Noting that newspapers are losing money on their print editions — and that many observers believe that print will eventually die — Alan Jacobs poses what seems to be the obvious question:
But if print is a money-loser — and I keep hearing that is is, for newspaper after newspaper — why not end it now, today, and go purely digital? Why shouldn’t newspapers around the world, or at least in the most internet-saturated parts of the world, just stop the presses — especially if they know they’ll have to do it anyway, and in the meantime the cash is draining away? What are the restraining factors? Habit and tradition? Powerful executives who have known the print world for so long that they can’t imagine life without it? The half-conscious feeling that paper and ink are real in ways that pixels and bits are not, and that if you only have pixels and bits you might as well be just a blogger, without a saleable product you can hold in your hand? This inquiring mind really, really wants to know.
Let me take a crack at the answer. There are a couple of fallacies underlying Jacobs’s question. First, the problem newspapers face is not that “print is a money loser”; it’s that the entire operation is a money-loser — ie, the costs are higher than the revenues. Second, from a production standpoint, you can’t easily separate the “print side” from the “online side.” You can, to a fair degree, separate print revenues (ads and subscriptions) from online revenues (ads and paywall fees); what you can’t separate are the costs. The major cost in a newspaper business is not the cost of printing and distributing the print edition; it’s the cost of producing content — the labor cost that goes into staff reporters, editors, photographers, etc., plus the cost of purchasing content from outside suppliers — and that content-production cost is largely shared between the print and online sides. So if you were to simply discontinue the print edition, you would end up destroying what is still your major source of revenues (print ads and subscriptions), but you wouldn’t do much to reduce your major source of costs. You’d end up sacrificing more revenues than costs, and your financial situation would go from bad to worse. The “cash drain” would turn into a flood. To put it another way: the print edition may well be losing money, but the cash it generates continues to subsidize the production of content for the online side.
So if you stop the presses, you have to do one of two things to avoid financial disaster: (a) figure out a way to make a whole lot more money from the online side or (b) fire a whole lot of people. And since nobody yet knows how to do (a), that means your only option is (b). And then, once you eviscerate your newsroom, you face a new conundrum: you’ve just destroyed your ability to produce good, distinctive content for your online edition. You’re hosed. That, as I see it, is why newspapers continue to be printed.
Discussions about the shift from print to online in the news business tend to focus on the demand side (new patterns of consumption) because that’s where the fun stuff is happening. But, as I’ve argued in the past — here and here — the problem newspapers face lies more on the supply side (old patterns of production). Until the supply problem is resolved at both the macro level (industrywide overcapacity in production) and the micro level (costs outpacing revenues in individual firms), the industry will struggle. And stopping the presses, at this point, will just compound the problem.