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Newspaper and Its Declination in Revenue

Newspaper revenue depends mostly on nation, local display, and classified advertising. In 2011 publishers in general are pessimistic about the growth of advertisement revenue. Among all the reasons, executives and analysts point their fingers at the downturn of the overall economy, the rise of individual journalists, and the emergence of television, electronic media and nonprofit newspapers as the fundamental causes for the recession of paid circulation and the drop in profit margins. As the newspapers are pitied upon and referred to as an endangered species, governmental support and charitable foundations are considered to be the best solutions possible for the future of the newspaper corporations.

Reality of Print Media

In response to the reduction in advertisement and subscripition revenue, newspaper organizations are trying various ways to compensate their loss. Newspaper corporations in Canada began to cut jobs. The Toronto Star, the highest circulating newspaper in Canada, slashed 160 employers in 2008 . The National Post suffered from its lowest circulation rate of 200,000 with the loss of $60 million Canadian in 2001. From 2002 to 2009, the total losses of The Post were reported to be $139 million Canadian. In September 2009 alone, The Post lost 900,000 Canadian dollars and experienced numerous cuts . The Chronicle-Herald of Halifax also laid off 24 employers to reduce their losses. However, the United States is having much more difficult time. The Wall Street Journal raised its print issue price from $1.50 to $2.00 and The New York Times Co. in their 2008 earnings report raised the price of the daily newspaper and cut annual costs by $230 million. The Los Angeles Times in the same year slashed 250 jobs in the paper's business section and 150 in editorial; the company also cut the number of pages. In 2009, The Chicago Tribune slashed 80 of its 578 newsroom jobs and cut the number of pages of the newspaper after confessing their fall in advertisement revenue of 30% and filing for bankruptcy. The Gannett Company, which owns the largest newspaper chain in the United States, publicly stated that their advertisement revenue was down by 30 percent The U.S. circulation in 2007 fell 3% between 2002 and 2007 alone, and the circulation has declined 8% in the United States. Europe faced the decrease of paid circulation of 1.9%. Interestingly enough, however, global newspaper circulation is increasing due to the high demand in Asia and South America. In 2009, African paid-for daily newspaper circulation rose 30% from 2004 to 2009, followed by 13% in Asia and 5% in South America . Worldwide circulation in 2007 rose 2.6% with noticeably high demand in India and China with 107 million copies sold daily. The World Association of Newspapers gathered average circulation rates in 2008 and out of the top 100 paid-for newspapers, Asian countries such as China, Japan, and India are the three countries with the largest number of newspapers with 62 in the list.

Public Funding and Governmental Support

Positive Aspects: Financial Contributions and Reliability

AAlthough many speak against publicly funded news media, people do not realize their pre-exposure and the importance of the publicly-funded news media. Alan Rusbridger, The Guardian’s editor-in-chief, warned that “[t]here is going to be a great shaking out in the next 20 years – there will be fewer big media organizations. The people who are doing serious journalism have to accept that that is not sustainable.” The business of quality journalism will require subsidy and, therefore, subsidies are inevitable.

In Canada, the government annually funds non-daily newspapers and magazine publications of the Canadian Community Newspaper Association through the Canadian Periodical Fund (CPF). The funding comes after the process of CPF's thorough review of three components: aid to publishers, collective initiatives, and business innovation [1]. After approval comes the financial assistance helps the minority papers to continue providing a wide variety of readership selections in Canada. In 2010, 11 non-daily newspapers and magazine publications received governmental funding, which allowed them to invest in “a variety of aspects of their newspaper production process from marketing to training to developing online and digital platforms and resources."

Norway also runs a similar state subsidy called press support which is performed in direct and indirect forms. In 1965, Norway was experiencing the downturn of newspaper circulation and the control of politically bias forces, the Norwegian Media Authority provided financial assistance to many minority newspapers, including Bergensavisen (Bergen), Rogalands Avis (Stavanger), and Dagsavisen (Oslo). The qualification of the recipients varied; the receivers were the national newspapers of which targeted special (often political) sectors. The Norwegian Media Authority continues to help 138 papers with NOK 303 million as of 2006. In 2005, Dagsavisen became the most benefitted recipient of the system by receiving NOK 40,992,586, followed by Bergensavisen (NOK 32,256,115), and Vårt Land (NOK 31,683,024). These outlets are indirectly supported by the exemption of sales tax. The goal in both cases is to provide a variety of perspectives from different newspapers, to stimulate public debate and consciousness, democracy, freedom of speech, and to enable the media to act as society’s watch-dog. VG became the largest indirect press support of NOK 215,000,000 followed by Aftenposten of 126,000,000 and Dagbladet of NOK 121,000,000 .

