A Prediction of Print’s ‘Fast, Slow, Fast’ Decline

Earlier this spring, the public editor of the New York Times, Margaret Sullivan, wrote a post on how the printed newspaper would continue to be important to the Times.   In reply, Professor Clay Shirky of NYU wrote with what he called a “darker narrative’ of print’s prospects. 

(See, at Sullivan’s blog, A ‘Darker Narrative’ of Print’s Future From Clay Shirky.)

When Shirky wrote to Sullivan, she published some of his remarks.  Longtime readers know that I’m an admirer of Shirky’s work, and his reply is, I think, not merely darker, but more realistic, than Sullivan’s views.

Here’s a portion of Shirky’s perspective on print’s future:

I’d like to offer a considerably darker narrative: I think the pattern of print revenue decay will be fast, slow, fast.

The original, fast decline was 2007-9, where two overlapping events — the Great Recession and the sudden shift to mobile consumption — created a vicious cycle, where your most adventurous readers and least committed advertisers both moved rapidly to digital-only, amid a period of general contraction in ad revenues. These were the years of double-digit decline in revenues.

By 2010, most of the early abandoners had left and the economy recovered, leaving you with only secular decline in readership (down 5-6 percent a year) and only proportional decreases in advertising revenue. This is the slow period of print decay.

The people you quote — Baquet, Caputo — seem to be betting that the current dynamics of slow decline form the predictable future for your paper. I doubt this, and the alternate story I’d like to suggest is that print declines will become fast again by the end of the decade, bringing about the end of print (by which I mean a New York Times that does not produce a print product seven days a week) sooner than Baquet’s 40-year horizon, and possibly sooner than Caputo’s 10-year one. (Public editor note: Mr. Baquet said “no one thinks there will be a lot of print around in 40 years.” Mr. Caputo predicted that a printed Times would be around in 10 years, but did not specify seven-day-a-week production.)

You observed that print is responsible for the majority of ad revenues at the paper, but the disproportionate importance of print is not a signal of the robustness of the medium, it is a signal that advertisers have not found a way to replace print ads with anything as effective in other media.

The problem with print is that the advantageous returns to scale from physical distribution of newspapers become disadvantageous when scale shrinks. The ad revenue from a print run of 500,000 would be 16 percent less than for 600,000 at best, but the costs wouldn’t fall by anything like 16%, eroding print margins. There is some threshold, well above 100,000 copies and probably closer to 250,000, where nightly print runs stop making economic sense. This risk is increased by The New York Times’s cross-subsidy of print, with its print+digital bundle. This bundle creates the risk of rapid future readjustment, when advertisers reconsider print CPM in light of reduced consumption and pass-around of print by all-access subscribers. (Public editor note: C.P.M. is the cost to the advertiser per thousand readers or viewers, a common measurement in advertising.)

Both your Sunday and weekday readerships are already near important psychological thresholds for advertisers — one million and 500,000. When no advertiser can reach a million readers in any print ad in the Times (2017, on present evidence) and weekday advertising reaches less than half a million (2018, using the 6 percent decline figure you quoted), there will be downward pressure on C.P.M.s. This makes no sense, of course, since pricing ads per thousand should make advertisers indifferent to overall circulation, but marketing departments have never been run terribly logically.

So it seems likely to me that after the early, rapid decline, we are now in a period of shallow, secular decay, which will give way to a late-stage period of rapid decline. You can see something like this has happened already in your delivery business, when you read the comments on your piece. Several commenters would like a print copy, but don’t live in an area where it’s cost-effective to deliver the paper. This happened to my mother, in western Virginia; she is now digital-only because after years of gradual decay, the Roanoke, Va., market simply crossed a threshold where it became unprofitable, and all the remaining print subscribers disappeared all at once.

Those dynamics, in miniature, characterize print as a whole — below some threshold, the decay stops being incremental and starts being systemic.

Shirky’s talking about a large paper in this discussion, but his observations have value for smaller ones, too.  Significantly, any slowdown in print’s decline is temporary, and advertisers’ alternatives and print’s own huge costs will erode print circulation significantly.   

For an expression of Shirky’s views on papers, see Last Call: The end of the printed newspaper. 

Tomorrow: On Trends in Whitewater’s Media.