The Internet and today’s economy are calling to question the survivability of newspapers… but everyone already knows that. What everyone wants to know (including myself) is what are newspapers going to do to survive? Do they get rid of their print editions and focus on making their online versions profitable? Do they concentrate on advertising revenue (as current online media are), or do they find a way to get money from their readers?
Hoping to better understand the situation, I read three articles (recommended by my communication history instructor) and have posted what parts of each article were most insightful to me. These highlight the problems that newspapers face, and offer some direction as to where media needs to go:
Print media brings in more money than online content. There is more space for advertising, and people pay for their newspapers. Online print is unable to utilize advertisements the way print media is (there just is not as much space on a web page for ads like there is on a newspaper page), and readers do not have to pay for online versions of newspapers in most cases.
The conundrum, of course, is that those 1 million print readers, who pay actual cash money for the privilege of consuming the paper, and who are worth about five figures a page to advertisers, are far more profitable than the 20 million unique Web users, who don’t and aren’t.
How do newspapers extract revenue from readers who already expect their content for free? And what can newspapers do to earn more revenue from their advertisers?
The Time Magazine article talks about the importance of generating revenue from the reader base is important. The writer (Walter Isaacson) argues that generating revenue from advertisements alone not only limits revenue, but it also jeopardizes the quality of the reporting.
In an advertising-only revenue model, the incentive is perverse. It is also self-defeating, because eventually you will weaken your bond with your readers if you do not feel directly dependent on them for your revenue.
Isaacson argues that it is possible to make money online from readers, and that charging them is not an absurd idea.
Back then there were a passel of online service companies, such as Prodigy, CompuServe, Delphi and AOL. They used to charge users for the minutes people spent online, and it was naturally in their interest to keep the users online for as long as possible. As a result, good content was valued.
[…]We invented things like banner ads that brought in a rising tide of revenue, but the upshot was that we abandoned getting paid for content.
The Daily Anchor (An editorial on the potential closing of the San Fransisco Chronicle):
They argue that newspapers that are losing revenue need to close (a libratarian perspective) and that print media is dying. This is a good thing, they argue, not just from an economic standpoint, but also from an environmental standpoint.
… if market forces are changing the way we receive media, then the market must adapt and evolve.
[…]Newspapers are limited. Static. Outdated the second they’re printed. Websites and blogs can publish articles in real-time, 24 hours a day, 7 days a week, and be updated on the fly, even from a cell phone.
…I would wager that within the next 10 years, 85% of all print newspapers in operation today will be out of business or exclusively online. And you know what? They should go out of business. They’re dinosaurs, and the web is a meteorite/volcano/climate change/the best thing that’s happened since slice bread.
So what do newspapers need to do to survive? That’s the million dollar question, and that answer may be different for different newspapers.
If the New York Times, for example, can get each of its 20 million daily website visitors to pay $.05 each day they visit their site, they can make $1 million each day!
But that’s not going to work for papers whose online presence is small. Smaller daily newspapers probably do not have that option, and bigger dailies (such as the San Fransisco Chronicle) may not have enough time to create a large online following before they go out of business.
But as the Daily Anchor pointed out, there will likely be many fewer newspapers still printing by the time the whole financial fiasco is over. And that may be a good thing in terms of the environment and in terms of innovation.
I am interested to hear your thoughts on the subject. Feel free to leave a comment (or publish a response on your blog and link to it in the comments section). Look forward to hearing from you!