This, I did not expect. I’ve been following the crisis of the newspaper industry closely and have many suggestions, which I’ve discussed here.  A new suggestion has come to my attention from a 1918 Atlantic Monthly article claiming the death of newspapers. As history shows, this was a little premature.

Oswald Villard found daily newspapers had rising costs and rarely, if ever, any profit.  He writes:

It is a fact, too, that there are few other fields of enterprise in which so many unprofitable enterprises are maintained. There is one penny daily in New York which has not paid a cent to its owners in twenty years; during that time its income has met its expenses only once. Another of our New York dailies loses between four and five hundred thousand dollars a year, if well-founded report is correct, but the deficit is cheerfully met each year. It may be safely stated that scarcely half of our New York morning and evening newspapers return an adequate profit.

That $500,000 loss compared to $7 million in today’s dollars (according to Slate), which pales in comparison to the $85 million the Boston Globe expects to lose this year alone. But Villard highlights the unique business model many newspapers used to support.  He claims owners were willing to accept losses in their newspapers because of the prestige of owning one.  Slate puts it: “A newspaper owner gets a place at every table, access to all the top politicians’ ears, and the power to impose his worldview on his readers—or, at least, the illusion of such influence.”

Few businessmen are willing to make such expensive vanity purchases (Slate makes some notable exceptions, like Rupert Murdoch’s New York Post or Mortimer Zuckerman’s New York Daily News).  Of course, stock markets, quarterly reporters, and multi-billion dollar sales turned the newspaper business into a profit boon for the 80s and 90s with few expecting the bubble to burst.

For naysayers predicting the demise of democracy should newspapers all disappear (unlikely), the vanity business model represents only one of many, many options to develop news and other businesses. I doubt this trend will take the business world by storm, but the history lesson is worth noting – business isn’t always about money. There’s power and influence too. I’ve been a proponent of the value of self-promotion (like this blog), but maybe even multi-billion dollar corporations have a place in a vanity portfolio.