Advertising plunge will kill newspapers and there won’t be a bailout.
That’s the headline of a blogger and former journalist I really admire, Kiyoshi Martinez.
Kiyoshi is a reformed newspaper and online journalist who now works as Illinois Senate Republicans Staffer for the State of Illinois.
In addition to his blog, Martinez also created the popular sites for laid off journalists at AngryJournalist.com and Journalism.me.
I would have responded in comments to his blog - but I am not a fan of Wordpress comment registration. There are tools I like better to manage comments on the WP platform, but I digress.
The point is that instead of commenting directly, I responded to his essay by using my Twitter feed.
At first promoting his topic for my followers to notice by linking to it.
And then I followed up with a few more tweets in rapid fire, stream-of-conscious logic.
And then . . .
Which begs the question every U.S. journalist should have for the CEOs and boards that operate their companies in the U.S.
So thanks, Kiyoshi. Your post got me thinking about the issue in a new light and in spite of the 140 character limit of a Twitter SMS - I was able to craft a response in chunks.
What are your thoughts and tweets?
Thanks for the plug. Sorry about the whole registration bit. I accidentally had that checkbox on and didn’t realize it until today when a friend mentioned it. I typically just make all comments hidden until approved (I’m a personal fan of moderating all comments).
I think a big reason why the newspaper business model is dying in the U.S. has a lot to do with our society itself. Now, more than ever, we’re sprawled out into the suburban areas and many of us (I’d dare say a majority) spend our morning commutes driving back and forth.
Newspapers in this area lose their advantage because there’s literally not enough time in the day, each and every day, to read a whole newspaper. Unless you’re commuting via public transit (something that I love about my job), then you don’t have that luxury of time in the morning to read the paper on the way to work.
And now at home, many of these people turn to the Internet for the news (I know this is a “duh” point), because it’s quicker and faster to get relevant information they want. Also, the Internet provides a great amount of time-sucking distractions than ever before with the rise of broadband so we can watch video or play games online.
All these things add up.
Circulation is falling because the money a person pays for “just the news” could easily be put into other areas that provide more bang for the buck. If you’re paying $30/mn for a newspaper subscription, then why not pay $30/mn for broadband Internet instead and get a much more robust information experience? Plus, there’s the almost endless benefit of interactivity of content that the Internet provides, too (sharing, contributing, creating, etc.).
Once people realized this, they weren’t going to turn back. I wonder if anyone has done a poll of users who read the paper and how many of them spend more than, say, 7 hours a week (hour a day) on the Internet?
I think Americans are spending more than ever on consuming information and content, but we’ve just shifted it to other industries that benefit directly from it. The newspaper online is getting “trickle down” revenues from the gatekeepers if you think about it. The ISPs are really the new newspapers when it comes to massive subscribers.
The most successful papers right now are free commuter rags, like the RedEye, which are free and focused on just hitting a narrow group of readers that take public transit in a metro area. But once smartphones become every cell phone out there (and Google’s smart for realizing this by getting in on the ground floor with Android), I think those papers will come under attack, too.
Mobile advertising, in my opinion, is the one area that hasn’t been completely dominated yet and is up for grabs. As print advertising fades, we moved online and now are witnessing Google’s contextual search ads take over in that space, but mobile advertising hasn’t seen it’s revolution yet.
If newspapers were smart, then they would start there. Call the Internet a lost cause. They can’t ever win there. Keep print around long enough to sustain you. But start betting your future revenues on mobile. Of course, none of them have the money right now to do R&D necessary to get this off the ground.
The next area I’d focus on would be services. But that’s a blog post for another time and this “comment” is getting way too long.
Great comment! I agree that the commute is a big factor but there must be a way to re-engineer a typical suburban U.S. newspaper to be a must read.
But it will take more radical approaches to meeting a reader’s expectations than anything we have seen yet. You literally have to redesign the company from the ground up starting with a new executive team, then design a new product and then go out and staff it and produce it. That’s how the Swiss experts help companies in fledgling industries retool their business models.
What we don’t have, fundamentally, is an industry in the States that is nimble enough to respond fast enough in the fashion necessary.
So perhaps from the ashes new phoenix’s will emerge. That is my prediction, but crashing and burning will not happen without significant retooling. Like Yelvington said in the tweetbacks, It is the debt load that will crush some media empires here.
Apparently there will be no bailout for U.S. newspaper groups or seeding of recapitalization money from the government.
They would rather close, I presume, than have any government ownership or backing.
You have to wonder, though, if newspaper haven’t suffered more from public ownership (Issuing stock, getting rich and bowing to the demands of Wall Street) than they would ever suffer under subsidies.
Newspapers abroad seem to be able to publish independent, high-quality papers that sell really well and they have suburbs and time-starved readers, too.