Why did newspapers fail to innovate during the digital transformation?
Updated: Sep 24, 2019
Don Henninger, former managing editor of the Arizona Republic, remembers the buzz circulating throughout the news industry when the Internet caught on with the public. The tension, apprehension, doubt and excitement were palpable.
He recalled jetting across the country to speak with others in the news industry about the new technology and what it might mean for newspapers, and attending think tanks and other meetings where experts shared research on how to best leverage it.
There was a lot of skepticism over whether or not the Internet would last, Henninger pointed out. A lot of people thought it was just a passing fad and in the end, according to Henninger, leaders in the newspaper industry failed to innovate.
“The industry is a shadow of its former self now largely because I think they failed to vantage, capture and be on the leading edge of what technology was offering to the industry,” he explained. “They fell asleep at the wheel.”
The public gained access to the Internet in 1991, although the technology was invented several decades prior.
At this point newspapers and the industry itself were thriving. There were approximately 458,000 people employed in the newspaper publishing industry in June 1990, according to statistics compiled by the United States Bureau of Labor Statistics. As of 2016, that number shrank to around 183,000 — a decline of nearly 60 percent.
Paper circulation also took a hit. Weekly circulation was at an all time high in 1990 with 62,635,000 newspapers delivered each Sunday. As of 2018, this number has more than halved wracking in at 30,817,351 copies, according to the Pew Research Center.
Henninger said he sometimes wonders how different things might be now had someone like Steve Jobs been involved in the news industry back in the 90s to ease the transition into the digital era.
He speculated that many people in the industry were almost “fat and lazy” about the Internet’s promises. As newspapers were highly successful and extremely profitable, many publishers delayed innovating and evolving with the new technology.
By the time they woke up and realized the Internet was here to stay, the opportunity to lead innovation had passed them by, Henninger said, it was a pretty shortsighted view, frankly.
“What happens sometimes is people, industries, businesses react, often times too late, when they finally hit a crisis point,” he explained, pointing out that staff cuts, the closure of local papers, and the abundance of alternative news sources popping up online have created urgency within the newspaper industry. “As long as newspapers were still profitable and making a ton of money and the profit margins were solid there was no real motivation to worry about the future.”
It also didn’t help that most news sources almost universally uploaded their content online for free, Henninger said, adding that the public has struggled to adjust to a subscription based model after coming to expect free content.
“That’s the model that I think will make us successful and sustainable moving forward. Sure, there’s been a lot of blood on the floor getting there with the way we’ve downsized, jobs have been limited all across the board and newspapers for the most part are shells of their former selves,” he said.
The problem really came down to the fact that there weren’t really any trailblazers in the news industry. People were trying things, but nothing was going anywhere, Henninger recalled.
The industry is now playing catch up and while he clarified that he thinks doing so is doable, it’s nevertheless unfortunate to have to do this when the news industry could have been leaders during the digital transformation.
Having now spent the past 37 years immersed in the news industry, Henninger said he still has hope for its future.
“The premise comes back to ‘what is the value of journalism in society?’ I think there’s enough people who understand how valuable it is to keep it alive in whatever format it takes. I think newspapers are figuring out how to do that,” he said.
Glen Feighery, an associate communications professor at the University of Utah and former reporter for the Reno Gazette-Journal, recalled never questioning why his publishers were putting their paper’s content online for free.
“I’d been told that the website was making money on its own, which I figured was OK,” Feighery wrote in an email to a World Table researcher when asked why newspapers failed to innovate during the digital transformation.
Feighery said outlets like Craig’s List destroyed that notion by “providing online classified without charge.” At the same time, companies like Amazon encouraged people to shop online which hurt the newspaper industry because the public became less influenced by advertising in newspapers. The advertisers themselves were less inclined to put money into the declining news industry.
“When newspapers lost their classifieds and display advertising, they lost their financial foundation. At the same time, they failed to generate online revenue. The result has been dozens of newspaper closures and thousands of layoffs,” Feighery said.
Leaders in the news industry weren’t blind to the Internet’s impact, but a series of missed opportunities, underestimation and poor information impacted many officials' ability to innovate and adapt.
‘Merchants of Truth: The Business of News and the Fight for Facts,’ a book written by The New York Times former Executive Editor Jill Abramson, chronicles media companies The Washington Post, BuzzFeed, VICE Media and The New York Times journey throughout the past decade — largely revolving around changes brought about by the digital era.
Abransom writes that in 1992, officials at the Washington Post compiled a report urging the company to create an electronic product as the memo pointed out that “the Post ought to be in the forefront of this.”
However, according to Abramson, administration brushed over the memo without giving it proper attention until later, when the Internet was already in full swing.
She also wrote that the Washington Post missed out on a ten-per-cent investment in Facebook in 2005. The returns, she pointed out, would have “floated the newspaper for decades.”
One year later, according to Abramson, officials promptly shut down a proposal to kick off a new Web site pitched by two of their “best political reporters.” In the end the reporters left the Washington Post to found their idea which came to be known as Politico. Politico stands apart from the majority of news organizations in that it is entirely online, has no paywall, very few advertisements and makes revenue by utilizing a small group of subscribers.
As for The New York Times, Abramson wrote that they, similarly, missed out on an early chance to invest in Google.
Leaders at London based newspaper The Guardian created a media lab to investigate the possibility of branching out online in 1996, though according to Abramson, ultimately concluding that the Guardian’s priority “was, and should continue to be print.”
These missteps indicate that there were people within the news industry aware of what the Internet might mean for journalism’s future — however their foresight was largely stunted when superiors brushed concerns aside.
Ultimately, many journalists, publishers and other important players within the news industry are now playing catch up, and while this is daunting to some, people like Henninger and Abramson said they believe it is possible.
Abramson cited Utah news company the Deseret News as an example and pinpointed Clark Gilbert, CEO of Deseret News Publishing Company and Deseret Digital Media from 2010-2015, as the source of many of the paper’s successful changes.
According to Abramson, Gilbert noticed the declining numbers and moved the Deseret News into the Triad Center to converge newsrooms with KSL-TV, KSL Newsradio and Deseret Digital Media. This enabled KSL and the Deseret News to share coverage by sending one reporter to an event, thus utilizing strapped resources and saving unnecessary costs.
Henninger pointed out companies like The World Table who are researching alternative ways news sources can be profitable. He stressed these organization’s importance and acknowledged that their research and other’s innovation is vital to journalism’s future, something he and others in and out of the industry believe wholeheartedly — that journalism is worth saving.