On the same day last week, I noticed a couple of news items that neatly sum up the state of modern media.
The first was an announcement that the Cleveland Plain Dealer will join other newspapers owned by Advance Publications (most notably the New Orleans Times-Picayune) in going to a three-day schedule for home delivery. Though the PD will continue to be sold on newsstands seven days a week, it will deliver a print version to homes only on Sunday and two other days of the week, starting later this summer.
The second item arrived at my home the same day in the pages of the New Yorker magazine. In a long article, Lizzie Widdecombe traces the rise of Vice, which began as an alternative magazine but now is a growing media company that has stamped its irreverent brand across a range of online, TV, print and video content.
The Plain Dealer, an old and respectable newspaper owned by one of America’s wealthiest families (the Newhouse clan), is cutting product and staff. Vice, a relatively young company that truly does merit the overused descriptor “edgy,” is feverishly extending its reach and growing its revenue. Widdicombe’s article includes several amusing accounts of visits to Vice headquarters by high-level, old-media executives (including Rupert Murdoch) hoping to decipher Vice’s formula for success.
Flashy, hip and irreverent is winning. Serious and traditional is losing. But what’s happening at far too many of the serious, traditional media outlets is suicide.
Cycle of destruction
Many traditional news outlets are still profitable. They’re just not as profitable as they once were, as profitable as their owners came to expect when they were virtually unchallenged monopolies. So their owners cut costs to keep profits up. That means cutting staff and degrading the product. As consumers see less value in the news products, they stop buying (or watching) them. That leads to lower revenue, which leads to more cuts, which leads to a self-perpetuating cycle of destruction.
There’s a scene in the movie “Citizen Kane” in which the young media tycoon Charles Foster Kane responds to a critic who points out that Kane’s newspaper lost a million dollars. You’re right, Kane replies: “And at the rate of a million dollars a year, I’ll have to close this place in 60 years.”
Donald and S.I. Newhouse have a combined net worth of more than $10 billion. They could guarantee the Plain Dealer’s future for generations. Or they could make the kind of massive investment today that would completely transform their media properties and give them a chance to compete with the Vices of the world.
It’s a shame that the fictional Charles Foster Kane was more interested in saving his struggling media property than our real-life media magnates appear to be in saving theirs.