On the other hand, as newspaper corporations are faced with bankruptcy, some newspapers create their attachment to their government in order to invest in the future readership. In 2009, the Korean Association of Newspapers (한국신문협회) introduced a program named "Newspaper In Education" (NIE in short) which promises to spend $35,000,000 on free newspaper subscriptions to young student readers and NIE related work. The chief purpose of this act was to invest in readership of future generation in the hopes of seeing the growth in circulation among the younger generation.

France has also taken the action of investing on the younger readership. The French government in 2011 provided 210,000 free newspaper subscriptions to young adults of age 18 to 24 to save the country's news media These processes led both the government and newspaper industries to achieve a win-win strategy as the government encouraged the rise of literacy among young adults and newspaper industries succeeded in obtaining a stable number of subscriptions, which will eventually promise more student-related advertisement revenues.

American journalism is not just the product of the free market, but of a hybrid system of private enterprise and public support. By the middle of the last century, daily newspapers were becoming natural monopolies in cities and communities across the country.

Negative Aspects: Loss of Political Independence and Freedom of Expression

"Freedom of the press is guaranteed only to those who own one." -- A.J. Liebling, American press critic (1904-1963)

Public and governmental sponsorship may lead the newspaper corporations to prosperity and wealth. However, such support may also lead the papers to become what Clarity Media Group, Inc. calls “governmental toadies”. Public subsidies can lead to potential partiality and bias as factors that can prevent from the progressive step towards the independence of the medium. Instead of pursuing their main purpose of delivering accurate and unbiased information, government-supported newspapers may end up taking positions on legislation or endorsing candidates. The prevention of journalistic freedom may sway the sponsored newspapers not to write against governmental wrongdoings, delivering false and biased information to their faithful readers.

Canada

Nick Fillmore of Canada referred to the violation against democracy and freedom of expression with the term "neoliberalism". His definition of neoliberalism asserts that "Big mass-media corporations [in Canada], such as CTVglobemedia, Postmedia Network, and Woodbridge Company, which owns The Globe and Mail, have aligned themselves with the right wing of the business community and Stephen Harper's government". By this definition of neoliberalism, he denoted that Canadian mainstream journalists do not have the freedom of expression in political and economical flaws in Canadian system. Thus, what Fillmore claimed to happen is that the media gave the Harper Conservatives advantages over other parties. If money functions to sugarcoat the truth, if money functions to take away the pen of the editors, and if money functions to blind the readers from political and economical issues, newspapers cannot maintain their fundamental principle and ethical practices. When newspaper corporations lose such political and journalistic freedom and independence, they are also losing the purpose of their business.

The National Post became one astonishing example of such flaws of loss of political independence and freedom of speech. Due to their financial loss, the Post was sold to Canwest Global Communications Corporation controlled by Israel Asper in 2001. Since Asper’s acquisition of the National Post, the paper spoke in favour of the Liberal Party of Canada and the state of Israel and its government. Considering the fact that Izzy Asper was once the leader of the Liberal Party in Manitoba, this event still marks the political influence of public support.

Sweden

The Swedish press is another example of the government-subsidized media through press support. The Party’s press support was generally given to the papers of the equivalent political belief. However, contemporary subsidies became more direct and tied to self-requirements [2]. However, media in Sweden became the common example when it comes to the negative aspects of the power-controlled media: oppression of political freedom and infusion of political biases. During the yearly surveys of The Department of Journalism and Mass Communication (JMG) at Gothenburg University, the research of political sympathies showed the Swedish Union of Journalists to support the Left Party, the most significant form of which followed the Green Party.

The United States

Public funding for the press in American culture still stirs unease due to the limit to the capability of speaking truth to power. During 2009 inforum of "Newspapers are Dead. Now What?", Phil Bronstein, the guest speaker and the executive editor of San Francisco Chronicle, brought a cautionary notion about public financing, especially government financing. He mentioned that the "government is the most powerful institution [news media] cover and I really don't even in particular want them thinking they can tell us what to do in terms of how we cover them."

