First it was the banking industry, then it was the auto industry. Could the newspaper industry be next to receive a government bailout?
In an interview with the Pittsburgh Post-Gazette and The Toledo Blade Friday, President Obama said he hopes newspapers can find a way out of their financial crisis.
Several bills have been introduced in Congress to boost the newspaper sector, including a Senate proposal that would allow newspaper companies to reformulate themselves as nonprofits with a variety of tax breaks.
The Blade reported that Obama was noncommittal about the legislation saying, "I haven't seen detailed proposals yet, but I'll be happy to look at them."
Newspaper profits have plunged as readers and advertisers abandon the paper product in favor of the Internet. But newspaper companies have found it difficult to gain much revenue from online subscriptions and advertising.
Major papers in Los Angeles, Philadelphia, and Chicago have declared bankruptcy, and Denver’s Rocky Mountain News has folded all together.
Obama said, "I am concerned that if the direction of the news is all blogosphere, all opinions, with no serious fact-checking, no serious attempts to put stories in context, that what you will end up getting is people shouting at each other across the void but not a lot of mutual understanding."
As the Internet has exploded in growth over the past decade, most newspaper companies believed they had to give their product away to draw readers and advertisers.
Now the industry is starting to reconsider.
Obama apparently agrees. "What I hope is that people start understanding if you're getting your newspaper over the Internet, that's not free and there's got to be a way to find a business model that supports that," he said.
Meanwhile, the industry’s struggles continue. The New York Times reports that industry experts expect ad revenue to show a plunge of 25 percent in the quarter ending Sept. 30 from the year-earlier period.
“Newspapers will be the last media to get any ad comeback,” Roberta Garfinkle, director of print strategy at TargetCast TCM, told The Times.
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