Political Provocateur

Megan McArdle has an interesting new assessment of the state of the media industry:

I think we’re witnessing the end of the newspaper business, full stop, not the end of the newspaper business as we know it.  The economics just aren’t there.  At some point, industries enter a death spiral:  too few consumers raises their average costs, meaning they eventually have to pass price increases onto their customers.  That drives more customers away.  Rinse and repeat …

For twenty years, newspapers have been trying to slow the process with increasingly desperate cost cutting, but almost all are at the end of that rope; they can’t cut their newsroom or production staff any further and still put out a newspaper.  There just aren’t enough customers who are willing to pay for their product what it costs to produce it.

The numbers seem to confirm something I’ve thought for a while:  we’re eventually going to end up with a few national papers, a la Britain, rather than local dailies.  The Wall Street Journal, the Washington Post, and the New York Times (sorry, conservatives!) are weathering the downturn better than most, and it’s not surprising:  business, politics, and national upper-middlebrow culture.  But in 25 years, will any of them still be printing their product on the pulped up remains of dead trees?  It doesn’t seem all that likely.

I think McArdle’s economic analysis of the newspaper industry itself is pretty spot-on. But I tend to take more of a non-pessimistic outlook. Newspapers as we know them are indeed declining, but I have confidence that the market will produce something else to take their place. Do I have any idea what it will be? No, I know that journalists will always be needed. News will always need to be disseminated. Does it really matter how it gets out there?

McArdle ends with this sad thought on the journalism profession:

Maybe there will be jobs, online.  But if so, more web outfits are going to have to get into the habit of paying salaries that will support an adult middle-class life.  Right now, a lot of web outfits tend to churn through twenty-somethings who are also building their resumes … but I’m not sure how well this works in a world where a job churning out blog copy for pennies a word is the last stop in a journalistic career, rather than the first.

Lovely.

::Enter new, pessimistic thoughts::