Paper 1 – The Penny Press in America
In this term project, I would like to study the Penny Press in the United States, and compare their impact on the practice of journalism to the current wave of online newspapers and blogs, especially those that have been launched in the Seattle area. How were the Penny papers organized and monetized and what caused their ultimate demise? Are there any parallels to the decline of metropolitan daily newspapers in America today? This study will also discuss the current state of the newspaper business in the US, the impact of technology and changing public tastes on the consumption of news, and the rise of citizen journalism.
And finally, I will attempt to look at the future of news gathering and consumption as our population embraces digital technologies in more and more aspects of daily life. Are there messages in the early days of American newspaper journalism that will inform the current situation? Does history repeat itself?
Beginnings of the penny press – several theories
American newspapers have gone through more than one amazing transformation since they arose with the new Nation. In the early 1800s, newspapers were largely for the elite and took two forms – mercantile sheets that were intended for the business community and contained ship schedules, wholesale product prices, advertisements and some stale foreign news, and political newspapers that were controlled by political parties or their editors as a means of sharing their views with elite stakeholders. Journalists reported the party line and editorialized in favor of party positions. Newspapers also contained a bit of last month’s news. (Thompson)
Advent of the steam-powered press and the telegraph, coupled with a relatively robust economy and rising literacy gave rise to newspapers that could both expand their size and reduce their price, thereby becoming more accessible to the burgeoning population of the major cities. Brian Winston might term this a “supervening social necessity” that arose from the “subjective whims of perceived needs” as social circumstances propelled a new technology that fulfilled almost the same function as the former.”(1998) In this case, the primary accelerator was price. Consumers were attracted to these new market entries that cost a penny – significantly less than the $10 annual subscriptions being charged by the dominant newspapers. And so, a new genre of newspapers was born – the “penny press”. New York was a hotbed of innovation and launched the New York Sun, the Herald, the Tribune and the New York Times (1851) Edward W. Scripps began to build a newspaper empire in the smaller cities about a decade later.
Historians argue about the exact roots of the penny press, and several theories have arisen. John Nerone and Donald Shaw had a rousing disagreement on the impact of the penny press, played out in the academic journals in the 1980s. Nerone argues that the penny press was not the primary catalyst for the “modernization” of newspapers in the United States. His stance is that the “ingredients of modernization – expanded circulation, market orientation, division of labor, new technology, corporate ownership and the establishment of property rights in the news were not a result of the penny press formula. And that these innovations didn’t arise until the arrival of William Randolph Hearst and Joseph Pulitzer who used their New York platform to create papers that led the national scene as well. (1987) Shaw takes issue with Nerone’s arguments on the power of the New York publishers, and argues that the penny papers “played to a popular audience, enlarged public perspective on what constituted news, and circulated widely among urban audiences.” He further argues that these papers “democratized news and that steam-driven presses produced one of the young nation’s first mass-produced products, newspapers.” (1987)
Another set of theories explored by sociologist Michael Schurdson has applicability in light of some of our other readings and discussions. Development of the American newspaper has roots in both social and business theories. Schurdson discusses three theories (Marketplace, Technological and Literary) that will be evaluated here with regard to the penny press, and later as they apply to the development of online news and the potential demise of print newspapers.
The Marketplace theory
Schurdson’s first class of development theory has to do with the impact of penny papers on the marketplace. Several other researchers support his theoretical construct. Susan Thompson defines the penny papers as follows:
“Penny newspapers were a particular class of metropolitan daily that sold for a cent or two or a picayune (the Spanish equivalent of six cents), depending on their location, but were always less than their counterparts.” (Thompson, 3)
The penny papers were owned by competitive early adopters who could see the value in mass producing a newspaper that could be read by all classes of society. The penny press introduced several innovations to the gathering and reporting of news. First, they broke away from their partisan roots to “gather objective news and be a consumer source of practical information” (Jordan, intro) Second, they were the first to adopt management practices that would facilitate mass production and distribution. Third, these enterprising editors found that by using express delivery of news by train or wagon, they could add an “extra” edition with the freshest news and increase revenues. (Thompson, 124) Fourth, reporters found that by using “exchanges” with reporters in other cities they could acquire interesting stories from far away. A precursor to the Associated Press, these exchanges were particularly important in building the Scripps newspaper empire that we will discuss later. Fifth, and perhaps most important, the penny press greatly expanded the solicitation and production of advertising as a means of increasing revenue.
The Technological theory
“The technological argument is the powerful idea that technological advances in printing and related industries and the development of railroad transportation and later telegraphic communications were the necessary pre-conditions for a cheap, mass circulation, news hungry, and independent press.” (Schurdson, 31) There is no doubt that the advances in technology impacted the development of the press in America, but as Schurdson later points out “indeed, it may be more accurate to say that the penny press introduced steam power to American journalism than to say that steam brought forth the penny press.” The telegraph, arising in the 1840s also caused a significant change in the gathering and reporting of news, Thompson writes: “because of the expense of transmitting news reports, correspondents were often frugal with words and therefore less likely to elaborate personal sentiments in their accounts.” (127) Objectivity was a hallmark of the Scripps papers, and at least some of the others.