The Virginia Tech Commission on Student Affairs’threat to cut newspaper funding in 2010 exemplifies the consequence of an oligopoly. While irresponsibility of comments and false victimization came as problematic factors, the reduction of the entire funding ironically became a solution to prevail against the battle of anonymous online posts. Therefore, the commission has led its parent organization to withhold an annual contribution of $70,000 . The Virginia Tech’s reduction still became a remarkable incident which marked a potential violation of the freedom of expression of the professional field.

To take an example from broadcasting media, the House of Congress Republicans proposed to rescind public funding for liberal-leaning and financially-struggling broadcast operations such as NPR and Public Broadcasting Service in November 2010 and again in February 2011. In 2005, a House subcommittee had a vote to cut CPB funding and to strip down all within two years. President Barak Obama in November 2010 also agreed upon eliminating funding for CPB in order to save $500 million in 2015. Christopher Sterling, a professor of media and public affairs and public policy at George Washington University mentioned that “Republicans have never been fond of public broadcasting. Republicans have always thought that public broadcasting across the board is liberal, is not particularly supportive of Republican and conservative point of view[…] Democrats tend not to think that, unless they’re from very conservative districts.”

Charitable Funds

Positive Aspects: Security of Journalistic Freedom Without Threatening or Limiting Political Freedom

Another possibility to secure the journalistic freedom would be the provision of charitable funds. For instance, England’s The Scott Trust Limited has been a charitable foundation of The Guardian Media Group prior to changing its form of a trust to a limited company in 2008. Previous to the closure of its 72 years of legacy and structure as a trust, the original objectives of this non-charitable trust were well-respected. Likewise, charitable funds strive to maintain journalistic freedom and editorial independence .

The Iowa Newspaper Foundation is another example of a newspaper foundation that has a partnership between Iowa's daily and weekly newspapers. With its financial support, paid circulation can benefit from improving the quality and the future of the newspaper enterprises and serve to raise funds to fulfill their mission. The Arkansas Newspaper Foundation (ANF) is also the non-profit educational charity of which provides 29 daily newspapers, eight semi-weekly newspapers and 103 weekly newspapers across the state. As the oldest professional association in the state, the motto of "Free Press, Free People" continues to be achieved through their protection of basic freedoms of press, speech and of the Freedom of Information Act (FOIA) .

Instead of supporting newspaper, The Pew Charitable Trusts is also a noticeable example of a charitable foundation which provides grant for The Society of American Business Editors and Writers. Like The Scott Trust, it supported the institute which works with journalists to improve knowledge and freedom of political aspects in non-for profit organization form.Therefore, newspapers benefit from charitable funds as they are liberated from political restrictions or threats that exist for the government-subsidized newspapers.

Negative Aspects: The Unexpected Rate of Economic Downturn

However, The Scott Trust, like other non-profit trusts, and unlike limited companies, faced the threat of its lifespan in 2008 due to the threatening financial condition. Therefore, the Trustees of the Scott Trust believed that the only way of not contravening contemporary purpose but to continue on to “securing […] the independence of the Guardian in perpetuity” can only be possible only when the Trustees restructure its constitution of The Scott Trust. Therefore, The Scott Trust became The Scott Trust Limited, while still preserving its core objective to secure the independence of the Guardian, announced the sale of its GMG Regional Media and its regional print title to the Trinity Mirror Group on March 28 2010.

Future of the Newspapers

Newspaper has competed and survived despite the invention and emergence of digital technology and, most significantly, Internet. However, scholars and analysts see a negative future for paper journalism. As the recession of paid circulation deteriorates, newspaper advertising is sharply dropping in its worst slump since the Depression. Therefore, the future for this media, as John Ibbitson from Globe and Mail predicted in his column "Extra, Extra, Read All About It - or, Sadly, Not" is very pessimistic. It is more realistic to say that governmental support is the most reliable source of sustaining newspaper institutions. However, if a newspaper corporation succumbs to the government's suppression of journalistic freedom, the question of its existence is worthless to consider because it is losing its fundamental purpose and principle of providing truthful and unbiased information.