Historic Changes in the News Business

History will record that the nation's recent financial crisis coincided with a devastating depression for newspapers: closures, widespread layoffs, and bankruptcies. The narrative is unquestionably fixed. Newspapers, the bedrock over centuries for informing the citizenry, have been diminished as an industry in a way that is likely to be permanent. But it is also increasingly clear that the news business overall has simultaneously been in a period of extraordinary activity -- much of it innovative, some of it profitable -- and that story will ultimately shape the long-term judgment of our information culture at least as much as what has befallen newsprint in the 21st century.

Market experts report that many small and medium-size local newspapers have weathered the crisis and are developing effective digital strategies.

By now, commentators by the score have had their say about the sale last week of the Huffington Post to AOL for $315 million, a meteoric rise in commercial value for an initial investment said to be about $2 million. There is definitely something perverse about the takeaway riches of Huffington's founders and investors based mainly on material aggregated from other sources and bloggers who get paid zip. Nonetheless, the transaction highlighted for me just how much has been happening in our industry. In perspective, the crash of so many newspapers seems somehow less catastrophic, even if it deeply saddens those of us whose devotion to them remains strong.

Very briefly, it has to be said that the worst for print may be over. Market experts report that many small and medium-size local newspapers have weathered the crisis and are developing effective digital strategies. The New York Times has certainly stabilized. The Wall Street Journal, with Rupert Murdoch's commitment and billions, reports growth in circulation and revenue. The Washington Post, USA Today, and the major Tribune Company newspapers (still in bankruptcy) have been humbled, but with the right leadership and savvy business management could combine their traditional roles with meaningful online ventures and continue to play a major part in our national life. The metropolitan dailies -- Philadelphia, Denver, Seattle, San Francisco, and elsewhere -- may be too far gone to ever really recover, but there are still some daredevils. Watch the Dallas Morning News, whose publisher, James M. Moroney, is determined to reinvent the model with a higher subscription price, pay walls, and a smaller circulation, or go down fighting.*

In the days after the Huffington Post deal, I made a list of some of the extraordinary range of developments in the past two years, some creating altogether new enterprises, others revamping legacy organizations revitalized by changed ownership and some surprisingly entrepreneurial innovations by ink-stained wretches risen from newsrooms. The fire sales of Business Week and Newsweek brought two of our most important magazines back from the brink. Bloomberg Business Week, almost overnight, became a significantly revamped journal backed by the Bloomberg news empire, which gives it every chance of regaining a valuable niche. Tina Brown's consolidation of Newsweek and the Daily Beast is already a reflection of her almost superhuman energy and networking skills. Tina (a friend) will certainly attract readers and buzz. The biggest question for "Newsbeast" will be the patience of its funders (Barry Diller and Sidney Harman) as they wait for their investment to provide revenue.

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Peter Osnos is a contributing writer for The Atlantic. He is the founder and editor at large of PublicAffairs books and a media fellow at the Century Foundation.

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