The Literacy Theory
Rising literacy and longer schooling in the mid 1800s, especially in the major cities, can be seen as one pre-condition to the development of daily news reporting in America that Winston would argue is a “changed social circumstance” that invites innovation. Schurdson also argues that because of the lack of sophistication of these new readers, “their tastes tended toward simple, concrete, particular, and local.” (p.35) He goes on to say that this growing readership explains the growth in circulation of the penny press and the emphasis on local and human interest story selection. An educated and literate audience is certainly a pre-condition in the development of daily newspapers, but I think Schurdson is a bit on the edge in describing the audience as “unsophisticated”.
There are several other theories, but I think the three above cover the social and marketplace conditions that existed at the birth of the penny press in New York, Boston and Philadelphia.
Impact of the penny press on society
The late 1800’s and early 1900’s were the heydays of the penny press. They were also the time of major changes in American society; a world war, rapid urbanization, rising literacy, technological innovations in communication like the telegraph, steam powered presses and newsprint, and the rapid connection of the eastern United States to the western by the railroads. Fortunes were made, and lost in the crash of 1929, and made again in the years that followed. The time was right for mass communication to rise.
Was this a true disruptive innovation as discussed by Clayton Christensen in Seeing What’s Next ? Let us look at some of the factors. Christensen defines a disruptive innovation as one that “creates a new value proposition” (xvii) when compared to the higher priced and subscription driven incumbent papers in the large metropolitan cities. It is certainly fair to say that a mass-produced, lower cost newspaper that appealed to a broad segment of the public creates a new value proposition. Christensen also discusses the theory of emergent strategies in which operating managers encounter situations that the business planners didn’t anticipate. The operation of newspapers in this time of rapid change presented lots of opportunity for dealing with emergent situations, and the development of management tools to deal with them had to be built from scratch. E. W. Scripps was particularly adept at creating management systems to deal with changing conditions, and exhorting his publishers to seek creative solutions.
We also discussed cognitive, affective, personal integrative and social integrative needs from the work of Katz, Gurevich and Haas in class. It can be argued that newspapers as a communication technology fit all four of these reasons to use a technology in their definition. Newspapers fill a need for information, knowledge and understanding (cognitive); aesthetic, pleasurable and emotional experiences (affective); strengthening of relationships with family, friends and the world
(social integrative); and most likely instill credibility, confidence and stability in personal relationships through the knowledge of current events (personal integrative).
Making money in the penny press
The penny press was a movement in American journalism that enjoyed spectacular success. As Nerone states, the ingredients of modernization – expanded circulation, market orientation, division of labor, new technology, and corporate ownership (1987) combined to propel the penny papers to popularity and created great wealth for their owners. For purposes of this paper it will be most instructive to discuss the economics of the newspaper from the standpoint of the two original newspaper chains. Edward W. Scripps owned 22 newspapers at the height of his empire in the early 1900s, (Lee, 215) including four in the Pacific Northwest. William Randolph Hearst owned less newspapers, and limited them to the large urban centers (Lee) These two men had quite different strategies for management and revenue generation. Hearst inherited a mining fortune from his father and was able to invest heavily in his newspapers. However, as Baldasty comments, “Hearst was not a particularly astute business manager; by the 1930s he had racked up such enormous debts that he found himself on the brink of bankruptcy.” (1999) Scripps, an Illinois farm boy, got his start in Detroit, working for his half brother on the Detroit News. He was the “prototype of a modern publisher, concentrating on long-range planning, performance goals, budgets, circulation methods and revenue sources.”, according to Baldasty. Both men knew that they were facing stiff competition in each market, rising costs of production as writers, production, and distribution staff expected higher salaries, and the new market entrants faced retaliation from incumbent publishers (5)
One of Scripps primary competitive strategies was product differentiation, and prior to entering a new city, his team did an in-depth market analysis. Based on the data he collected, Scripps was able to establish newspapers that differed greatly from the existing papers and they avoided retaliation by keeping his papers small and obscure. Profitability came from ruthless cost controls. His innovations were numerous, including systemized management practices, shared ownership with his editors and publishers, news exchanges including all of the newspapers, direct delivery through newspaper carriers, and public service as an editorial priority. Scripps was a pariah to many, a shrewd business man, and a very interesting character known for his micromanaging and constant letter writing. (Jordan)
The Hearst Corporation continues as a multimedia conglomerate, owing daily and weekly newspapers, magazines, television and cable stations.
Edward Scripps died in 1921, but his company also continues on as a diversified multimedia conglomerate. Scripps Corporation also owns daily and weekly newspapers and television properties. Two of Scripps’ early innovations were a news service, United Press Associations (later United Press International) and a feature service, the Newspaper Enterprise Association. (Jordan)
The Northwest penny press – a little different
Scripps ventures were very successful in the Pacific Northwest, starting with the Seattle Star in 1899. In order of founding, he also owned the Spokane Press (1902), the Tacoma Times (1903) and the Portland Daily News (1906). The Seattle Star was “Scripps shining example, according to Myron Jordan. “From scratch in 1899 it had grown to 42,414 circulation in 1913, lagging only 1,659 behind the long established Post-Intelligencer. Scripps achieved profitability no only in Seattle, but in Spokane and Tacoma against entrenched newspapers.”
