If newspapers are profitable, how can they be dying?

I wondered this myself. Of course I know the answer - smaller news holes, shorter and fewer stories, fewer reporters, less newsprint. As a result, the quality of the product is pretty shoddy. I remember growing up in Westchester County, I read the Herald Statesman every day as a child. It felt so thick and broad and chock full of information. Great stories from the police beat, which may have sparked my fascination with crime and my desire to become a police reporter (best and worst three years of my life).

Fast forward 20 years, and now when I go to visit my parents I can breeze through the paper - now called the Journal News after Gannett consolidated all the zoned, uniquely named editions into one - in less than 20 minutes. There is nothing there. The Local section has five stories on the front and little else on the inside pages besides obits and ads. The Local stories are very "community" oriented - lots of tree-plantings and charity events. What the journalists do write at the Journal News is still relatively insightful, but there is just so little of it. Of course, I can waste away hours and days reading news on the Internet. As I have. As I am.

A super-long post by Jay Rosen offers much food for thought on the slow death of newspapers. This is but a tidbit; it backs up my anecdotal guesses as to why newspapers are profitable but going nowhere:

The Project for Excellence in Journalism, in its invaluable reporton the state of the news media today, putsit this way: “If older media sectors focus on profit-taking and stock price, they may do so at the expense of building the new technologies that are vital to the future. There are signs that that may be occurring.”

Newspapers in 2004, for instance, increased their profits at double the rate (8%) that their revenues grew (less than 4%), according to the Newspaper Association of America, a distinct sign of profit-taking. The industry remains highly profitable. Margins averaged 22.9% in 2004, according to the analyst Lauren Fine, and are expected to rise in 2005. The investment in online publications, though, where the size of the profits is still fairly modest, remains by most evidence cautious.

No R & D rush. No large investment in the future. No siren call to find the new model. And yet the Project for Excellence in Journalism report says that in 2004, daily newspapers (the ones still making money) employedfewer reporters and editors. They also squeezed in more ads per page, and less news. Not only are we not seeing the big investment in an online alternative, there are signs of a withdrawal before the great divide.

“There is more evidence than ever that the mainstream media are investing only cautiously in building new audiences,” the report states. “That is true even online, where audiences are growing. Our data suggest that news organizations have imposed more cutbacks in their Internet operations than in their old media.”

These media conglomerates are not doing the newspaper industry any favors. They are traditional companies that probably don't have many innovative executives who are willing to take risks and consider new business models. I think the idea of Mark Cuban owning a couple of newspapers is not a bad one? Or maybe Google?

I will write more on new, innovative approaches to print media in the coming days and weeks. Just because I have predicted the newspaper's death doesn't mean I want to kill it off. I love holding print in my hands - and the computer gives me eyestrain.