Historically, newspapers have made money in two ways. They make money from readers, and they make money from advertisers. Originally, most of the money that newspapers made came from readers. In the late 19th century and early 20th century the old newsboy sales model was based on incentives to move as many newspapers as possible at the highest possible price. Advertising was a source of revenue, to be sure, but not the primary source.
Over time, the emphasis would shift away from revenue provided by readers and toward advertiser revenue. Eventually, advertiser revenue would make up at least 70-80 percent of all revenue. Essentially, newspapers gave up on getting the readers to cover the full cost of the news a long time ago. The daily cost of a newspaper subscription is, more often than not, well below the cost of producing a paper copy of a newspaper. Until the last few years, the real money was to be made in advertiser dollars.
But with the significant decline in circulation (see here) advertisers know that they get less bang for their buck every month that circulation drops.
So, one day, after years of plummeting circulation and revenue, the newspapers suddenly realized they’d better get the readers to start paying for the news. Their most brilliant ideas revolved around erecting pay walls around content. In other words, the newspapers, to solve their revenue problem, returned to a revenue model that hadn’t been used in decades. It hasn’t been working out.
Mashable today carried a nice piece on some newspapers that are finally starting to look at innovative ways to make money. Primarily, they’re finding ways new ways to make money off of advertisers.
The new innovation that some papers are showing results from the fact that some papers are finally starting to come to grips with reality. The new reality is that news can and will be produced without traditional newspapers.
For the last several years, the entire business model of the newspapers seemed to be, to paraphrase Clay Shirky, “you’ll miss us when we’re gone, so give us money,” which wasn’t a rock-solid strategy to say the least.
But other organizations have already moved in to displace them. As the Mashable article notes, laid off journalists from closed and downsized papers have started to produce their own news. Here in Denver, at least one online newspaper aggregates news from a variety of blogs written by former newspaper writers and other bloggers. The blogs are sometimes funded by private firms, such as in the case of this real estate blog.
It has become clear that journalism will be funded, but that the new reality is far more decentralized, complex, and competitive.
The days are gone when one could ask “did you read the paper today” and everyone could discuss the same few news stories selected by even fewer news editors. Today, people can get the news they want, and different people are interested in different things. The market loves this kind of diversity and will move in to serve it in even more diverse ways.
The market is currently in transition, and transitions in the market produce winners and losers, but we’re not sure yet who the big winners are in this. The losers are already pretty obvious. Capital needs to be moved to where it is demanded. That is to say, it will be moved away from physical printing presses and old-timey newspapers and toward new innovative leaders in delivering news. Some newspaper organizations will learn to make money from this, and many will not.
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Drop an almost-nekkid girl holding a banana on p. 3 and all is well. Sheesh, it’s not brain surgery. Hello.
Google is thinking of some high-tech solutions, but I still vote for the banana.
This must be true since the sports and style sections are still doing OK.
as long as there exist fish and chips, there will be a demand for newspapers.
Newspapers are also highly valuable for their use with bird cages and puppies.
I refuse to buy fish and chips if a newspaper is involved. The ink isn’t good for you.
greaseproof paper completes the happy marriage.
Wax paper. 200 yards for $2.
We’re tracking into a paperless society, it’s inevitable the print papers will die out.
I doubt newspapers will truly die out: after all not only are radios still in operation but some radio signals are transmitted in digital. However it is true that newspapers won’t be a major source of news in the not-too-distant future and many find Marty reading the headlines of a newspaper in 2015 in Back To The Future 2 anachronistic (let alone the headlines with “Queen Diana” in them).
The Doonesbury strip has been flogging the newspaper thing from time to time, apparently in favor of print. See the strip this week, for example. I think Trudeau can’t give up on the idea of controlled opinion.
The line about “you’ll miss us when we’re gone” being a bad strategy probably comes from an article by Clay Shirky on newspapers;
http://www.shirky.com/weblog/2009/03/newspapers-and-thinking-the-unthinkable/
More generally than the fate of newspapers and journalist, most people fail to realize is that we are in the middle of the greatest social revolution since the invention of the printing press. The internet has pulled the rug out from under the traditional sustainers and maintainers of the culture (MSM, newspapers, NYT, etc) just like the printing press undercut and ultimately destroyed the Catholic Church’s monopoly on political and cultural power. We live in interesting times.
Good call on the Shirky line, which I had forgotten about, but almost surely was paraphrasing when I wrote this. I’ve put a link to his good piece. Obviously, his line is pithy since it popped into my head more than a year after reading it.
This exact thing happened here in Anchorage, AK. The reporters who were laid off (or that quit) from the old hard copy newspaper, the Anchorage Daily News (www.adn.com), have now formed a new online “newspaper” with no printing or delivery costs and actually better news coverage on many topics. The new “paper” is the Alaska Dispatch (www.alaskadispatch.com).
I remember when website news (some good, some bad) sprang up in the 90′s. Whenever someone who ran one, such as Matt Drudge, was interviewed on TV or in old-school print media, the “traditional” news person doing the interview acted like they were a waste of time (maybe a passing fad), or would aggressively accuse them of not being “real” news people (whatever that means). It is always amusing when the “experts” are challenged, and can’t take it!!!!! Kind of reminds me of university or educator people talking about Wikipedia…..
This one will be posed in the form of a question:
Does anyone here think such a thing as accurate reporting can be done, in the service of describing events as they take place, without bias or ideological slant, and that such news can be disseminated to the public for a fee?
Or do we live in a world where the only attainable goal is to have competing ideologies twist factual events until they fit the mold of the desired narrative? And what we get as news consumers is the choice to purchase our news from our favored sources?
Any opinions?
Since humans are involved, there will always be a slant of some sort. The words on a page are always inadequate to the task of describing an event, so we must choose which parts to convey and these choices will inevitably be a reflection of our values. Any “training” to observe or report different parts will simply be a reflection of someone else’s values. Whether or not it can be done for a fee depends upon the relative value of the news source to the consumer in comparison to other sources. It depends on perception.
Further, your idea of an objective and accurate news report will probably be very different from mine or any other person’s.
The fact that we are both commenting at the Mises Blog indicates that we favor the slant that the site offers. Some of us will seek heavily slanted sources that serve only to support our own views, while some of us will seek challenges to our views and everything between. The whole idea of a free market is to provide what the consumer wants. News in itself is subjective.
The move has been towards getting news from free blogs.Of course many of these blogs charge advertisers for space on the site. But like any business newspapers must adapt or die.
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