Unfortunately, my local paper has taken a decided downturn, close to becoming just a advertising circular, with a few stories thrown in here and there. Newspapers should have more reporters, not less, staff cutbacks is not the solution to restoring newspaper profitability.
As Felix Salmon says when you pay for the physical newspaper you’re not paying for the news, you’re paying for the paper. A newspaper is a big physical object. Creating it and distributing it on a daily basis is a hugely expensive undertaking. And subscriptions to newspapers are cheap — the amount of money being charged for home delivery of The New York Times or any other major paper only does a tiny amount to defray the costs of producing and delivering the object.
The problem newspapers are having with online isn’t that the readers won’t pay, it’s that the advertisers won’t pay. The reduced costs per reader make up for the reduced revenue involved in giving the product away, but a physical newspaper generates far more in terms of ad revenue per reader than does a newspaper website. Probably once physical newspapers all disappear, ad rates for news websites will go up somewhat merely because ad buyers won’t have as many options. But I think it’s plausible that even when everything shakes out online advertising revenue still won’t support the volume of staff that print advertising revenue once did.
