Book Review: Greatly Exaggerated: The Myth of the Death of Newspapers, by Marc Edge

Abstract

Greatly Exaggerated: The Myth of the Death of Newspapers. Marc Edge. Vancouver, British Columbia, Canada: New Star Books, 2014. 320 pp. $21 pbk.If you had long ago given up hope of a future for printed newspapers, you possibly stopped paying attention around 2010. Even then you should probably have listened more carefully. So concludes Marc Edge, a long-time Canadian reporter, editor, and scholar. Many analysts and scholars, overwhelmed by dramatic closures, cut-backs, losses, and the juggernaut of online news did not notice that the closures were mainly unsustainable second-place dailies, expenditure cuts really did ensure continuing profitability (even as profit rates returned to historically normal levels), and losses were more on paper than brick. Chapter 11 bankruptcies were not so dire. Bankrupt companies still made money. Lenders took a haircut, maybe lost some ownership. Yet new owners arrived and most papers survived. Profit at debt-laden chains like McClatchy dipped from the mid-20% range to 19.1% in 2008 but was up to 27% in 2010.Few doomsayers appreciated the significance of giveaways or the later runaway success of metered paywalls. They were too much distracted by the ballyhoo about newspaper-television convergence, web-based metrics, and the annihilation of already-torn Chinese walls. Newspapers did not die; newspaper competition did. Closures of metropolitan dailies have been almost entirely offset by new suburban and satellite city dailies. Some large papers are now not so large; small papers are often more profitable than large (the smaller the market, the better a newspaper's prospects).The basic problem was not lack of operational profitability but excessive debt needed to pay for exuberant acquisitions in the 1980s to 2000s. Even debt became an object of investment in an industry that enjoyed generous regulatory exemptions and tax benefits. The Internet was not so revolutionary; political economists should have better recalled how newspapers adapted to television. No major North American newspaper exited print publication after the Rocky Mountain News and Seattle PostIntelligencer in 2009. The Ann Arbor News folded as a printed daily, but the University of Michigan's Michigan Daily continued a roaring trade. In 2010, the Honolulu Advertiser merged with its joint operating partner, the Star-Bulletin, which had been on life support for years.After 2009, profit levels of most newspapers remained in the double digits, and some even topped 20%-a good deal better than the Fortune 500 average of 4.7%. The business model for print advertising, even at lower levels of revenue, was more profitable than the business model for online news media. Apparently huge losses were often merely an expression of an estimated decrease in the value of the business. Declining circulations proved a boon, encouraging papers to move away from casual subscribers with the biggest churn and instead focusing more on a reliable core-the better educated, more affluent readers who are best able to support paywalls. …