Newspapers yesterday, today & tomorrow.

Author:Schachter, Harvey

Harvey Schachter is a freelance journalist, lecturer on the media, and former editor of The Kingston Whig-Standard. Some of the research for this paper was conducted while he was a Skelton-Clark fellow at Queen's University for the 1995-96 academic year.

Conrad Black and his Nepoleonic zeal drew attention to newspapers with his purchase last year of Southam Inc. and a swath of Thomson newspapers. But the clamour he provoked may have diverted us from the real difficulties faced by Canadian newspapers. Anyone concerned about public policy should be concerned about newspapers. But they should be looking beyond Black to more fundamental changes in the industry--changes that offer both peril and promise for the future.

Michael Crichton, who attracts more readers than all of Black's newspapers put together, appeared a few years ago before the Washington Press Gallery to talk about the American media. He opened by noting that he was an expert on dinosaurs, having written a trilogy on the subject--his novels on Jurassic Park, Japanese-U.S. trade relations, and sexual harassment. (1)

"But I would like to discuss another dinosaur, one that may be on the road to extinction. I am referring to the American media. And I use the term extinction literally. To my mind, it is likely that what we now understand as the mass media will be gone within ten years. Vanished, without a trace."

It's easy to dismiss his statement as heperbole. But Crichton has succeeded by divining the sensitive issues we face and capitalizing on them with gripping novels. And by zeroing in on the American media--walking into the den of the establishment and telling the Washington Press Gallery that The New York Times, CBS and the lot might soon be extinct--he has again found a sensitive spot.

Extinction is unlikely for the entire media, of course, but it's at least possible for most newspapers and quite likely for many. And the rest of the media will be subject to massive change in the years ahead, as people flock to new information technologies and delivery systems yet to be built.

You can't predict the future by extrapolating from the past, but, before looking at that future, it might be helpful to scrutinize the changes that have hammered newspapers. (2) Newspapers have traditionally been the medium for daily, intelligent discussion and dissemination of public issues and news. If they degenerate or disappear, public policy could suffer.

The journey begins a generation ago, in 1981, which happens to be the year of Tom Kent's Royal Commission on Newspapers (Canadian Government Publishing Centre, 1981) and the year before USA Today was launched. The Commission told us what we suspected: newspapers were making big bucks. Publishers had been complaining about looming threats to their empires, but their profits were, in fact, the envy of most industries. Indeed, newspaper publishers benchmarked themselves by how much of the sales dollar they retained in profits, rather than by the more traditional return on investment. Papers in the Thomson chain routinely were keeping 30 to 40 cents of every dollar of revenue. The socalled high-end papers, devoted to serving the public with intelligent material even if that meant some economic sacrifice, were still pulling in 15 to 25 cents on the dollar. Supermarkets, on the other hand, hoped for a penny or two.

Your daily newspaper in 1981 was fat--thicker and bigger than today's. It was also crammed with what is known as ROP (run-of-the-press) advertising. Advertising didn't drop out of the paper when you opened it; it was part of the newspaper, jammed beside the news and features. Companies paid the newspaper to both print and deliver the ad.

There were fewer advertising flyers then and they tended to be distributed by community papers. That was fine with newspaper publishers, because advertisers opting for flyers paid newspapers only for distribution, a much smaller fee than the cost of ROP. As well, advertisers sometimes preferred delivery to a small, demographically or geographically selected slice of the population or, more typically, to every household in a community. Neither of those demands could be easily met by daily newspapers, which used carriers, stores and boxes to distribute papers to paying customers--often a very different subset of the community. Newspapers had enough delivery headaches without taking on the migraine of flyers.

Moreover, there was in those days a great deal of ROP advertising. Wednesday's newspaper was jammed with ads from the big supermarket chains, often two or more pages. Department stores were huge advertisers every day, with page after page offering everything from refrigerators to batteries.

Advertising (about 75 percent of revenue) and circulation (about 25 percent) were viewed as mutually dependent: advertisers demanded healthy circulation for their ads; at the same time, advertising kept the cost of a daily newspaper low, which, in turn, helped to boost circulation.

Although newspapers were losing ground to television, they were still seen as an excellent medium for ads. Circulation was reasonably solid, as most people were still buying papers daily. Baby boomers, not yet preoccupied with children, were readers; although raised on television, that critical generation seemed to have the newspaper habit.

Despite the rosy picture, fears about the future of newspapers were bandied about. Ted Turner, the Michael Crichton of his day, warned in 1981 that "Newspapers as we know them will be gone within the next ten years. Unfortunately, newspapers are becoming technologically obsolete."

The Kent Commission was also concerned about the future of newspapers, particularly with respect to the impact of chains. The Commission feared that Southam--seen as the country's good chain--was vulnerable to a takeover by Thomson, for example, which could increase profits by reducing editorial content. Southam owned most of the big-city, higher-quality newspapers while Thomson concentrated on small-town newspapers that were virtually advertising flyers with a touch of leavening local news. It's worth stressing, however, that Southam also owned a string of small-town newspapers that weren't appreciably different from their Thomson counterparts.

The Commission was also troubled by:

* cross-ownership within the media; for example, when a newspaper controls television and/or radio in its area;

* cross-ownership from outside the media; for example, when a conglomerate that includes major advertisers also owns newspapers, which could threaten freedom of information if advertising were directed to its own newspapers and news coverage were made to conform to corporate interests;

* the general threat to diversity of information posed by chain ownership, with its potential for sameness and limited voices.

The Commission infuriated publishers by recommending that editors be given the security of a five-year contract and that they report to a community panel, to insulate them--and news coverage--from the commercial or ideological pressures of newspaper owners. The Commission also recommended a tax scheme which would reward newspapers that spent a greater than average proportion of their budget on editorial content, thus making higher-quality newspapers less vulnerable to takeover by chains hoping to increase profits by savaging editorial content.

The most powerful influence over news content...

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