A few weeks ago I met a magazine publisher. We spoke about the future of publishing and the web. It was an interesting discussion because he knew a lot about publishing and I knew a lot about the Internet.
At one point he asked me what magazines and newspapers I subscribed to. I thought for a moment and had to admit that the only magazine I read is Wired magazine which I buy at a newsstand every month. Then he asked me where I got my news from and I explained that I am subscribed to several local and global news sources online. Did I pay for any of these, was his next question. No, I didn’t, I answered. He smiled, and said:
“Don’t you feel guilty for getting all that content without paying for it?”
Of course I explained to him that I didn’t and that although I didn’t actually transfer money to any of these sources I did pay with my attention to their advertisements and that I might even, at one point, consider paying a fee for certain content.
Although the discussion moved on after that the ‘guilty’ question kept lingering in the back of my mind. Somehow I couldn’t find a satisfactory answer. In his line of thought I was guilty of the demise of the newspaper industry, and I had admitted as much. It is all my fault.
Today Reuters reports (for free) that Warren Buffett is giving up on the newspaper industry. In an incredible reversal of fortunes he goes so far as to say that “the reeling industry may never recover because it lacks a sustainable business model”.
Wow. That is what most newspapers are reporting about most Internet companies. No sustainable business model? Really? There is more: “Twenty, thirty years ago, they were a product that had pricing power that was essential,” said Buffett. “They have lost that essential nature.”
Yes, they lost it, and are proud of it.
The editor I spoke with proudly proclaimed that he didn’t get a computer until about a year ago. He refused to check out Twitter, thought blogs were just a waste of time and regarded email as a mere nuisance.
Then it hit me; I couldn’t find an answer to his question because it was the wrong question.
I don’t feel guilty for getting my news online just as I can only assume nobody felt guilty for trading in their horse and carriage for an automobile in 1910. I’m sure the local farrier wasn’t too happy about the whole thing but blaming the customer surely didn’t help.
As it turns out the newspaper industry had a healthy lifespan of about 300 years. Their business plan worked out fine. It just wasn’t sustainable.
Was this inevitable?
No, it wasn’t. They owe it to themselves. They didn’t cause their own demise but stood by, ignorant, arrogant and too proud to do anything about it, as the world changed.
Ask yourself this; if ads are so damned important to newspapers, why didn’t any of them invent Google Adwords? Or buy into them when they were just getting started?
If classified advertising was such a huge cash cow, why didn’t anyone buy eBay?
The answer is because these newspapers refused to evolve. They refused to acknowledge the fact that the world is changing. They thought they were big, powerful and strong enough to stay relevant.
Unfortunately for the newspaper industry survival of the fittest isn’t about strength but about who is most adaptable to change.
UPDATE: also read this latest post on Techcrunch on the future of newspapers. one quote: “It’s not the “paper” part of newspaper that’s the problem, it’s the “news.” As in, newspapers are way too slow at delivering it in the age of the Internet. People are unsubscribing from newspapers because what’s the point of reading something in print a day after you’ve read it online?”
Great post which hits the nail on the head. Slate magazine published an interesting post last week about Warren Buffett’s visionary powers concerning the newspaper industry (http://www.slate.com/id/2217014/)
Yesterday KRO Reporter had a docu about the fall of PCM newspaper publisher http://reporter.kro.nl/uitzendingen/_2009/0503_pcm/intro.aspx
Interesting stuff, looks like they actually tried to invest in new media back in 2000, but failed because of their organization decision structure.
Totally agree, papers and magazines were build around scarcity of data and this scarcity changed in abundance. Papers are still trying to manage their business by managing scarcity instead of managing the abundance. Compassion is not a (sustainable) business model.
You are actually asking two very different questions:
1: what’s the alternative for readers?
2: what’s the alternative for journalists?
I think we can see what the alternatives for readers are. We read blogs, Twitter and online media. Maybe a newspaper once a week. That is it.
For journalists the answer is less pleasant. I’m guessing 90% of them will go and do something else. What did farriers do when people started driving cars? They probably learned how to change tires and fix engines.
Or they starved…
Well, the first step to finding a solution is understanding you have a problem. My point was that a lot of people in the newspaper industry just blame the reader for getting their news somewhere else and assuming that a solution will somehow present itself. Until it does: blame the customer.
A quote from Seth Godin:
“how come the Stanford Publishing Course special week on digital media isn’t sold out yet? It seems to me that if you know the old world is about to end, you’d run like crazy to master the new one.”
http://sethgodin.typepad.com/seths_blog/2009/04/sixty-to-zero.html
U.S. Newspapers are dying, we know that. But what’s the alternative?
