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February 18, 2013 10:15 PM

Newspapers At A Crossroads

Sioux Falls, SD

The Internet's ability to provide information instantly has hit newspapers harder than any other media business.  As millions get their news online, newspaper circulation is diminishing and thousands of jobs at newspapers across the country have been cut.  And as newspapers scramble to make money online, the revenue just isn't there to make up for it.

This corner of the senior center with the newspaper is a popular place.  75-year-old Rodney Hakl has been reading the paper as long as he can remember.

"You got it right in front of  you.  You can turn the pages.  It's the way it used to be. I'm kind of old fashioned you know.  I like to read the paper," Hakl said.

These older folks make up 30 percent of the population that still reads newspapers, nearly half of what it was two decades ago according to the Pew Research Center. 

"I am not going to be the one to pronounce it dead.  But it's a big concern.  For people in the industry, when you talk to them, they're in a situation where their primary product is not the one people prefer anymore," Journalism Professor Matthew Cecil said

Because as probably no one has to tell you, the instant gratification of getting information online is what many people now prefer. 

"I hold my iPad now. I have my cup of coffee and I read through the news and I can do it anytime and I don't have to dispose of anything. I'm not using paper. This is just more convenient all throughout the day. I can take my iPhone and read global news at any time and I can be updated to the minute. Whereas the newspaper, it's a daily newspaper," Dan Kuik said.

"It's no surprise that people prefer this instantaneous information; having access to everything.  Newspapers, I think, were slow to realize that was where their next business model is going to appear; where they were going to move.  I'm sad to say that newspapers were doing very well in 80's and 90's and they didn't plan ahead," Cecil said.

Angela Kennecke: Do you think that's true?
Argus Leader Publisher Randell Beck: Oh probably. Yeah, I do.  It's a good lesson and all of media I would say.  While we're transitioning and transforming, are undergoing a certain measure of introspection, shouldn't we have seen the Internet coming in a faster way that helps us understand how the world is going to be revolutionized?  Nobody did.

The Sioux Falls Argus Leader has seen the daily circulation of its printed paper drop by 42 percent in the last six years and has lost some 70,000 print readers.  Yet Beck says 80 percent of the Argus Leader's revenue comes from the printed paper.

Beck: About 20 percent of our revenue is digital revenue and it's growing.
Kennecke: So you're counting on that?  
Beck: Absolutely.  Our strategy is built on that.  Absolutely. I have no reason to think that's not working.

Last year, the Argus Leader put a paywall in place and started charging customers to read the online version of the paper and other content.  Now Beck says, with the website, it's actually reaching more people in Sioux Falls. 

"One of the things we did was draw a line in the sand. We aren't going to sell our content here and give it away over here. That's not a sustainable business model," Beck said.

Newspapers like the Argus must now wait to see if their paywalls work over the long term and if they can increase revenue from digital advertising

"It's one thing if you can wait for it to mature if you have a strong product to fall back on.  Unfortunately, their product is struggling while they wait for that business model to mature," Cecil said.

Beck says his large reporting staff and the content it provides will drive subscribers to pay for it.  But he says even with a growing focus online, print isn't dead.

"Print will remain a very powerful part of what we do.  We're growing because of what the Internet enables us to do," Beck said.

"It has to end. It has to end at some point. People are romantic and nostalgic, 'Oh, I love picking up that paper in the morning.'  That's fine, but if you talk to my students, they're not nostalgic about that. They don't miss that. They want it delivered to their mobile device. They want it on their computer. They want access where ever they are and they do not pick up a print newspaper," Cecil said.

There is one area of newsprint that isn't hurting.  The small-town paper is still doing well in terms of circulation.  There are 130 newspapers in South Dakota and a majority of those are in small communities.

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