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 AJR  Columns :    THE NEWSPAPER BUSINESS    

From AJR,   December 2001  issue

Zapped, Not Thrown   

Electronic delivery saves money but could limit public discourse.


By John Morton
John Morton (mortoninc@msn.com), a former newspaper reporter, is president of a consulting firm that analyzes newspapers and other media properties.     

It has forever been a quirk of the newspaper business that, after spending vast amounts of money to gather, condense, edit and print information, the final product for the most part winds up being thrown at the customer.

True, some papers are sold from newsstands and news racks, especially in big cities, and a lot of suburban dwellers get their papers stuck into a tube rather than tossed into the front yard. But the point remains the newspaper industry is bound by an aged, cumbersome and expensive delivery system.

How all this might finally change, at least in part, can be seen in the new ability to view an entire newspaper, page by page, on a home computer screen or other viewing device. Such a delivery system offers many economic advantages to newspapers, but it also poses concerns about the ultimate impact on the quality of public discourse.

First, the advantages: Newsprint expense accounts for 15 percent to 25 percent of newspaper operating costs (the percentage is highest at larger circulation newspapers, which tend to print larger numbers of pages compared with smaller papers). Moreover, a lot of the cost of running circulation departments, which can take up 10 percent to 20 percent of operating expense, is tied up in the distribution system with its trucks, route managers, deliverers and the like.

Electronic delivery is close to costless, and it can reach remote locations that newspapers often eschew because traditional delivery costs more than it brings in. Electronic delivery can expand a newspaper's circulation market areas, possibly raising circulation. Newspapers exploring this approach intend to charge a subscription price, as the Wall Street Journal already does for its online edition, which means that electronically delivered papers will count as paid circulation under the rules of the Audit Bureau of Circulations.

Reaching readers beyond the traditional delivery system is the goal behind the New York Times' decision to create electronic delivery of its national edition. The Times is using NewsStand Inc. of Austin to digitize the paper and send images of its pages over the Internet to those who sign up for the electronic version. NewsStand already distributes the International Herald Tribune, based in Paris. Other papers going electronic, using their own software, include Ohio's Sandusky Register and Akron Beacon Journal.

The Beacon Journal for a time offered its full edition on a CD-ROM for 25 cents, but recently discontinued the effort. I can imagine newspapers offering to home-deliver CD-ROM versions, but anyone equipped to use a CD-ROM likely is also capable of, and probably would prefer, receiving electronic delivery.

Another company involved in electronic newspaper distribution is NewspaperDirect of New York, whose customers are hotels, cruise ships and financial institutions around the world. Customers download to laser printers complete newspapers, including the Boston Globe, USA Today and others in the United States, as well as numerous foreign papers. And the Newspaper Association of America has created the Local News Gateway, through which travelers can connect to newspapers with handheld and other portable devices.

Dazzling as all this is, there are some practical concerns. Reading a newspaper on a computer screen, even a big one, quickly tires the eyes. This will remain a constraint until computer screens with definition equal to a laser printout become ubiquitous. Printing out the newspaper, page by page, on 11-by-17 paper, is possible, but could prove daunting in the amount of paper and time required for most home readers.

Most troubling, though, is the very capability that digitizing a newspaper places in the hands of the reader. True, it is an advantage that, once a newspaper is in a home computer, the subscriber can enlarge stories to make for easier reading and can easily go to jumps or to articles of particular interest by keying in subject matter, titles or names.

But consider these words of Microsoft's Bill Gates when he said a few years ago, approvingly, "customized information is a natural extension" of digital delivery of news. He foresaw a time when software could compile "your completely customized 'newspaper' " made up of "information that conforms to a particular philosophy and set of interests."

In other words, the new technology will empower people to be ignorant of the ideas and interests of others, to insulate themselves from the warp and woof of society, to narrow themselves in a way that undermines the quality of public discourse so central to a successful democracy. It's a frightening prospect.