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P-G layoffs a sign of things to come

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When college students ask my career advice -- and of course given my station in life, they do so constantly -- I urge them to stay out of journalism entirely. I suggest they pursue careers in industries like auto-manufacturing and hedge-fund management instead.

"You won't be successful," I say. "But with luck, you can become 'too big to fail.' Which is what the American Dream is all about."

And newspapers clearly are not too large to fail.

Case in point: The Pittsburgh Post-Gazette recently announced that roughly two dozen of its staffers had accepted buyouts -- including some of its best-known writers. In the next breath, the paper increased its newsstand price, from 50 cents to 75, even as it seeks to pare its ranks further.

On its face, "fewer writers/higher price" may not seem like a great business plan. (Although I, for one, would pay a dollar an issue if the paper got rid of columnist Jack Kelly next.) But that's the least of the economic contortions newspapers have been making. Like most other newspapers, the P-G has invested heavily in the Internet, providing blogs and multimedia technology. The industry has spent a lot of energy and money chasing customers who don't pay anything in return. Because in a few years, we think those will be the only customers we have.

This is usually the point where the columnist denounces a paper's management mistakes. But if its managers had a great head for business, they wouldn't be in journalism at all. Anyway, their Internet strategy isn't the problem. Neither is the Internet itself. The problem is the false expectations the Internet creates.

Years after the Internet bubble popped, newspaper owners may be the last people hoping to get rich online. And the people who read newspaper Web sites may be the only Americans who still believe in the free lunch. Our economy is imploding under the myth that you can get something for nothing ... but we still expect to read about the disaster for free.

For reasons too dull to get into, online ads generate much less revenue than print ads. Which means that you can read a paper online for free only because a lot of other people don't. They pick up the print edition, where they see the ads that generate the real money, which is what pays the reporters you depend on.

Everyone agrees that the Internet represents the future, but all those great newspaper Web sites are subsidized by the past -- a subscriber base for the print edition which is slowly dying off.

Meanwhile, as newspapers seek new revenues, we print-consumers are being forced to put up with a bunch of outrages. Recently the P-G reduced itself to distributing an anti-Muslim DVD with home-delivered print editions. And the day before the presidential election, it wrapped up its papers in a plastic sack emblazoned with an NRA ad urging us to "defeat Obama." Some friends of mine rolled their eyes at this and muttered, "Thank God, I only look at the paper online." But of course, they're part of the problem.

David Carr, The New York Times media columnist, recently argued that in newspapers, "There are signs that the free ride for [online] consumers may be coming to an end." He noted that one of the few publications making money is a small New Jersey paper with no Web presence at all. ("Why should we give our readers any incentive ... to not look at our content along with our advertisements?" the paper's editor asked.)

Sooner or later, we're going to have to address the essential problem: New technology has divorced the people who consume content from those who pay for it. I don't know what the new model is going to be. Perhaps we'll have to turn daily news-gathering into a nonprofit enterprise -- as opposed to one that just loses money. Or maybe we'll just give up and let bloggers cover the school board.

So far, the P-G has been lucky: It serves an older population and thus has a larger subscriber base. And from all accounts, its Web site gets a disproportionate amount of traffic, thanks to the Steelers fans and expatriates out there. But if the fears I hear from inside the newsroom are warranted, the recent buyouts may only be the beginning. In any case, the current model can't last.

Now if you'll excuse me, I have a blog post to write.

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