I am indebted to Myron Jordan’s UW master’s thesis on the Scripps papers in the Northwest for a great deal of valuable information on their history. He discusses several management practices of the Scripps papers that stand out in the battle for circulation in the Northwest. Scripps issued his local publishers clear instructions and guiding principles, and was relentless in monitoring and evaluating their performance. Here are four specific guidelines he attributes to Scripps from reading his letters to the publishers:
“A small paper…on the theory that a small paper is more profitable because it is more popular.”
“Save all of that money that other publishers waste on…having fine offices, expensive plants.”
“…the interests of our paper, and hence of yourselves as stockholders, will be served by making your expenses the lowest possible.”
“…the new paper is to be the advocate and special pleader of the laboring and poor classes against the whole plutocratic and aristocratic combinations, political, economic, and social.”
These guidelines were challenging and difficult for some of the publishers to abide by, but the papers were successful. They built circulation by “canvassing of the city section by section, starting with the neighborhood where the newspaper office was located, and working outward until every section had been covered at least four times.” This model was in stark contrast to the entrenched papers distribution by street corner newsboys. The Seattle Star even ran afoul of the newsboys union when members refused to sell the paper since it allowed no returns while the other papers did.
Editorially, the Scripps papers zealously gathered and printed local news. Seattle Star Editor, E.H. Wells once boasting in an 1899 letter to Scripps that the “Star contained 75 local news items within its four pages, more than twice as many as the much larger Seattle Times.” The Tacoma Times waged a multiyear battle with the county Health Department over the unsanitary condition of its main water supply, Clover Creek, which the paper’s report found to have “numerous farms where horses and cattle grazed, where drainage ran from farm outbuildings, and where outhouses as well as the privy of a small college overflowing into the creek in rainy weather.” The Spokane Press took on the Spokesman-Review, the Cowles family, and City government over a bid rigging scandal involving City printing business. (Jordan)
Scripps was also adamant about reporting with objectivity and honesty and exhorted his editors to appeal to the “common people whose hunger for political, economic, and social reform could be mobilized into a force for change.” (Jordan, p.6) Another of the pillars of Scripps’ management style was his displeasure with the strong presence of advertising in American newspapers. Baldasty comments “Instead, he wanted to reform journalism by wresting it from its close ties to advertising and commercial elites.” How is it, then, that Scripps achieved such success? Baldasty continues; “Scripps succeeded in creating a string of small, cheap, working-class newspapers that were unusually independent in their dealings with advertisers.”
In his own way, Scripps managed to create a “low-end disruption” by competing for those customers that the market leaders shed as they moved up market (Christensen)
Ultimately, the penny papers succumbed to what Baldasty and others refer to as the “commercialization of news.” Like the other metropolitan papers, rising costs of production and distribution compelled the publishers to take on additional advertising to continue their growth. Scripps was adamant at first about not accepting advertising but succumbed as Increasing urbanization and rapid communication through the telegraph and later the telephone changed the newspaper business dramatically. “New definitions of news emerged. Many came to see the newspaper as a business rather than a political tool.” The lure of greater profits from larger audiences fueled by advertising revenues was hard to resist. “And advertisers were only too happy to respond, making newspaper a major vehicle for reaching their target audiences.” (Baldasty)
This reliance on advertising sets up one of the major ethical dilemmas of the news business – is the press an independent voice and a vital source of information in a democratic society, or does it owe allegiance to those who pay the bills? In this paper, I have discussed the impact of the penny press on society in the mid 1800s to early 1900s. They brought about innovations, changes in the way news is gathered and reported and propelled the newspaper into a position as the ‘trusted” source of information to the public. This position is again being tested today as Internet and constant information blur the lines of trust. But we can thank the penny press for setting the stage that brought journalism into the forefront of American society.
Baldasty, G. (1999, Spring99). The Economics of Working-Class Journalism. Journalism History, 25(1), 3. Retrieved February 8, 2009, from Communication & Mass Media Complete database.
Baldasty, G. (1999). E.W.Scripps and the Business of Newspapers Urbana, Ill. University of Illinois Press.
Baldasty,G. (1992). The Commercialization of News in the Nineteenth Century , Madison, WI. Unversity of Wisconsin Press.
Christensen, C. Anthony, S. Roth, E. (2004) Seeing What’s Next: Using the theories of innovation to predict industry change; Boston, MA; Harvard Business School Press
Jordan, M. (1973) Newspapers and Men: the story of E.W. Scripps and the Northwest penny papers. University of Washington masters thesis in communication.
Katz, E., Haas, H., Gurevitch, M. (1973, April) On the Use of the Mass Media for Important Things, American Sociological Review, 38 (2) 164-181. Retrieved February 9, 2009 from JSTOR Archive database.
Thompson, S. (2004) The Penny Press; Northport, AL; Vision Press
Winston, B. (1998) Media Technology and Society A history: from the telegraph to the Internet; New York, NY; Routledge