The end of the monopoly era in newspapers
The newspaper business has become far more competitive in recent years, but not too long ago, most newspapers were flush with cash:
“So flush,” John Podhoretz told the Shorenstein Center, describing what it was like to work for Time in the 1980s, “that the first week I was there, the World section had a farewell lunch for a writer who was being sent to Paris to serve as bureau chief… at Lutèce, the most expensive restaurant in Manhattan, for 50 people. So flush that if you stayed past 8, you could take a limousine home… and take it anywhere, including to the Hamptons if you had weekend plans there. So flush that if a writer who lived, say, in suburban Connecticut, stayed late writing his article that week, he could stay in town at a hotel of his choice.”
The idea that print publications might need to reinvent themselves was, to put it mildly, not top of mind for most journalists in the early 1980s. Newspapers continued posting double-digit returns on equity and maintained “extremely profitable, quasi-monopoly status” for more than two decades after the dawn of cable television, according to a 2010 Congressional Research Service report about how the news industry has changed.
There is a lot more to the Atlantic piece, which you should check out, but the discussion reminds me of a Larry Downes’ piece from some time back on innovation, or lack thereof, at newspapers. As he says,
Part of the problem is that in the United States the newspaper business has never exactly been run on a profit-maximizing model. Like the Times, many papers are still family-owned and operated; many lose money for decades. The publication’s mission — social, political, cultural — often takes precedence over business decisions, even when those decisions might help to advance the mission to a greater audience at a lower price.
Of course there is variability in the marketplace, but it does seem like many newspapers had few problems keeping payroll in the period before the Internet. Larry’s larger point is still valid. For years, news organizations faced little competition, only to now be faced with leaner alternatives in recent times. Reading the histories of the newspaper industry leads to the belief that the writers had far greater distance from their consumers. In the academy and especially in the political economy of media crowd, this distance is lauded, because it allows for a gatekeeper role and helps to grease the wheels of democracy.