Do Newspapers Have a Future?

Everything was better in the old days, or so they say. But for the German newspaper business, the bromide is financially proveable.

In the 1990s, mailboxes across the country were filled to bursting with fat weekend editions of the Frankfurter Allgemeine Zeitung (FAZ), whose editorial content was pumped up with hefty classified sections. But over time, an ongoing economic crisis and stubborn joblessness have led Germany's most respected newspaper -- and its budget -- to shrink noticeably.

The slump in classifieds has also affected many other newspapers. But "there are not only economic reasons for the dramatic reduction in ad revenue," explained Robin Meyer-Lucht of the Institute for Media and Communication Management at the University of St. Gallen, Switzerland.

In 2003, Meyer-Lucht, together with Peter Glotz, published a comprehensive study on the future of the press and online journalism. In large part, he said, the lucrative sale of space for job, real estate and classified ads has gone to the Internet. And the study, which based its results on a poll of some 200 experts, said newspapers should expect further revenue declines in this area.

Readership is down

Newspapers aren't just losing classified ads -- they're losing readers, said Michael Haller, a journalism professor at the University of Leipzig.

"The total circulation of daily press is sinking consistently by between one and two percent each year," the professor wrote. Above all, the target group prized by advertisers, 20 to 40 year olds, are reading fewer newspapers. Ten years ago, some 70 percent of 20 to 40 year olds read the paper -- today it is just 60 percent. In comparison, the most loyal and assiduous group of readers are retirees. Publisher Alfred Neven DuMont agrees: "Our best readership are the elderly, the pensioners," he said in February in reference to the Welt am Sonntag newspaper.

Newspapers are looking for different ways to emerge from this crisis. At first, publishers reacted to the changing economic scene by reducing their content, but they didn't hesitate to resort to layoffs.

The Süddeutsche Zeitung discontinued its innovative youth magazine jetzt and the FAZ dropped successful young editor and novelist Florian Illies. The Frankfurter Rundschau, drowning in a sea of red ink, had to reduce its staff by more than half -- from 1,700 down to 750.

Book publishing, tabloids

New business areas are expected to help compensate for revenue losses. The Süddeutsche Zeitung imported an idea that showed promise in Italy, and brought its own SZ-Library literature series to the market -- with success. Just six weeks into the effort, the paper sold more than five million low-cost books. They have also begun publishing DVD editions, books on tape, and additional book series.

Others are hoping for salvation in the tabloid business. Cheap newspapers like Welt kompakt, News or 20Cent in the handy small format can be read easily in the subway and are extremely pared down in terms of editorial content -- good for people who want a quick read on the way to the office. Longer background stories or analysis have no place in the cheaply produced papers, which mostly repackage news agency reports.

In Great Britain, the changeover to tabloid formats has even led to an increased print run for the Independent newspaper. But in contrast to the German papers, the Independent chose not to cut back on editorial content when it changed formats.

The future is online?

Online journalism both benefits from and competes with the print media, according to the aforementioned study by Glotz and Meyer-Lucht.

"In the foreseeable future, the Internet will provide the daily medium for journalistic content for a large portion of the public," he said.

By 2010, 63 percent of the German population will have access to online journalism. Experts agree that the increased use of the Internet for getting daily information will come at the expense of newspapers.

"Online journalism makes it possible to publish in quick, timely fashion, and to continually update the stories," said Meyer-Lucht. For readers, online has the advantage that you can quickly call up several publications, to compare them while reading.

"Given the diversity in the media, the daily paper is simply no longer the first address for getting information," said Meyer-Lucht. The propagation of the media has led to readers being able to shop around and find the best way to meet their individual information needs.

Four-hour job

Many consider the reduced texts and simpler layouts of online journalism to be assets. Meyer-Lucht is convinced that some readers feel ovewhelmed by the amount of information in daily newspapers, and feel guilty about not reading the whole newspapers.

"I've done the math," Meyer-Lucht said. "To read a daily paper from front to back can often take more than four hours."

But the problem then becomes how to finance online content. The Internet is still shrouded in a no-cost mentality. Few are willing to pay for Web content, especially information. "To date, no one has been able to establish a workable pay service in terms of Internet news content," Meyer-Lucht said. The main source of income has remained advertising.

According to a study of the Online Publishers Association, European web sites get 70 percent of their financing by advertising -- with that amount growing, said Meyer-Lucht. But its possible this could change in the future.

"As online use increases and becomes more differentiated, the chances for paid content are greater," he said.