The tombstone of Google's former CEO Eric Schmidt will read "I killed newspapers," Bob Woodward said yesterday. With all due respect to the celebrated reporter and author, this is a misguided way of looking at Google, or newspapers, for at least three reasons.
1. The Decline is Older Than Google
Woodward has been around newspapers for more than 40 years, so he knows as well as anybody that the decline in newspaper circulation is older than the search engine.* Recently the Washington Post, where Woodward is still assistant managing editor, wrote, "average daily circulation of all U.S. newspapers has been in decline since 1987 as papers have faced mounting competition for reader attention and advertising." In 1987, Google founder and CEO Larry Page was 15 years old and Google was 11 years away from being a company.
Newspapers have been under assault since the invention of radio, the invention of Time magazine, the invention of television, the invention of cable TV, and so on. Today, 140 years after the Washington Post started publishing, the newspaper industry is a $30 billion national business. That might be decline, but it's not death. Technology is disruptive and successful companies adapt rather than draft the tombstones of their would-be killers.
2. Don't Blame Google, Blame the Whole Internet...
In Jim Fallows' wonderful piece on Google's attempts to "save the news, economist Hal Varian explained that newspapers won Pulitzer awards, but not much money, from the kind of reporting that made Bob Woodward famous. "Serious reporting, say from Afghanistan, has simply never paid its way," he said. "What paid for newspapers were the automotive sections, real-estate, home-and-garden, travel, or technology, where advertisers could target their ads."
In 1987, the best way to learn about the city's best deals was to open the Washington Post. Today, you just open a browser. Jim expands:
The Internet has been one giant system for stripping away such cross-subsidies. Why look to the newspaper real-estate listings when you can get more up-to-date, searchable info on Zillow--or better travel deals on Orbitz, or a broader range of movie showtimes on Yahoo? Google ... lets advertisers reach the one customer who is searching for their product, rather than making them advertise to an entire class of readers.
3. ... Or Better Yet, Don't Blame Anybody
Somebody once told me that a newspaper is like a high-minded lecture series held in the back of a big shopping mall. The lectures never paid for themselves, so all the mall shops -- the nail salons, clothes stores, and restaurants -- included a small surcharge in their prices to pay the speakers. This worked beautifully for a while because the lectures attracted high-end clientele and the stores profited from their wallets. But then somebody invented the Internet and everybody realized shoppers could visit the stores online without paying extra to support the lectures. What happened? Shops fled from the mall, which forced the lecture series to find other sources of revenue or otherwise pay fewer speakers less money.
This is what has happened to newspapers. Merchants left the cozy shopping dens of the New York Times and Washington Post and they moved online where they could target consumers more directly and cheaply. Classified aids fled to Craiglist (the use of online classifieds doubled between 2005 and 2009), car buyers fled to car sites, and travelers went to Orbitz. Suddenly, the serious reporting -- the proverbial lecture series at the back of the mall -- was left naked without the companies that agreed to subsidize it.
Blame the innovators, if you like. The decline of newspapers is Groupon's fault, and Craiglist's fault, and Zillow's fault ... but it's also the fault of newspapers who sat back and watched entrepreneurs invent Groupon and Craigslist and Zillow and cut costs out of desperation.
All of which is to say, the epitaph "I killed newspapers" isn't just for Google. It's for everyone.
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