What’s Next for Newspapers
I’m incredibly interested to see what becomes of the New York Times. Blodget is on to something very interesting here.
The downturn will be incredibly destructive for newspaper companies. McClatchey are on their knees, Gannett are deeply wounded and the rest are fighting for their mere survival.
I will try to add to the discussion but I admit I have zero answers. One misplaced focus is on the concept of news being free online versus paid for in print.
This is completely false. The rise of the cost of newsprint has vastly outpaced subscription and cover prices in the last 50 years. Newspapers lose a huge amount of money in selling the printed product to subscribers and newstand buyers. The Internet enables them to more cost-efficiently deliver their core product and to do so to a wider audience.
The larger problem for newspapers is that classifieds and editorial have been de-coupled due to the Internet. Worse, Newspapers have by and large screwed up even having the two separate units.
Without the crutch of classifieds profit (used to be 40% of total revenue and 80%+ of profits), the business of news has been exposed to the clear light of day. And it’s not pretty.
The second problem is that advertisers do not place the same value on Internet advertising as they do to print advertising (I can see the argument for TV, but print being better than online? C’mon!).
In the current trajectory there are two miserable outcomes: Smaller, local newspapers becoming a retail-sales circular/weekly yellow-pages company or the storied institutions of journalism like the New York Times landing in the hands of sports franchise-buying set - being run to minimize losses and maximize status, influence and personal joy.
A few people have asked me what I would do if I was running a printed newspaper company. I have honestly answered them “I don’t know”. And that makes me more intrigued to find a solution. I keep, however, landing on the conclusion that the business of journalism has always had a pathetic business outlook and that the industry’s sugar daddy, classifieds advertising, has permanently bolted.
[…] up from my gloomy Newspaper post, Gawker reports on the New York Times shopping […]
[…] My view is a lot more pessimistic: The tide of classifieds has left the world to see the natural business of news is naked and weak. […]
I’m sceptical about the future of newspapers too…but not about ongoing demand for high-quality journalism. I feel that Murdoch is right about what business the ‘newspaper’ industry is in (or ought to be in) - that is providing informed, well-researched news and opinion.
What’s changed with the internet - in addition to the migration of classifieds to online - is that a whole bunch of citizens are capable of and willing to express their own informed and well-researched news and opinion. Journalists have new competition: everybody.
Having said that, I spend less time reading newspapers now (print and online) ’cause I find better, more well informed news and opinion in blogs. My demand for high-quality news and information is still there, the sources have changed. So far I have not paid for page views. But I would not rule that out.