Cantwell: Newspaper Industry Must Adapt Its Business Model
During Subcommittee Hearing on Future of Journalism, Cantwell Stresses That for Industry to Survive, It Will Have to Adapt to a New Economy
WASHINGTON, DC – During a Senate Commerce Subcommittee hearing held today on the “Future of Journalism,” U.S. Senator Maria Cantwell (D-WA) stressed that while newspapers are still a vital industry, if they’re going to survive and compete in a global, 21st century economy, they are going to have to adapt their business model. Also during the hearing, Cantwell reiterated her support for legislation that would allow for a five-year carry back of net operation loss for businesses of all sizes.
“Over the past few months, Washington state’s newspapers have struggled with falling ad revenues, online news sources, and a lagging economy,” said Cantwell. “We have seen the Seattle PI cease operations after 150 years of delivering the news. The Vancouver Columbian has filed for bankruptcy. And, the Seattle Times has had to make drastic cutbacks. If the newspaper industry is going to survive, it is going to have to adapt its business model to compete in this current economic climate.”
Cantwell is a co-sponsor of legislation introduced by Senators Olympia Snowe (R-ME) and Max Baucus (D-MT) that would allow a five-year carryback of net operating losses incurred in 2008 and 2009 and could be used by the newspaper industry.
Senator Cantwell’s opening statement, as prepared for delivery, is below:
“Mr. Chairman, thank you for holding this important hearing. “In 1997, a group sponsored by the Pew Project for Excellence in Journalism held two years of public forums to identify and clarify the principles that underlie journalism.
“They concluded “the central purpose of journalism is to provide citizens with accurate and reliable information they need to function in a free society.”
“Unfortunately, newspapers’ current business model won’t sustain the industry so that they can provide us with accurate and reliable information.
“I know the way I prefer to obtain my news has changed over the years. Now I see it as being similar to how I obtain digital entertainment. It is what I want, when I want it, where I want it, and the format I want it in.
“I see the challenges facing the newspaper industry as partly structural, partly a reflection of our current economy, and in some instances, self-inflicted. And as with all industries, successful companies can develop viable business models that evolve over time to profitably meet customer needs.
“Most of us on the Committee have newspapers in our states that are in trouble. In Washington state, the Seattle P.I. ceased print operations after 150 years and is now only available on- line; the Vancouver Columbian has declared bankruptcy; and the Seattle Times has had to make significant cuts.
“Clearly, newspapers need to adapt their business model. And I look forward to hearing the views of the panel.
“Government can buy the industry a little more time by passing legislation on some temporary tax relief.
“But I want to make it clear that the fix to the newspaper industry’s financial difficulties is not to further relax the media cross ownership ban.
“I would like to include a statement by Mr. Frank Blethen, the owner of the Seattle Times for the record.
“Thank you.”
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