More Downfall of Traditional Media Stuff

What investors should be demanding is an easy to find breakdown of on-line versus tradtional revenue. How long will it be before the first paper goes completely internet, recognizing that all of its old media costs of paper, production and distribution can be channelled into a better news product?
- Hugh Hewitt

I wrote last year that it was only a matter of time before a major newspaper drops the hardcopy version of their product for an online only publication. Not only are the economics of producing a physical newspaper working against them, but the process of delivering information is even more negatively impacted.

Until recently I thought that some of the citizen journalist projects would lead the way to a new model, but in light of the demise of Bayosphere and my own experiences building a community of participants, as opposed to just viewers, has made me reconsider the premise. The other component of all of these initiatives that I take issue with is the deliberate effort to aggregate source material under one tent, as opposed to the semantic effort required to aggregate search results. That's why I get more excited about something like Technorati than I do Squidoo, although I will also be the first to acknowledge that both have their place and both deliver value to their constituents.

The TimeSelect program that the NYTimes embarked on is a foolish initiative by market incumbants intent on extracting more dollars from a dwindling subscriber base, a strategy that is in full denial of what their business actually is - deliver information - and how the economics have changed - Google. But the numbers don't lie, in 4 months the NYT only managed to convince 150,000 people to sign up, while at the same time taking millions (tens, hundreds?) of pageviews out of their advertising denominator. The irony is that the NYTimes' advertising revenue was actually up over the recent quarter, although they don't break out online and offline. Overall earnings fell dramatically, the NYT's response, raise subscription rates... shrewd.

Hewitt makes another point worth underscoring, although it's one we don't already know:

Eaxmple for today: Why would anyone bother with the Washington Post's or the New York Times' accounts of yesterday's Candian elections? Ed Morrissey reported the results in real time, with pointers to all the Candian blogs anyone could need as well as an assessment of the likely government to result.

Also worth pointing out is that Morrissey uncorked the whole Canadian sponsorship scandal that ended up bringing down the Liberal government in yesterday's elections... the NYTimes was nowhere to be found on this story for a long long time.

All of this ends up back where we started, the economics AND process of publishing a hardcopy edition of a newspaper put the industry at a distinct disadvantage in a Media 2.0 world.


Technorati Tags: media2, blogs, citizen+journalism,

Comments

[Jack Moore]

Get real on this one. The analog world is not going away in your lifetime. Spend some time along any commuter rail line in NYC, BOS, or SF for that matter. Many of us still like to get our fingers dirty.

[jeff]

of course, if the SF Comical and the LA Times keep going the way that they are, they won't have a subscriber base to print a hardcopy for.

Jack, this is a generational issue. I'd wager that if you polled 100 people all of whom are under 25 you would find that lower single digit % actually have ever read a hardcopy newspaper, much less subscribed to one.

I dropped my WSJ last year, get everything online and haven't looked back. I don't ever bother to pick up the hotel provided newspaper anymore. The analog world isn't going away entirely, but the digital one is coming to the masses more rapidly.

[kirsten]

why?

well, in general -- because journalists (vs. bloggers)have better -- press pass -- access to events and story sources, are trained in investigative journalism, are held to a professional code of ethics (albeit some abuse it), and subscribe to using spell check and grammar check.

Print media has never been the medium for "breaking news" -- lazy audiences leave that to television. Print is better known for remarkable in-depth analysis, in part due to print production lead times. People aren't leaving print media for Internet media - they are getting intellectually indolent and watching and reading less news altogether. The AVERAGE AMERICAN prefers "homespun reality t.v." to a diatribe on groundbreaking technology or a news broadcast anyday (unless there is death, blood, or celebrity involvement). More importantly, a whopping sizeable portion of the adult audience across America and the World are still too underprivileged to own or have access to a computer. Computer ownership and Web use are lower in households comprised of seniors, among blacks and Hispanics, and among households comprised of people with less than a high school education.
In homes earning under $40,000, online access plummets to 40%. As of 2005, only 52% of all Southern households have online computers. And a significant part of the aging population still prefers paper.

Think it ain't true? YWCA nationally just moved from an exclusive e-newsletter communication platform BACK to a print newsletter at the request of its donors (average age: 50+).

With due respect, Mr. Nolan, this little girl needs to point out that most of the world is not "techno-savvy." Believe it or not, a good deal of the world still doesn't own an ipod. Egads, imagine that!

Geez is it just me or does Silicon Valley kinda live in a vacuum?

kindly,
kirsten

[kirsten]

p.s. if you need more grainy real-world validation about this theory, softly and gently ask the little kids of KIPP what daddy and mommy spend their time doing at night. Bet their parents aren't surfing the Net or playing Gameboy.

and after that, respectfully, ask SAP to donate to YWCA TechGyrls (so that more good little girls dreaming of greatness but living in low-income households, can have first-time access to computers).

http://www.ywcatechgyrls.org/

kindly,
kirsten

[Stephan Schwab]

The right device is missing. I don't like to read with a laptop sitting on the couch. What is missing is an inexpensive tablet. Not those laptops that can be converted into a tablet. A real one: very thin, basically only the screen, no HD and you use a pen or even your finger to control it. Such a tablet would certainly have success given the vast availability of content on the Internet now.