The Case for Local Ownership of Newspapers

Beating the street looking for a job in journalism is not a pleasant thought these days.

As the firing of editors at places like the LA Times over newsroom staff cuts demonstrates, out-of-work journalists are totally divorced from the decision making that affects their lives. This is because the big decisions in this industry are being made by corporate management types whose primary goal in life is a seven figure bonus.

These titans of industry are not just in the media companies; they are also in advertising and marketing. That the opinions of a few carry such weight is simply a distortion caused by over-consolidation of the traditional media.

Still, this is not a battle of nefarious forces of good and evil but rather a clear cut business reality based on an expanding supply of advertising opportunities that are proving both intriguing and competitive to advertisers.

Advertising as an industry has changed from a very competitive field where the majority of expenditures were in the mainstream media to one infinitely more varied and increasingly hyper-competitive. Always a supply and demand game, today, options and alternatives abound.

Ad spending on alternative media, including user-generated Web content, Internet search, mobile, gaming and branded entertainment, this year is on pace to jump 20.2% to $88.2 billion, even if there is a recession, according to a PQ Media report published by Mediaweek magazine March 26. Overall ad spending is up just .02 percent for the year according to a report in the same magazine a day earlier.

In this kind of environment, selling is the challenge. That those pitching alternatives that don’t include news means they are simply being rewarded for their creativity.

The problem with newspapers is not so much that sales are declining but rather that readership is declining. One also cannot ignore that the price newspapers charge for their advertising is at historical highs. This further erodes the industry’s competitive position on any supply and demand chart. Combine that with plain physics – it costs a ton of money in an energy-limited future to move all those tons of paper around daily – and the cost side of newspaper publishing is just going to get worse and margins tighter.

Yes, eyeballs are going to the Net and the Net, because of the ability to let a user sift through haystacks of information for that needle of information they seek, is making it ‘the medium of choice’ in ad-cluttered 21st Century America. None of this should be news to the folks reading this.

But let’s not roll over like a puppy dog and pad the air in abject awe. The Internet is just a medium, which means it is nothing more than a new way to distribute that highly spoil-able but innately valuable commodity: news.

The real question in this new media environment is whether the large, lumbering corporate structure can adapt the fast-moving Net or whether leaner, more entrepreneurial efforts will emerge to meet those needs.

I’ll leave it to others to opine on the likelihood of who will have the most success among the major players. Rather, I suggest the “new” business model we should be actively encouraging is actually a rather old one. That model is that of the locally owned and operated newspaper.

I first became aware of this business model when I was a young sprout growing up in a small Mississippi River town just north of Memphis.

Yep, it was the 1963 and Phillip “Moon” Mullins, who along with his older brother owned the weekly in Oxford, Mississippi. Mullins had to leave that ‘University town” because he was ahead of that state (and his advertisers) on the issue of race. Rather than shut up or even abandon the industry, he sold the Oxford newspaper and bought the Osceola (AR) Times. In Osceola he found a progressive community with enough support from the local merchants to continue his crusade for positive race relations and frankly helped transform and lead that small town to a brighter future.

From a young teens viewpoint, it was obvious that Mullins was opinionated and that everyone knew him and knew that he owned the paper. He was a big fish and that was his new pond. It was at that time that I decided I wanted to be a publisher.

Mullins was a publisher because that was what he wanted to be. I can hear the collective sighs but before you go harrumph, the more important point is that communities need publishers to push, prod and help shape the future. Communities need that big fish and opinionated guy who is accessible and, in the context of the community, as powerful as he was independent.

With the consolidation of media including weekly newspapers and local radio, that local leadership role no longer exists. Corporate types don’t cut the mustard because, with obvious exceptions, as a rule they lack the essential commitment to the communities they earn a salary to serve.

The recreation of this role is an opportunity offered by this new media. Barriers to entry are low, server software such as Drupal is available for free and no community can afford to send all its advertising money to NYC or Silicon Valley. The new media, because of its low barriers to entry, creates that opportunity.

Will this model work for Chicago or New York? Richard Anderson of Village Soup, Geoff Dougherty of the Chi-Town Daily News and Gail Robinson of the Gotham Gazette are three newschallenge winners whom I suspect not only share, but are, like me, actively working to realize that dream in one way or another.

We can intellectualize about the business models and plot exit strategies and even calculate risks until the sun sets a thousand times but the plain fact is the new media (in all its interactive, audio-video-text glory) gives communities is the opportunity to reclaim their own independent voice. All it takes is for those who have guts and gumption to just step forward and do it.

G. Patton Hughes