What’s gone so horribly wrong with the newspaper business?

Many believe the answer is simple, profound and inescapable:the Web.

As Print Slept, the Web Became Its Nightmare
Newspaper executives, many analysts argue, just don’t understand the disruptive effect of the Web on their business and as a result have jeopardized the future of their papers, their companies and the investments of their shareholders. Others take a more nuanced view, claiming the newspaper industry’s response to the Web is typical of any mature industry confronted by a new, disruptive technology. That is, the newspaper lords knew it was important; they just didn’t know how to incorporate it into what is, in the United States, a 300-year-old business model. With pressure from stockholders and investors, publishers worried about the bottom line for the coming quarter or year, not about what might happen in five years.

“It was rational self-interest,” says Phillip Meyer, a journalism professor at the University of North Carolina who has studied how newspapers have been affected by new Internet technologies. “If their goal was to maximize return on investment, then sticking to [print] and avoiding high-risk [Internet] investments made sense,” he says.

Despite the pessimism of those who tally the mergers, layoffs and tanking stocks in the newspaper business, some experts believe newspapers can be saved by using the Web to reinvent themselves and thereby retain their role as a vital institution in American society. If they fail, and newspapers begin to fold with the great rapidity many expect, the loss to the American polity will be incalculable. In either case, there will be some valuable lessons other businesses can learn about dealing with disruptive technologies: principally, that one’s customer base and competition can change overnight, and a failure to prepare for that change can have catastrophic consequences.

Mistakes Were Made
Jennifer Carroll, vice president of new media for Gannett—America’s largest newspaper publisher, with 90 titles, including USA Today—has been working in the industry since 1981. She got her start as a reporter at the Port Huron Times in Michigan. Climbing the editorial ranks, she became managing editor of the Detroit News in 1997, a period remembered as critical (and ultimately regrettable) in the history of American newspapers. With the dotcom bubble in its infancy and acknowledging the importance of establishing an online presence, Gannett and its competitors began putting their papers online—the news stories, the features, the comics and the classifieds. It was a newspaper you could view in a browser and little more.