Dont' miss the last two paras.
How a new communications technology disrupted America's newspaper industry in 1845
CHANGE is in the air. A new communications technology threatens a dramatic upheaval in America's newspaper industry, disrupting the business model that has served the industry for years. This "great revolution", warns one editor, will mean that some publications "must submit to destiny, and go out of existence." With many American papers declaring bankruptcy in the past few months, their readers and advertisers
lured away by cheaper alternatives on the internet, this doom-laden prediction sounds familiar. But it was in fact made in May 1845, when the revolutionary technology of the day was not the internet — but the electric telegraph.
It was only a year earlier, in May 1844, that Samuel Morse had connected Washington, DC, and Baltimore by wire. As a network of wires spread across the country, it was obvious that this new technology was going to have a huge impact on the newspaper industry. But would the telegraph be friend or foe?
James Gordon Bennett, the editor of the New York Herald and author of the gloomy prediction of May 1845, concluded that the telegraph would put many newspapers out of business. "All those papers which serve merely as vehicles of intelligence will be destroyed," he declared.
In the early 1800s newspapers were astonishingly slow. Foreign news, if any, was usually several weeks old. Things began to change in the late 1820s as two New York papers, the Journal of Commerce and the Courier and Enquirer, began to compete for business readers. Both started to use pony expresses to deliver news from other cities, and fast boats to meet incoming vessels and get foreign news a few hours early.
The telegraph, it seemed, would put an end to this productive rivalry. Papers would be unable to compete. Circulation would decline and advertisers would flee. The democratisation of news would be undone.
It seemed that the only way to survive was to offer analysis and opinion. A reshaping of the entire industry appeared to be imminent.
Not such bad news after all
The telegraph did indeed reshape the newspaper industry, but not in the way as had been predicted. For although telegraph wires could deliver news more rapidly than ever, they had a "last mile" problem: they could not disseminate news quickly to thousands of people. Only printed newspapers could do that. Far from putting papers out of business, the telegraph actually made them more attractive and increased their sales.
What of the fears that telegraph companies would establish a monopoly over news? These too proved to be unfounded: there were one or two attempts by telegraph companies to set up news services, but telegraph operators made pretty hopeless journalists. Instead, the newspapers themselves took control of delivering news over the wires, with the formation of the Associated Press. It grew out of a scheme, established in 1846, to share the costs of reporting on the Mexican war between several New York papers.
What lessons does the telegraph hold for newspapers now grappling with the internet? The telegraph was first seen as a threat to papers, but was then co-opted and turned to their advantage.
Today, papers are doing their best to co-opt the internet. They have launched online editions, set up blogs and encouraged dialogue with readers. Again there is talk of news being commoditised and of the need to focus on analysis and opinion. And again there are predictions of the death of the newspaper, with hand-wringing about its implications for democracy.
The internet may kill newspapers; but it is not clear if that matters. For society, what matters is that people should have access to news, not that it should be delivered through any particular medium; and, for the consumer, the faster it travels, the better. The telegraph hastened the speed at which news was disseminated. So does the internet. Those in the news business use the new technology at every stage of newsgathering and distribution. A move to electronic distribution—through PCs, mobile phones and e-readers—has started. It seems likely only to accelerate.
The trouble is that nobody knows how to make money in the new environment. That raises questions about how much news will be gathered. But there is no sign of falling demand for news, and technology has cut the cost of collecting and distributing it, so the supply is likely to increase. The internet is shaking up the news business, as the telegraph did; in the same way, mankind will be better informed about his fellow humans than before. If paper editions die, Bennett's prediction that communications technology would be the death of newspapers will be belatedly proved right. But that is not the same as the death of news.