As news came in this morning that the New York Times Company's earnings fell 48 percent in the fourth quarter of 2008, and it web profits took a drop for the first time ever, the Times ran another in an increasingly tedious line of editorials about how to save the industry. It's written by Yale CIO David Swensen and Yale financial analyst Michael Schmidt.
It begins ominously enough:
Today, we are dangerously close to having a government without newspapers. American newspapers shoulder the burden of considerable indebtedness with little cash on hand, as their profit margins have diminished or disappeared. Readers turn increasingly to the Internet for information -- even though the Internet has the potential to be, in the words of the chief executive of Google, Eric Schmidt, "a cesspool" of false information. If Jefferson was right that a well-informed citizenry is the foundation of our democracy, then newspapers must be saved.
But here's the kicker, make them non-profit 501c3's:
As long as newspapers remain for-profit enterprises, they will find no refuge from their financial problems. The advertising revenues that newspaper Web sites generate are not enough to sustain robust news coverage. Though The New York Times Web site attracted 20 million unique users in October, Web-driven revenues support only an estimated 20 percent of the paper's current staff.
...
By endowing our most valued sources of news we would free them from the strictures of an obsolete business model and offer them a permanent place in society, like that of America's colleges and universities. Endowments would transform newspapers into unshakable fixtures of American life, with greater stability and enhanced independence that would allow them to serve the public good more effectively.
VoiceofSanDiego.org has tried the non-profit model, with fantastic results.
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