Why Newspapers Are Failing (Hint: Failure To Get Users To Pay Is NOT The Reason)

from the some-good-analysis dept

Mon, Aug 17th 2009 1:40am — Mike Masnick

A bunch of folks have been submitting two separate stories about why the newspaper business is failing. Much of the stories cover ground that we've covered before, but they do so in such a nice, well-argued package, that I wanted to mention them here. The first, by Bill Wyman, gives five reasons why newspapers are failing. The list is good, but the detailed explanation is better. The first one explains that consumers have never paid for the actual news. It's a point we've made before, but Wyman digs in and explains why that's true, and makes a key point as to why newspapers were able to make money in the past:

They held an informal monopoly on a societal convention whereby they deposited those ads--around which they wrapped some reporting, some of it serious, some of it fluff--on subscribers' driveways.

The second piece also tackles this same issue, and is by Chris O'Brien, detailing how consumers have never paid for news, but then follows up by pointing out what business newspapers have really been in:

At their peak, local newspapers did two things: They created community. And they provided the local marketplace for goods and services. These services were so profitable, that they subsidized the civic good of journalism. The reason newspapers are in trouble today is because they have lost their dominant position on both of these fronts.

Bingo. So, newspapers, beware of thinking that you can get away with charging for content. All you're really doing is shrinking that community, and taking away the real reason you had a business in the first place.

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Filed Under: journalism, newspapers

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Anonymous Coward, 17 Aug 2009 @ 3:13am

newspapers
Newspapers are failing because journalists in this millennium do not have the same abilities as those in the past. They turn out some really dull, turgid information and can even make the most exciting international disaster humdrum and everyday by the use of the same old cliche-ridden copy.
The explosive increase in "Media Studies" courses at all levels of education have led to thousands of dullards mistakenly believing they are God's gift to journalism.
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Anonymous Coward, 17 Aug 2009 @ 3:36am

Mike, I love how you state all this with absolute certainty.
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Anonymous Coward, 17 Aug 2009 @ 4:43am

So true, costs are up, but revenue is going to other places. That and the fact people just dont read the paper anymore. I can get what news I wanna read on the internet faster and multible views.... without having to search through several pages to get to the 2-3 sections of the same story
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Anonymous Coward, 17 Aug 2009 @ 5:36am

My local newspaper has a circulation of around 3000 once a week. I can get 3000 people to SEE my ad on the internet per DAY for the price of a single copy. If I were to actually spend $60-200 for a weekly ad in the paper, I'd still only have a possible 3000 eyes looking at it, fewer noticing that they saw it consciously, and maybe a handful of people who look at it enough to think about my business.
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Ima Fish (profile), 17 Aug 2009 @ 5:38am

Why newspapers are failing
Newspapers are failing because their business model is obsolete. At one time, every city and town having a printing press to deliver the news was a highly efficient means of distribution.

The movie industry didn't destroy that. Radio didn't destroy that. TV didn't destroy that.

The internet did. The internet is much more efficient than printing news on paper and delivering it the next day via trucks and cars.

So right now we have thousands of printers, aka, newspaper publishers, who have nothing to print because no one is reading their prints and no one is paying for their prints via advertising.

We're in a transitional stage. People always panic during these times because people inherently fear not knowing the future. Some large cities might be able to support the printed news. The vast majority will not. Within a decade most people will not even remember a time when we read newspapers.
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Anonymous Coward, 17 Aug 2009 @ 6:05am

Re:
Unfortunately, those 3000 people are in Brazil and Mumbai, India. None of them are likely to do business. It isn't about the eyeballs, it's about results. Stats are stats, cash is the only thing you can spend.
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Anonymous Coward, 17 Aug 2009 @ 6:24am

While it's a good thing that news distribution has become so much cheaper and more trees are, hopefully, being saved, one thing that everyone seems to ignore is the cost of obtaining the news. Who will do the reporting? How will that person be paid and how much? And how will that expense be recovered from the business, because the civic good of journalism also needs to be a SUSTAINABLE business?

People who chime in here may not be aware of the number of elements that go towards producing a day's edition. There are reporters, editors, photographers, designers, columnists and special correspondents involved. A paper with 50 staff means anywhere between 3 million and 5 million dollars a year in salaries alone, if not more! So, the question is: can a paper generate enough to stay afloat in the current market? Will the death of the weaker papers result in consolidation, with the bulk of the country's newspapers in the hands a few tycoons? Is that a good thing?

Answers, anyone?
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Anonymous Coward, 17 Aug 2009 @ 6:57am

Re: Re:
So the 3000 people subscribing to his local newspaper are in Brazil Mumbai and India or did you had a fit of dyslexia?
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ChrisB (profile), 17 Aug 2009 @ 7:02am

Re:
Its like you read the article, nodded, and then asked, "but how are we going to save the old business model?" You can't. That is the point. The "3 million and 5 million dollars a year in salaries alone" will not be paid for if not ad-sponsored.

What will most likely rise in the place of big newspapers, is smaller community newspapers with lots of volunteers, or community websites. I can imagine a website called TownHallMeeting.com, which reports on municipal government affairs country-wide.

Democracy requires that the people make an effort to be informed. Previous generations had a free ride, with ad-sponsored news. Our generation will actually have to do some work; we can't just sit on our couch yelling "inform me!"
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Anonymous Coward, 17 Aug 2009 @ 7:06am

Re:
Advertising, the same as always.

The newspapers made a profit on the subscriptions but the cost of the subscription was to cover the operating costs. The initial purchase of equipment, maintenance, people actually delivering the newspaper, etc.

