David Warsh: Newspaper firms still set the agenda for news media

 Rolls of newsprint.

Rolls of newsprint.

John Micklethwait is one of five top editors in American journalism, along with Dean Baquet, of The New York Times, Gerard Baker, of The Wall Street Journal, Martin Baron, of The Washington Post, and Nicole Carroll of USA Today. In February 2015, after a decade as editor-in-chief of The Economist, Micklethwait took the top job at Bloomberg News and began a gradual shakeup of that giant, mostly digital, news service. Earlier this month, in the company’s magazine flagship, Bloomberg Businessweek, he ventured a spirited essay on "The Future of News''.  Quality journalism, he says, is coming back.

With becoming humility, Micklethwait reminds readers of how he had been editor of The Economist only a few months when, in August 2006, the magazine ran an obituary on its cover, in the form of a ransom note: "Who Killed the Newspaper?''

Newspapers had traditionally set the agenda for the rest of the media, stated the editorial that accompanied a special report. “But in the rich world [of the Internet], newspapers are now an endangered species.  The business of selling words to readers and selling readers to advertisers, which has sustained their role in society, is falling apart.”  Readership had been declining for decades as new media proliferated, and now advertisers were finally following readers out the door.

And so it seemed. That Economist cover launched a thousand PowerPoint presentations, he noted.  Such newcomers as Huffington Post, BuzzFeed and Business Insider were encroaching from one direction; giveaway newspapers like Metro from another.  Such honored newspapers as The Christian Science Monitor, The Guardian, and London’s The Independent were going strictly digital; others were cutting back sharply on their news staffs. Google and Facebook continued to soar, and a strange new application offering 240-character tidbits had made its appearance. Twitter would become, in effect, “the largest newspaper on the planet.”

Yet a dozen years later, Micklethwait says that “the quality press has staged a remarkable resurrection, thanks to the introduction of metered paywalls that charge subscribers who read regularly online, but which still leave their websites open to much larger audiences of non-paying readers for whose fleeting attention advertisers are willing to pay something.” The Times has 2 million digital subscribers; the company is aiming for 8 million more.  The news business is changing with technology, becoming more digital, automated, personalized and mobile, but “this is transition, not decline,” he says.  People are still willing to pay for content, especially since news remains a relative bargain. The main surprise, he writes, had been “the survival of so many established names.”

The funny thing is, Micklethwait doesn’t mention print. Perhaps this is not surprising. He is, after all, editor of a mostly, but not entirely, a digital product. The subject of the continuing influence of the print press may be too close to the bone. I am entirely digital myself, and have no influence to speak of, so I’m under no such constraint.  Besides, I have been right all along.

The biggest and best newspapers have survived and begun to prosper again, albeit in a low-key way, precisely because advertisers pay much more to reach readers of print than for fleeting digital impressions before online readers. I don’t see proprietary numbers, and newspapers shape and guard fairly carefully what information they release. But there is more reason than ever to think that healthy print circulation is the basis of a strong digital business.

I watch hardly any television, and listen to National Public Radio news only at breakfast. I subscribe to the print editions of The Times, The Journal, the Financial Times and to the digital version of The Post. I have been deeply interested in their differing coverage of the presidency of Donald J. Trump:  The Times in a more or less permanent state of outrage, The Post full of steely purpose, but a little more restrained; The Journal so determined to seem fair to some of its readers and supportive to others that many days the Beltway hubbub doesn’t make the front page.

How these strategies will play out over time it is impossible to know, except to say that, broadly speaking, they mirror the roles each paper played in the Watergate scandal 45 years ago, with The Post’s and The Times’s parts reversed.  Paul Farhi, of The Post, wrote last week admiringly about how The Journal was “back in the game,” thanks to its revelations about payments by the Trump camp to adult film star Stormy Daniels. The Journal’s scoops have “gone a long way toward restoring some of the [paper’s] lost luster,” declared Farhi. Publisher Rupert Murdoch, a long-time Trump friend, bought The Journal in 2007 and in 2013 installed Baker, a conservative columnist for The Times of London, as its editor.

The point is, while two papers are more aggressive than the third, all are viewed as producers of reliable news. (I omit the intersection of The Journal's editorial page with television’s Fox News, which is also a Murdoch property, epitomized by a Friday night talk show, Journal Editorial Report.) Because of their reputations, and the resources they have committed, there is no doubt that the newspapers are dominating the story.  The Financial Times, as always, floats slightly above the fray, concentrating on how nations’ policies adjust to changing circumstances.

To put it slightly different, newspapers are businesses surrounded by moats. The term is a favorite of Berkshire Hathaway’s Warren Buffett. Moats are barriers to entry by would-be competitors – in this case, printing plants, distribution networks, brand recognition, superior revenues and know-how. The expectation of higher standards of reliability attach to the businesses of those willing to put such investments at risk.

The larger point has to do with the role of newspapers as bulwarks against that which is truly “fake news,” of which there is plenty these days. Micklethwait makes the point tellingly when he says that bursts of fake news have often accompanied big changes in technology.  “After the steam-powered press increased productivity ten-fold in 1814, cheap newspapers, many scandalously inaccurate or racist, sprouted everywhere. In 1835, New York’s Sun, which sold for a penny a copy, reported confidently that half bat, half-human mutants were living on the moon.” Hearst and Pulitzer precipitated the Spanish-American War.

And yet, he says, the industry soon got wise to the market. Publishers began to differentiate the products.  Many advertisers preferred to dissociate their brands from obvious rubbish; many readers preferred to pay more for a quality paper – the the Tribune, the Herald, and, in the 1890s, the Times in New York. Micklethwait thinks something similar is happening now.  The three-penny newspapers vs. the penny press of the 19th Century have become this century’s $1,000- or $500-a-year newspapers and Bloomberg, with its $20,000-a-year terminals vs. the cable TV shows, the supermarket tabs, the blogs, and, of course, the Twitter accounts.

I think he’s right. But here’s the rub. Bloomberg is enormous, completely reliable, rich, but it is mostly private. Its news service was established only in 1990 as an adjunct to its wildly profitable data base of bond prices.  Even though the company is much, much richer than The Times, it has much  less authority, partly because of its culture, but mostly because it doesn’t reach a mass audience.  Founder Michael Bloomberg could easily afford to build a national daily print newspaper from scratch, but it would take years to succeed, and, more likely, it would fail. So Bloomberg News is expanding a version of its Businessweek pay-wall approach instead, making much of its premium content available to a larger online audience on a limited basis in hopes of increasing its prominence. And of course the weekly magazine Bloomberg Businessweek helps, too.  I always look forward to reading it.

But this why  Micklethwait didn’t mention newsprint in his broadside on the future of news. There are a great many sources of reliable news – The Times mentioned 20 representative names in an exemplary house ad earlier this month.  “Don’t just read The New York Times,” it said. “Read The Wall Street Journal. Read The Atlantic. Watch CNN. Read the BBC. Listen to NPR…” and so on down a list that included foreign Web sites and television networks – NBC and MSNBC, but not Fox.

Thereby they made their point.  It may not always be so, but for now, and for the foreseeable future, newspaper companies still set the agenda for the rest of the incredibly complicated system that we still call “the  news media.”

David Warsh, an economic historian and long-time columnist, is proprietor of economicprincipals.com, where this column first ran.