Adviser Update Spring 2013 | Page 4

P04.V53.I4 black cyan magenta yellow Page 4A 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