The New York Times circulation was only briefly above 1M back in the 90’s. That is a national circualtion paper in a town of 9M people, with an even larger metro. No more than 25% of people in any town ever read the paper. Now nearly everyone reads newspapers online. If newspapers put up paywalls, they will just shrink back to the audience they used to have…except now a paying audience. Digital ad revenue at every paper is so crackerjack small that they are giving up nothing. I know newspapers extremely well- the digital ad numbers they report now are usually very small, and even then, they are still bullshit. No advertiser wants a fucking banner ad on a newspaper website. It cheapens the image of your product and people only associate it with annoyance. They just finagle the books to “give” print ad revenue to their digital side. They think this makes them look digital and furturistic. Those who follow their income statements know that they are only fooling themselves.

Well, as I’ve said before, you cannot think clearly about the costs and pricing of newspapers and magazines unless you use the concept of “price FOB final page proof,” separating the editorial and advertising business from the printing and distribution business. Generally speaking, with very few and specialized exceptions, newspapers and magazines have never succeeded in charging the reader anything for content, “FOB final page proof.” People pay a lump sum for their computer or smartphone, and a monthly sum for internet access or cellphone service, instead of paying a little for the printing costs of each newspaper or magazine.

The newspapers’ problems have to do with advertisers who have bailed out with the transition to the internet. Part of this is that the advertisers never believed in the advertising value of news in the first place, and certainly not that of local news. To a degree, the advertisers always believed that someone who was disposed to buy things would make a collection of relevant advertising material, from any readily available source, and would throw out old material when new material arrived. The advertiser was only willing to deal with the newspaper because the newspaper had a monopoly on distribution. Now, the local newspaper has a special edition for non-subscribers, which arrives through the mail, once a week or so. This week’s copy contains inserts for two furniture stores, one auto dealer, Family Dollar, Rite Aid drug store, Lowe’s home improvement, K Mart, and two supermarkets, Krogers and Giant Eagle. I made the list while throwing them, one after the other, into the wastepaper basket under my desk. The “newspaper part” of this edition contains classified ads, and a few small display ads, but zero local hard news, being little more than a mailing wrapper for the various inserts. Of course there are other competing advertising bundlers, and Wal-Mart prefers to send out its own circulars under separate cover. The advertiser does not need a newspaper. A considerable element in the decline of the local newspaper is improved computerized postal sorting machines, which enable the Post Office to quote deeper and deeper discounts on junk mail.

Of course, there are other, related changed going on. Small businesses are being driven out of the business of selling things, that is, mass-produced manufactured goods. When everything is made in China, a kind of “get big or get out” logic prevails. You are either big enough to employ someone who can speak Mandarin or Cantonese, or you are not big enough to be in the game. Some people shop at Wal-Mart, some at Target, and some online at Amazon, but it all comes out about the same in the end. The big players sell a wide enough range of stuff that they can put together economic mail shipments of advertising matter, up to and including something like the old Sears catalogs (perhaps with QR codes), and they don’t need a newspaper to do it.