Who is going to uncover the next cheating scandal

Not long ago I wrote about the pay walls being erected by newspapers to try and stay in business. While I won’t be paying for access to every newspaper across the country, the fact is if we want reporters out their digging for the story and investigating corruption, they must be paid. Americans are used to being told they can get everything for free, but that just ain’t the truth.

This point was driven home during lunch this afternoon with a good friend who was born and raised in Georgia. We talked about the Atlanta public schools cheating scandal, which he pointed out was uncovered by the Atlanta Journal Constitution (AJC). The AJC broke the story back in 2008 when it uncovered testing irregularities, a fact authorities failed to notice and then refused to investigate until years later. Safe to say the indictments handed down this week against 35 people would never have happened without AJC’s work.

But can that type of deep and time consuming reporting be sustained in this era of newsroom cuts? The year after the story broke, COX Media, owners of the AJC and other papers, announced that it would be cutting the staff of the paper by 30%. According to the Wall Street Journal:

The AJC expects to reduce its 320-person news staff by about 90 positions. The paper also will continue to pare distribution to some outlying areas, a move that will cut about 2% from its circulation footprint. The AJC is the country’s 22nd-largest paper, with average weekday circulation of 275,000 copies.

The AJC said it plans more cost-cutting initiatives during the next 90 days as it aims to return to profitability next year.

In an editorial published at the close of 2010, AJC’s Michael Joseph wrote,

The hard work and tough decisions we’ve made in the last couple of years have begun to pay off in a significant way. That’s encouraging to me, and I hope it will be for you, too, our loyal customers. We appreciate your support, and we’ve been investing in our business to serve you better.

I’m happy to report that the AJC is profitable again. This ensures that we can continue to produce the quality journalism that you’ve told us is important to you. With our business once again in the black, we’ve added innovative content to the newspaper and ajc.com.

. . .

It appears the AJC has made strides despite the current climate of gutted newsrooms and papers going belly up. So if we want good reporting, we are going to have to pay for it and that means pay walls. The idea that online advertising would save newsrooms has failed, as demonstrated by a 2012 PEW report explaining that papers are losing $7 in print ad revenue for every $1 they gain in digital advertising. Check out this chart from the Economist’s Emma Gardner:

Derek Thompson of The Atlantic sums it best:

The scariest thing about the newspaper business is the idea that digital newspaper advertising is theoretically “alive” and “the future” even though it’s growing at 1/50th the pace of print’s decline. In the last five years, we’ve basically figured out one big thing about digital advertising — the power of search — while banner ads, native ads, and sponsored ads, and other non-search-advertising innovations haven’t been rich enough to pay for anything except the most shoe-string of journalism budgets. Basically, the digital ad business for newspapers stinks. And if it continues its pathetic rate of growth, four things will happen. 

First, many papers will erect pay-walls to beg for online subscribers. Second, many newspapers will discover their content is not distinguishing enough to justify digital subscribers and the pay-walls will flop. Third, many newspapers will continue to face newsroom and frequency cuts (e.g. going to three days a week). Fourth, many newspapers will die. They won’t die because Google attacked and killed them. They’ll die because newspapers have always been an indirect cross-subsidy of soft-news advertising paying for hard-news journalism. Online search simply offers a more direct way to advertisers to reach those soft-news readers.

The New York Times and Wall Street Journal have proven that “pay to read” can work. However I’m concerned with the small papers that cover city hall, local police departments and other organizations that may go unchecked.

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