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Today, the Project for Excellence in Journalism released a report that highlights changes that have been taking place in the U.S. newspaper industry.

Among other things, the report revealed, “There is less foreign and national news, less space devoted to science, the arts, features and a range of specialized subjects. Business coverage is either packaged in an increasingly thin stand-alone section or collapsed into another part of the paper.”


Source: Project for Excellence in Journalism

Arguably, newspapers are cutting back on content that is likely of greater importance than in the past. At present, the world is continuing to witness a trend toward ever more interconnected economies (trade and capital flows); increasing competition for dependable and economical access to energy resources; the unwinding of the U.S. real estate bubble and credit squeeze/financial system challenges in its aftermath; the continuing rise of China and India as global economic powers; elevated geopolitical risks on account of Islamist radicalism, Iran’s nuclear program, military and political developments in Iraq and Afghanistan, among others. Arguably, one could make the case that a well-informed citizen needs credible, timely, and objective information in exactly the areas in which American newspapers are reducing their coverage.

While U.S. newspapers are reducing “big picture” (international, national, and business) content, they are aggressively adding to their local content. The report disclosed:

A whopping 97% of editors rated local news “very essential” to their news product—by far the highest percentage of any news category. Even America’s largest newspapers—those with the greatest reach—gave their highest “very essential” rating (94%) to local news. However, larger and smaller papers diverged sharply on the importance of closer in, even more local, neighborhood, or so-called “hyper-local” news.

In my opinion, shift toward provincialism in news coverage at a time when greater information on international, national, and business developments appears to be needed, raises the question as to whether U.S. newspapers are investing in a strategy that is positioning them for irrelevance. Contrary to their current strategy, it is international, national, and business news that would help their readers better understand such local matters as why home prices in their neighborhood have been declining, why they are paying much more for gasoline today, why their local job market has grown more challenging, etc.

Perhaps as an early hint of the consequences of employing strategies that are making them less able to provide for the information needs of their customers, the report states, “…more people today in more places read the content produced in the newsrooms of American daily newspapers than at any time in years. But revenues are tumbling.” If newspapers were, in fact, providing the value that their readers desire, the rise in readership (newspapers and their websites) could make it possible for at least the strongest newspapers to command greater revenues and profitability.

There is little doubt that the rise of the Internet, and the role it has served in providing a platform for the explosive proliferation of blogging, has fragmented the news industry. Consolidation through mergers and strategic partnerships can play a role in reducing the revenue-profit losses that can result in a fragmented industry, but only to a point. Efficiency gains, alone, cannot provide a viable substitute for the development of a competitive advantage in broader value-driven attributes. Providing enhanced value that is directly relevant to customer needs is a useful, if not essential, strategy if newspapers are to successfully overcome the challenges associated with a fragmented industry.

Ironically, the newspapers’ increasing shift to local content is may well be accelerating their move to reduced relevance. The growing multitude of local bloggers is particularly well-positioned to compete effectively when it comes to the development of purely local content. In general, most bloggers do not command the sizable resources or specialized skills/expertise necessary to dominate on the larger international, national, and business areas. But what they lack in such resources and skills, not to mention a formal journalistic background, they more than compensate for in intimate knowledge and relationships in the local areas that they cover.

Nonetheless, the rise of the Internet in general and blogging in particular do not have to lead to the extinction of the newspaper. Just as the Internet has fragmented the news industry, it has also created some amazing opportunities, as well. Newspapers now have the chance to enter into strategic relationships with local bloggers to improve their ability to cover local news stories. They have a chance to enter into deals with some leading business bloggers e.g., Yale University Professor Robert Shiller (co-author of the Case-Shiller Home Prices Index), to provide detailed, authoritative and objective business, financial, and economics information at a time when the nation faces some significant economic challenges. By building such partnerships, they could actually free up more of their resources to strengthen their inherent advantage in national and international news coverage.

Instead, newspapers are abandoning the areas in which they still enjoy competitive advantages in resources, quality control, contacts, and journalistic reach over their blogging rivals. They are failing to leverage the opportunities made available by the Internet and blogging. Rather, they are increasing their coverage in areas in which local bloggers enjoy advantages in cost, intimate knowledge/relationships, and responsiveness. That strategy may well be fueling the situation in which newspapers presently find themselves: growing readership/viewership, but lower revenue.