As I noted yesterday, I believe that multiplicity of information channels is important in the I-Cubed economy. One of those channels is the newspaper. It has become conventional wisdom that newspapers are dead or dying. But, as James Surowiecki points out in his financial column in this week’s New Yorker – “Printing Money”, the newspaper business is actually profitable.
(s)ince 1980, the circulation of morning papers has actually risen by almost sixty per cent.
Meanwhile, newspapers have minimized the damage by getting better at making money off the readers they’ve kept. Some papers, such as the San Francisco Chronicle and the Des Moines Register, have deliberately reduced their circulation–usually by eliminating promotions and giveaways–in order to trim costs and improve their demographics.
. . .
Since lots of potential buyers read the classifieds, potential sellers are more likely to list there, which, in turn, makes potential buyers more likely to keep reading. That’s why seventeen billion dollars was spent on newspaper classifieds last year. And, while the Net has eroded newspapers’ advantage in disseminating news, it has expanded their reach and influence. The Washington Post, despite its drop in circulation, attracted more than eight million readers to its Web site in February, an increase of nearly three million over the same time last year. Papers may not have figured out how to maximize the monetary potential of this shift, but online advertising already earns them two billion dollars a year.
I agree that newspapers have yet to figure out how to deal with the internet — and not just on the advertising end. The news end is still trying to understand. One local example is the Washington Examiner. The Examiner boosts about its local DC coverage. The front page is often a local story. Yet, on the website, local Washington DC stories get mixed in with national/international Washington DC stories — apparently because the website can’t distinguish between all the national/political news generated in Washington from the local Washington stories. As a result, if you want to get the Examiner’s local coverage, you are almost forced to get a copy of the hard newsprint. And this is not a revenue generating strategy — the newsprint version is free!
Rather than outside forces causing the demise of the newspaper, Surowiecki believes the real danger is a self-fulfilling prophesy:
the popular conviction that papers are doomed may cause owners and shareholders to prefer the cash-cow approach, accepting eventual oblivion while continuing to harvest billions of dollars in profits, largely through cost-cutting. Settling for a tolerable short-term future, newspapers could end up writing themselves out of the long-term one.
As he points out:
Established media–radio, the movies, television–haven’t vanished when new forms have come along. They’ve adapted by playing to their distinctive strengths.
For most newspapers, this will mean abandoning things that are ubiquitous on the Internet, like stock tables and wire stories, and investing in content they can own, like serious local coverage and in-depth reporting.
That is a good strategy – I think. Just as AM radio remade itself into the talk and sports outlet when FM took over music, newspapers will have to remake themselves into more in-depth sources of information.
But, what, does that mean for weeklies – such as Mr. Surowiecki’s The New Yorker?
Hum … This could get interesting.