USC Annenberg executive in residence David Westphal said today on the public radio program Marketplace the debt of companies that own major metro newspapers is the reason they are in trouble.
Anchor Kai Ryssdal interviewed Westphal, also a senior fellow of USC Annenberg's Center on Communication Leadership & Policy, about the economic challenges facing the newspaper industry and new business models that are emerging.
“There are 1,400 daily newspapers in the United States. I would guess the large majority of them are actually doing all right,” said Westphal. “They're being hurt by the recession, they're being hurt by the Internet, but they're still making pretty decent profits. But the major metros, and especially the ones that borrowed billions of dollars to expand, are the ones that are in real trouble now."
"A lot of people make the good point that the public's demand for news and information has really gone up — not down or stayed the same; it's gone up. The problem is that there is not, as you say, a business model around the next bend that we can look at and say with confidence, "Oh, I can see where the money's going to come from."
Ryssdal later asked Westphal about different revenue models.
"Well, I'm at a point where I'd like to see any idea float around because I think it's impossible to know," Westphal said. "I do think philanthropy might well be involved. And if we think about a metropolitan area that has multiple news sources, not just one big one, a philanthropist might very well endow an investigative reporting operation, or endow a science reporting operation. But, again, I think it's smart at this point to put everything on the table."
