My Cousin Michael just wrote and asked:
Are newspapers really losing money because of the internet? Are larger newspapers — like the NYTimes and WSJournal — losing money?
I would like that, at least for these papers, the internet has tremendously expanded the number of people they reach — and thus should increase their advertising revenue.
I told him newspapers are losing money for two reasons.
First, the Internet has killed their cash cow–classified ads. There is no longer a market for paid classifieds. There are also new ways for companies to promote themselves over the Internet. Beyond that current market forces price Internet impressions way below newspaper impressions. Same goes for TV.
Second, people are less likely to subscribe to a ‘stale’ newspaper when they get the same info for free on the net. As TV killed afternoon papers the Internet is killing morning editions. Subscriber rates have been plummeting.
It is sad because newspapers serve a valuable place in our society. As our collective societal memory a case can be made they’re valuable even if they’re not read when published! Certainly they produce the bulk of investigative journalism and keep watch on our government and those with power.
There’s going to be a lot of newspaper blood spilled. Probably some TV blood too. Smart operators will adapt as the business model evolves.
The good old days are always behind us.
Someone just passed a memo to me, no more than an hour old, from the publisher of the Hartford Courant to his staff. News pages will go from 273 to 206 per week. Subscribers will only be getting 75% of what they get now in quantity. The newsroom will go from 232 to 175. The reduction there is also to 75% of current levels. There will be voluntary buyouts and forced layoffs.