When I was a kid it was common knowledge that they had gotten all of this down to a fine art and the subscription fees were marginal compared to the amount of money they raked in from the paid advertisements.

Of course people will only pay for advertising spots if people actually go to your site/read your newspaper. People are still getting news so obviously there are places where people go to look at articles ERGO there are places to view ads next to what people are reading THERE FOR the newspaper business will remain mostly the same, however there will fewer big name news distribution sites as the market will make it quite tight for them.

However relatively small time blogs, local websites, etc, will boom in numbers disseminating and commenting on news and directing traffic to big news distribution sites as reference. Note this is what techdirt essentially is and what most blogs do already.
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1DandyTroll, 17 Aug 2009 @ 7:08am

The truth about why they're failing
There's no more news.

Everything has already been published before it get published in the papers.

There've only been two incentive to buy newspaper.

To, for having a natural time period about once or twice a day when you were forced to, read crappy written news, and then to be able to wipe your arse.

So essentially it's the booming business of toilet paper that has done the newspaper business in. Internet connected mobile phones just accentuate that.

Hurrah, for the future, eh. We now aren't forced to support a newspaper business (who's 'art' imitates life) by buying the printed crap paper, and risk getting home made smeared tattoo of Britney between our buttocks.
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Anonymous Coward, 17 Aug 2009 @ 7:40am

Re: Re:
But there are enough vested interests that will do everything to try and save this business.

But one thing's for sure. Unless you figure out how to generate 3-5 million, the current model of journalism is on its way out.

"What will most likely rise in the place of big newspapers, is smaller community newspapers with lots of volunteers, or community websites"

We'll have to see how sustainable that is. The model works for wikipedia, but can volunteers keep a "newspaper" alive?

Perhaps the journalist profession will soon become a dodo.
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Anonymous Coward, 17 Aug 2009 @ 8:27am

Re: Re: Re:
You're still thinking in the old model, though.

Here's something to ponder: Will a centralized news industry even be necessary anymore?

The whole point of a singular news company was that it was convenient for the customer. All the information would be in a single place, meaning you only had to pick up a single newspaper.

Today, though, when was the last time you only visited one news source? Sites like TechDirt point you to hundreds of articles, Google gives you hundreds of readily available sources, and many times you don't even have to seek out news stories, you'll just stumble across them.

Not to say that this is a good or bad thing for the flow of information, but it's a massive change. I don't think the newspaper industries have really realized this, though, because they're still trying to compete for sole viewership.
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Anonymous Coward, 17 Aug 2009 @ 8:44am

Re: Re: Re:
No,the 3000 people he can get to see his ad online cheaper.
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Anonymous Coward, 17 Aug 2009 @ 9:13am

Re: Re: Re: Re:
Are you completely ignoring location based advertisements and shooting at the absolute cheapest and simple form of online advertisement?
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Alberto, 17 Aug 2009 @ 10:34am

Re:
And even then, they can't click on it to go to your website.... I love print, but it is difficult to stay faithful taking in consideration how much the internet has affected us.
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Alan Gerow (profile), 17 Aug 2009 @ 2:00pm

Re: The truth about why they're failing
Sears went through a crisis of sorts on its home ordering business when it moved from newsprint to glossy paper in the Sears Catalog.
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nelsoncruz (profile), 18 Aug 2009 @ 7:43am

Newspapers as ad vehicles
There are 2 or 3 newspapers here in Portugal that seem to get very well that they are truly ad vehicles. They are free and distributed all over the place in major cities. They are placed in public transportation hubs, office buildings, waiting rooms, and given away to drivers waiting in red lights at busy intersections.

Do they make quality news? No. Are they "newspapers of record"? Hell no! But the formula works. They are there when people are bored with nothing to do, commuting or in a waiting room, and usually have at least some mildly interesting stuff to make people want to browse them. They capture that audience and sell it to advertisers.

There are also companies here using "news" to make flyers/catalogs more interesting. Lidl, a chain of supermarkets of German origin, wraps their weekly catalogs (inserted in thousands of mailboxes) in several pages of a basic newspaper/magazine. There's always a celebrity interview, some news, funny stories, comics, puzzles, etc. It's another example of free content paid by advertising.

The major (paid) newspapers also understand it's important to give people "reasons to buy" beyond news. They often make bundles with books, DVDs, tools, silverware, jewelery, etc, for a couple more euros or at no extra cost. It's all about circulation. How many eye balls they get on ads.

So why are so many newspaper people in the US unable to see things aren't that much different online? What matters are page views. How many people view the ads and potentially click on them. The difference is, newspapers can't "force" themselves in front of people (short of spamming). So aggregators, blogs, etc, that send people to newspaper websites are truly their friends, not enemies. And like bundling goodies in the offline world, they must give reasons (beyond news) for people to go back to their sites again and again. Build a community like Techdirt says all the time. Perhaps online versions of puzzles with score rankings that foster competition. Perhaps encouraging discussion around the news. Etc.
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Beth, 18 Aug 2009 @ 2:05pm

Times are changing
Newspapers are starting to evolve and get with the program that things can't stay the same. However, getting your news from different places on the web can be tricky. I don't want some soccer Mom at the local coffee shop to be my information source. One thing that newspapers have is journalists to write and investigate the story and an editor to edit. That can't be replaced with bloggers or volunteers. Where would society be without the newspaper and the journalists in some format? Soccer Mom isn't finding out what's going on in the government, the police force, etc.
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GaphicStart, 20 Aug 2009 @ 2:41am

Save the newspaper; get a great design (video)
There is a lot to be said about this and he has proof as well:
Design can save the Newspaper
http://graphicstart.com/viewarticle.php?articleid=292
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