Reflections on Meyer's Vanishing Newspaper

A good product is an investment. A good newspaper will have to spend on recruiting good talent -- editors, reporters, photographers -- and paying them well. The news hole is where their output appears. This is a cost because the space could be otherwise devoted to revenue-generating advertising.
A good product will attract a circulation base which will in turn be the basis for attracting advertisers. Advertising accounts for 82% of newspaper revenues in the U.S.
There is a limit to how much advertising a newspaper can take. If it does not increase the number of pages, more ads means a smaller news hole. Readers will notice any significant reduction in the news hole.
Increasing the number of pages -- and retaining (or increasing) the amount of space devoted to editorial content -- may raise revenues, but will also increase production cost, particularly that of newsprint.
It is possible that overall, more ads may result in a net loss because of higher costs.
Meyer reports that some newspapers even resort to cutting circulation (hence, lower paper cost) in order to stay profitable.
A newcomer, with hardly any advertising, may employ sensationalism in order to attract readers, even if they do not qualify as quality readers. The newspaper can use this circulation base to bait advertisers. Since the readership is not a high quality, the newspaper may be limited to low-end advertisers.
A higher advertising revenue may prompt the newspaper to invest in better talent that will produce better material that will appeal to a better quality readership that in turn will attract the top advertisers.
It is also possible that big advertisers may approach the newspaper and demand better editorial quality appropriate to the products they advertise. This will explain why some nascent publications, like tabloids, employ racy photographs and sensationalized materials at first. As they mature, their standards will improve if they want to attract and keep better advertisers.
Some of today's tabloids that now call themselves respectable were once sleazy (there are varying degrees of sleaze) especially during their early years. Tempo and the People's tabloids today emulate prestige broadsheets. Bulgar and Abante are shedding some of their seedy qualities.

Murdoch: Great Journalism & Great Judgment

The Future of Newspapers: Moving Beyond Dead Trees
Speech delivered on 16 Nov. 2008 by Rupert Murdoch in the (Sir Richard) Boyer Lectures (in which he also talks about new technology). Read the complete transcript archived by the Australian Broadcasting Corp. or listen.

I'm no Murdoch, but conversations with newspaper publishers and editors, coupled with personal observations, have convinced me in recent years that the future of newspaper publishing is bleak, but on the other hand, the future of journalism is brighter than ever. Take it from Murdoch himself.

Highlights

• I believe that newspapers will reach new heights. In the 21st century, people are hungrier for information than ever before. And they have more sources of information than ever before.
• Readers want ... a source they can trust. That has always been the role of great newspapers in the past. And that role will make newspapers great in the future.
• Our real business isn't printing on dead trees. It's giving our readers great journalism and great judgment.
• In the coming decades, the printed versions of some newspapers will lose circulation. But if papers provide readers with news they can trust, we'll see gains in circulation—on our web pages, through our RSS feeds, in emails delivering customised news and advertising, to mobile phones.
• We are moving from news papers to news brands. ...There is a social and commercial value in delivering accurate news and information in a cheap and timely way. In this coming century, the form of delivery may change, but the potential audience for our content will multiply many times over.
• It's not newspapers that might become obsolete. It's some of the editors, reporters, and proprietors who are forgetting a newspaper's most precious asset: the bond with its readers.
  

Challenges

• Competition ... from new technology — especially the internet.
• The more serious challenge is the complacency and condescension that festers at the heart of some newsrooms. The complacency stems from having enjoyed a monopoly—and now finding they have to compete for an audience they once took for granted.
• The condescension that many show their readers is an even bigger problem. It takes no special genius to point out that if you are contemptuous of your customers, you are going to have a hard time getting them to buy your product.
  

Who decides what's news?

• It used to be that a handful of editors could decide what was news—and what was not. They acted as sort of demigods. If they ran a story, it became news. If they ignored an event, it never happened.
• Editors are losing this power. The internet, for example, provides access to thousands of new sources that cover things an editor might ignore. And if you aren't satisfied with that, you can start up your own blog and cover and comment on the news yourself.
• Instead of finding stories that are relevant to their readers' lives, papers run stories reflecting their own interests. Instead of writing for their audience, they are writing for their fellow journalists. And instead of commissioning stories that will gain them readers, some editors commission stories whose sole purpose is the quest for a prize.
  

Demand for news remains strong

• Readers want news as much as they ever did. Today The Times of London is read by a diverse global audience of 26 million people each month. That is an audience larger than the entire population of Australia. That single statistic tells you that there is a discerning audience for news.
• The operative word is discerning. To compete today, you can't offer the old one-size-fits-all approach to news.
• The defining digital trend in content is the increasing sophistication of search. You can already customise your news flow, whether by country, company or subject. A decade from now, the offerings will be even more sophisticated. You will be able to satisfy your unique interests and search for unique content.
• The (Wall Street) Journal is already the only US. newspaper that makes real money online. One reason for this is a growing global demand for business news and for accurate news. Integrity is not just a characteristic of our company, it is a selling point.
  

Three Tiers of Content

• News that we put online for free.
  
• For those who subscribe to wsj.com.
  
• A premium service, designed to give its customers the ability to customise high-end financial news and analysis from around the world.