Future of Newspapers: Less Print, More Digital, Alternative Forms of Funding

What do the mainstream media and Christian denominations have in common? Great histories and uncertain futures.

That’s the view of Bob Cox, publisher of the Winnipeg Free Press and chair of News Media Canada, an umbrella group for newspapers and radio and TV stations in Canada.

At the same time, they share another important thing: “We have a mission that we feel is crucial to the communities we live in,” he stated.

Cox shared that perspective on November 20 during a webinar with members of the Canadian Christian Communicators Association (CCCA).

He went on to say while newspapers like the Free Press are facing severe challenges, “demand for what we produce, news and information, has not gone away.”

According to the most recent data from Vividata, the Free Press reaches 64% of adults in Winnipeg, and 64% of Winnipeggers say they read a newspaper in some form, he noted.

Nationally, things are similar, he said, with 79% of Montrealers, 68% of people in Toronto, 76% of people in Victoria accessing newspapers.

“Basically, about three out of every four Canadian adults get news from newspapers every week,” he said.

Good news: People still reading newspapers, but new ways of consuming news

But if people aren’t abandoning newspapers, it’s also true they aren’t consuming them the way they used to.

That same data from Vividata shows many newspapers in Canada have digital audiences larger than, or the same size as, their print audiences, he said.

This includes the Globe and Mail, the National Post, the Toronto Star, Le Devoir, the Ottawa Citizen, the Calgary Herald and the Windsor Star.

All of these “papers” are “actually majority digital media or close to it,” he stated.

“We’re fast approaching the tipping point where all daily newspapers will have primarily digital audiences.”

Bad news: Falling advertising revenues

While its good news that people are reading newspapers, the bad news is financial support for them as fallen dramatically.

“In many ways this is like a lot of churches that have widespread community support but empty pews so they don’t have enough donations to keep their doors open,” he shared.

A chief reason for the financial drop is how local businesses, which used to support newspapers with advertising, spend more and more of their advertising dollars on Facebook and Google.

Those ad dollars, which used to support local journalism, now “leave the community,” he stated.

Nationally, Cox said, ad revenues in newspapers have fallen by half in the past five years to about $1.5 billion from $3 billion, and that $3 billion is half again of what existed a decade ago.

More bad news: Drop in circulation

Added to that is the change in consumer habits, as readers who used to buy subscriptions go online expecting to get news for free.

The result is a significant drop in circulation. Cox said the Free Press sold about 250,000 copies on Saturdays in 1984; today that figure is 73,000.

Nationally, the number of printed papers sold is half what it was a decade ago, he noted.

And yet, surveys show people still really value local news, he said. “They see it as a public good that is vital to the democratic health of their communities. They just don’t want to pay for it.”

According to Cox, only about 20% of Canadians are financially supporting news, either through subscriptions or donations.

The result: Media in a precarious state

This isn’t just a problem for newspapers, he added.

“Most people are unaware of the precarious state of local news, the fact that all local TV stations lose money on news,” he said.

The result for all media is less money for local news gathering, print, TV or radio.

“In many communities there remains the appearance of news sources, since newspapers still publish, but there is not the reality of local news, as very little money is put into news gathering,” he said.

“They call these ghost newspapers.”

So if readers are moving to digital, is that were newspapers should be placing their bets? Yes, said Cox, but it isn’t easy.

“Most of the newspaper industry is not positioned to survive the switch to digital,” he said. 

“The majority of their revenues are related to the sale of printed copies and the sale of advertising in those printed copies.”

Digital revenues not filling the gap

At the same time, digital advertising isn’t filling the gap left by the decline in print advertising.

The Free Press, he said, has digital revenues of about $5 million a year and expenses of $45 million—nowhere near enough to help keep it going.

Some bigger newspapers, like the New York Times, have made great strides, he said, and may soon earn enough from digital to cover the costs of its journalism.

But the Times has 3.2 million digital subscribers and a national audience, he observed. “Most of us are not in this game.”

What are the solutions?

If those are all the challenges, what are some solutions? Cox had a couple ideas if newspapers are to survive.

The first is to give up the printed newspaper—if digital revenues aren’t keeping up with expenses, the only thing left to do is reduce expenses, Cox said.

That means cutting print.

“Most of the $45 million in annual expenses at the Free Press is related to the cost of producing a manufactured good every day,” he said—things like buying paper, paying press operators, delivering the paper.

The newsroom budget, on the other hand, is only about 15% of total expenses.

“Strip away all the manufacturing and you have expenses of about $12 million to produce and present digitally all of that journalism,” he stated.

If that’s the case, $5 million of digital revenues “looks a lot more promising,” he stated.

And if only 20% of Winnipeggers subscribed to the Free Press digitally, he would be able to meet that budget, he stated.

“It is only when we embrace this future, and put our best efforts into achieving it, that we will really have our heads around keeping the newspaper alive,” he added.

The second idea is to find alternative, non-traditional sources of revenue to support journalism.

This includes things like what the Free Press is doing with faith coverage—soliciting support from faith groups to produce more articles about religion.

It also involves government support.

This includes funding for journalists to cover so-called news deserts—communities where there is little or no local news reporting anymore.

It also includes a refundable tax credit for employing journalists; a tax credit to encourage people to take out digital news subscriptions; and allowing news organizations that operate as not-for-profits and receive donations.

Although the federal government has spoken affirmatively about these ideas, Cox said, nothing has actually been done yet.

For him, this is a problem.

“Time is of the essence. I first went to Ottawa in January of 2016 to talk to bureaucrats and politicians about the crisis in newspapers and we’re still waiting. Government simply has not moved fast enough.”

Important to be honest and engage public more

The media also needs to engage the public more and make them aware of the dangers facing local news, he said.

“The general public is only vaguely aware of the threat,” he said, noting after a Quebec newspaper declared bankruptcy people in the local business community pledged more than $1 million to the newspaper.

“The problem is that we all don’t want to have to declare bankruptcy to find out if our communities will support us.”

Surveys have shown educating the public on the benefits of local news, and the fact that it is in trouble, increase the likelihood of support.

“My advice to people in newspapers at all levels is to tell readers about what is going on,” Cox said.

“Don’t cover up financial troubles, explain them. Give people the information that will allow them to act before it is too late.”

At the end of the day, “public support is the only hope we have,” he stated. 

“It always has been.”