Great post – sadly you’re right – it’s game over.
I guess the question I wanted to ask was: how do we stay informed? Who is going to all the trouble of covering everything from wars to elections.
It’s not entirely fair to ask that question though, as a lot of experts agree we can’t come up with one. Clay Shirky wrote a great piece about it: http://www.shirky.com/weblog/2009/03/newspapers-and-thinking-the-unthinkable/
The reason I still asked the question is that we hear a lot of ,,newspapers are dying”, while I think it’s way more interesting to look for challenges, adventures and experiments. Like coming up with new media formats or trying not to die from starvation ;-)
I can definitely understand that it appears like newspapers don’t want to acknowledge that they have a problem. Companies like Copiepresse enforce that image: http://thenextweb.com/2008/05/28/google-news-suing-copiepresse-loves-to-look-back/
Luckily, there are also newspapers who are experimenting with new techniques. Better late than never, I’d say. For a next post, it might be interesting to highlight newspapers who do understand that things have to change and start working on new strategies? Like The Guardian (with their API and acquisition of paidcontent.org)
Thanks for the Seth Godin tip, did not see that article yet.
(discussions like these used to take place in our office, now everybody can follow it ;-))
But the key question here is, “Where do the blogs, Twitter, websites, etc. get THEIR news?” The obvious answer is the investigative journalism of those reporters you want to go “do something else.” As questionable as newspapers may be on certain topics, I rely on their journalistc integrity for the accuracy of information they give me. Can I rely on blogs for the same? I give an emphatic no, blogs are simply the opinion of the person writing, great for a cathartic release of bile, but hardly factual reporting.
Look again at newspapers and at their direct affect on our democratic way of life.
1. I would say that the business model the newspapers chose is faulty. In an effort to respond immediately to the threat of the Internet they took their product and threw it up on the web for free. Then to make matters worse they allowed Google, Yahoo, et. al. free links to their free web sites. Any freshman business student could see that that was suicide. However, the Wall Street Journal realized the mistake and has, from day one, charged for online subscriptions and is doing very nicely.
2. Yes, I believe that the vast majority of Web “news” sources are simply copying and pasting from traditional news sources. You certainly can’t believe that the Huffington Post, started by the way by a woman whose sole claim to fame is being the wife of a very rich guy who ran for public office and lost, is going to invest in someone doing 6 months of research on a federal program gone awry? Or that the cerebral ramblings of a guy sitting at home with a laptop will contain news that you can use?
No, my friend, the business model has to change, but the death of newspapers in a Democratic society is nothing to celebrate.
Deep insights Boris. Thank you
We would do better if you bought an ad. We have two available right now… ;-)
I still read a newspaper daily and im considering subscribing to another soon.
I also don’t feel guilty about getting all the content for free as im sure you do quite well with the ads on your sidebar.
I have found that all the quality content I read – the authors are doing really well. Techcrunch, this blog, Twit.tv – all have good income streams.
Interesting post. Since you appear to know all the answers, who do you propose funds investigative journalism once all the newspapers are dead? Ebay?
Jeff Jarvis also talks about this topic in his book. Reading it at the moment (great book btw)!
My post was not a celebration dance on the death of good reporting. I was merely observing that newspapers seem to be dying and I have a theory why. Talking about how great that thing was that is now dying won’t bring it back.
Glorifying the past (newspapers) and denouncing the future (online news: blogs/digital newspapers) won’t get you anywhere. In fact, that is the whole reason why the newspaper industry is in trouble.
Isn’t it interesting that everybody who disagrees does so anonymously?
I wonder why that is…
Let me know when some blogger breaks a story on the scale of Abu Ghraib or the NSA wiretapping (New Yorker and New York Times respectively). As far as I can tell, they don’t have the financing or attention span to pursue stories of that magnitude.
I am deeply suspicious of this idea of “citizen journalism” replacing professional journalists. Obviously, there were limitations on the system of professional journalists. It was far from a perfect system. But, please, let’s not do a celebration dance on the death of good reporting.
Woodward and Bernstein replaced by Matt Drudge. Hilarious. We’ve become slaves to the sensational. I eagerly await the abuses of the federal government being held in check by a man who might as well write about celebrities for People magazine. Good luck world.
Great and timely post.
I agree that it is their refusal to adapt which is causing their demise.
The pricing power W. Buffet referred to was from the oligopoly power. A high capital investment was previously requiremd to get the broad and targeted reach advertisers wanted.
Guess what, there are now alternatives for a broad and targeted reach. And those high capital costs are their demise….time for a change.
