philosophy. It will more likely come from the local content itself. That’s the only thing the paper can (and must) produce better than anyone else - if it is to reinvent itself for the new century.