Tuesday, April 10, 2012

Are newspapers like buggy whips or railroads?

Nearly two decades ago I took a couple of cross-country trips on Amtrak, one taking me all the way from Salt Lake City nearly to Boston.

The going was slow, uncomfortable and expensive, taking several days instead of several hours with a ticket price more than double the cost of an airplane ticket, just for coach. When I went in a sleeper, the cost was more than triple of an airplane ticket.

The food was great and I rather enjoyed the leisurely pace. Since I’m terrified of flying, it was a nice alternative, but long-distance rail travel in the U.S. is simply impractical. People who have traveled on rail in Europe love to complain about the miserable state of American passenger railroad.

Of course, what often goes unsaid is that the Eurozone spends billions of dollars a year subsidizing its passenger rail system. What almost always goes unsaid is that, while America’s passenger rail system is terrible, its freight rail system is the envy of the world.

“(America’s freight railways) are universally recognized in the industry as the best in the world,” wrote The Economist in 2010.

I have mentioned this in conversations from time to time (don’t ask how freight rail would come up at a cocktail party), and the response is always incredulity. How is it possible that America’s ugly, seemingly grimy, graffiti-ridden railroads can be the best, most efficient in the world?

Part of the answer, of course, is that U.S. freight railways can go from Boston to Los Angeles without crossing any country borders. Those same railways own the tracks used by Amtrak, which is one reason why traveling on Amtrak is so slow -- there were many instances on my rail trips when we had to pull onto a siding to let a freight train pass.

My broader point is that American freight rail, traveling at relatively slow speeds using decades-old locomotion technology, is thriving without government subsidies or converting to slick high-speed systems.

Many critics of the newspaper industry compare it to companies that once made buggy whips. When they didn’t adapt quickly enough, they disappeared. I posit that a better comparison might be the U.S. freight rail industry, which is so healthy that Warren Buffet bought one of its companies for $34 billion just a few years ago.

Railroads have, indeed, adapted over the years, but they didn’t jump into foolish investments or destroy their business model out of fear that a competitor might beat them to it. Instead, they created a decidedly unsexy but spectacularly successful business that every other nation in the world wishes it could match.

I’m either na├»ve or optimistic enough to believe that newspapers can do the same.

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