Ocassionally the same ads follow me around the net (TheNextWeb). But we are still in the dark ages of digital targeted advertising. The smart media companies will invest or partner with intelligent ad networks.
This is a huge opportunity to create an even more relevant media, which is more valuable to advertisers….let’s see who wins!
I am worried about all the out of work paper delivery boys/girls. Unemployed youth is never a good thing for social stability.
Boris,
I would like to add something to your newspaper evolution theory. Which I by the way basically agree on. The survival of the fittest is historically about the adaption of change or even changing yourself because of not changing ‘evil’ circumstances.
But the world and especially the business world, has changed a lot. Growth or even survival can only be realised if there is an internalised drive to cooperate in a daily changing distribution network. This new distribution is realised by the Internet but also by new partners like train companies that distribute free newspapers.
The conservative media is locked in both issues. Cooperation is not internalised because of the ever-lasting Berlin wall between editorial content and business. Besides that, distribution models are not seen as dynamic but as fixed processes that need to be managed instead of innovated in cooperation with technology and partners. It should be about offering your content towards people who need, want or like to receive it now. But it is still in the case of the newspapers about bringing everything produced towards people who would like to receive something but perhaps not now. Distribution and partnering is key.
There is a huge market for newspaper editorial content. Nowadays we are (sometimes desperately) looking for friends, people who think the same way as we do, quality content and opinions. A new and wanted platform that newspaper companies can provide us.
I think we should try to help. It is not about arrogance or unwillingness. Those companies didn’t learn how to change. We can help to evolve and in this way create our own existence too.
Eldert van Wijngaarden
Kalooga
“If classified advertising was such a huge cash cow, why didn’t anyone buy eBay?” – I love this remark, because I think that it shows clearly how ignorant and arrogant the business part of publishers were when they had the chance to jump the curve. They probably thought it wouldn’t ‘go so fast’ and ‘run that deep’.
I truely believe that if ALL newspapers die (which I doubt greatly: if the majority dies a market will open up for a few highly-specialised smaller newspapers/magazines that will fill up the small vacuum that is left behind -like the friends or similar opinionated people Eldert is talking about-), investigative journalism will continue to exist. Financed from a different source; maybe financed from these smaller magazines, but quiet possibly financed from a new business model.
still a little rough….but at least they are trying
https://www.timecmg.com/mine/
My paper, the NY Times, when from a lightly liberal paper to a crusading paper for the left. So did the North Jersey Bergen Record. In both cases, the editorial content spilled out across the paper to the detriment of what a paper needs most – credibility. The news gathering organizations like AP and Reuters went the same way. So…essentially there was no difference between the newspapers and the blogs – both are opinionated, based on slanting of facts etc. But one is free and one is not. Would staying reasonably centrist have saved the Times and the Record. Maybe not, but it would have slowed the demise of both – I know many many formers readers who swear they would never buy either paper, and actively wish for the demise of both. So you have large numbers of people who not only won’t buy newspapers but who wish them to die – and its the papers own fault for choosing in just about every instance to be pro-Democrat America hating rags. Town hall magazine and the City Journal – two conservative magazine startups are doing fine. Time and Newsweek are teetering. What does that tell you? Good riddance to newspapers, and viva the new media! The traditional networks are next!
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Two answers:
1: you are telling me that newspapers and journalist do great work. Yes, I agree. But does that mean they have a valid business model and will always stay around? No. The fact that journalists do great work doesn’t guarantee their future. So, your point it irrelevant.
2: you think we get our news here at TheNextWeb.com from reading newsletters? Do you think Arrington gets his posts from reading BusinessWeek? The Huffington Post just copy & pastes The New York Times? Fact is we more and more get our news online and from several sources. Yes, some of those sources are CNN, NYT and your local newspaper. That doesn’t mean they will continue doing so.
Again; no valid business model.
I certainly don’t have all the answers. My point is that we/they assume there MUST be answers. Maybe there aren’t. Maybe nobody will fund investigative journalism and it will cease to exist. And that would suck. But I also wish there were still dodos and dinos. But there aren’t.
Actually I do have an answer to that one. You seem to argue that there would be no Carl Bernstein or Bob Woodward at the The Washington Post to write about a future Watergate, right? And that would be a great loss?
Well, lets take a look at more current events: the Monica Lewinsky affair
The Lewinsky affair was actually first reported on January 17, 1998, on the Drudge Report website after Newsweek decided not to publish the story. Why didn’t they publish the story? Probably because they thought it would be to risky for their business.
Matt Drudge, the owner and founder of Drudgereport.com, is a modern Carl Bernstein AND Bob Woodward AND The Washington Post in one. And he doesn’t need paper to do his work.