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SPRING 2013
Adviser Update
Can paywalls solve newspaper’s woes?
By Richard J. Levine
F
or many years, one of my
favorite publications has
been the Economist, the
respected British weekly of
global political and business
news and opinion.
The section on the United
States provides a thoughtful
look at America from abroad.
But what I find most valuable
is the Economist’s penetrating
analysis of a broad array of
complex issues early and
often. Thus, the Economist’s
article on the ailing newspaper
industry late last year was
welcome reading for anyone
concerned about the future of
the business and journalism.
“Ever since 2006, when
the Economist asked on its
cover who had ‘killed the
newspaper,’ the industry’s
pains have only intensified,”
the Economist wrote.
“Advertising has plunged.
Readers have kept moving
online. Revenues of
newspapers continued to fall,
dropping to $34 billion last
year in America—only about
half of what they were in 2000.
Yet things have started to look
a bit less grim, particularly in
America.”
I devote a lot of time—
probably too much—to
reading the massive literature
on the state of newspapers
in the digital age. The
Economist’s a-bit-less-grim
conclusion struck me about
right at a time when it is
starkly clear the business
model that long sustained
newspapers, a combination of
mass readership and strong
advertising revenue, is clearly
broken.
The evidence of this is
abundant.
The Pew Research
DJNF PRESIDENT’S PERSPECTIVE
Center recently found
Americans are reading
as much as ever but that
a declining proportion
gets news or reads other
material on paper. In
2012, only 23 percent
read a print newspaper
the previous day, down
18 points from the 41
percent who did so 10
years earlier.
Equally discouraging
are statistics gathered
by the Newspaper
Association of America.
In 2011, newspaper
print advertising totaled $20.7
billion compared with $48.7
billion at the peak in 2000. At
$3.2 billion, online advertising
revenue was hardly much
of an offset for the decline in
print ads. Daily newspaper
circulation, which reached a
record of 63.3 million in 1984,
was 44.4 million in 2011.
Still, the past year has
provided glimmers of
hope — most notably in
the widespread adoption
of “paywalls” that enable
newspapers to charge digit