The Bill for the News

10/24/2016 - 15h13

One of the most widely read newspapers in the world announced on Wednesday (19): "In the next few weeks, we will launch a revamped version of our print edition. The new product will be a livelier, sharper and more concise newspaper ... It will also present a more coherent organization of our coverage in print, and will involve some consolidation of sections of the paper and the teams that produce it."

The "Wall Street Journal" (WSJ) is the largest circulation newspaper in the United States. Out of a total circulation of 2,3 million, 60% is from the paper edition. In addition to the revamping of the newspaper, a program for voluntary layoffs/buyouts was announced.

"The New York Times" and "El País" had already announced changes, as always in the direction of digital journalism with resized content and smaller paper editions.

2016 is proving to be a difficult year for newspapers all over the world. With an accelerated fall in revenue from advertising, the first semester turned out to be very gloomy. Forecasts for the year as a whole are for the largest drop since the crisis of 2009.

Such announcements of changes sound familiar to Folha readers. The crisis in the communication sector in Brazil started some years ago with the decline in advertising.

2010 was still a good year, especially due to the real estate market. The majority of advertising revenue for print media comes from real estate, automotive and retailing.

These sectors were strongly impacted by the general Brazilian economic crisis which worsened the situation for the major journalistic companies as their financial statements testify.

Folha closed out 2015 with net revenue of R$526 million (US$ 162 million) and net profit of R$ 2,6 million (US$ 1,16 million). Although contraction from the crisis is even greater, the forecast for 2016 is to end the year in the black.

Staff has been reduced, expenses for paper were cut, and editorial content was remodeled in the urgent race against a shrinking budget.

The scenario wasn't rosy for Folha, but it turned out to be even worse for its direct competitors.

"O Estado de S. Paulo" closed out 2015 with net revenue of R$ 440 million (US$ 135,38 million) and a net loss of R$ 3 million (US$ 923 thousand). The company that publishes "O Globo" had revenues of R$ 667 million (US$ 205 million) and a loss of R$51,5 million (US$ 15,9 million). Nothing indicates that 2016 will be any better.

Pressure has increased for a faster expansion in digital revenue, an area dominated by powerful organizations like Google and Facebook.

As the WSJ has defined, the time is now to accelerate changes in the newspaper business model. "The news companies that survive and prosper in this evolving environment will be those that operate most efficiently in the production of news on all platforms that readers want and demand."

Why is Folha's ombudsman dedicating herself to this theme? Because it speaks to you, the reader, and the society in which we live, one that doesn't accept attempts to justify failures or compromise quality. The reader continues paying, has rights, and should demand that the newspaper continuously gets better.

Since I took the position of ombudsman at Folha six months ago, not a week has gone by that I haven't received a message from a reader lamenting the cutting of a section or protesting against the reduction of space.

"I have been watching Folha plummet, be it in the number of sections, pages, the quality of the comics, the horoscopes, but, especially, with some due and respectable exceptions, in journalistic, analytical and opinion content", wrote one of the most severe reader-critics.

Not only in the future, the reality for the press now is that it already is being consumed across multi-platforms, and the tendency for the print version is to have its space more and more reduced.

It is essential to know how to rank and prioritize -news, resources, personnel, editorial space. Newspapers must be reestablished and remolded, making their publication sustainable.

The central question is in finding a business model capable of providing for an independent publication with a critical investigative capacity, summarized Caio Túlio Costa, a specialist in researching the future of communication media and the newspaper's first ombudsman.

The solution isn't easy to find. Organizations all over the world are looking for the formula for success. My impression is that Brazilian newspapers are falling behind the times and reacting to events. Cutting personnel and editorial space appears to be only responding to momentary issues of cash flow. This hasn't been, isn't being and won't be enough.

The essential problem is simple to summarize but difficult to resolve: how to finance quality journalism which is so essential for democracy? What is the reader willing to pay and for what kind of journalism? How to find alternative financing to the massive migration of advertising to other media? How to react to such challenges while still worrying about tomorrow's edition?

It's not only knowing who will pay the bill. You, the reader, are at the center of all of these questions. And of the answers as well.

Translated by LLOYD HARDER

Read the article in the original language