Sunday, August 16, 2009

The Death of Newspapers, Continued

For many months, I've been bashing the newspaper biz, pointing out the myriad reasons why their business model has doomed them to failure while the rise of online media has served as an aggregation tool that's effectively shoveling dirt into the print journalism grave.

After reading Bill Wyman's lengthy, detailed article on Splice Today - Five Key Reasons Why Newspapers Are Failing - I'm raising my hand to acknowledge that my efforts are superficial at best. I'm missing the insider's view of the industry that Wyman possesses. In comparison, it shows.

Wyman's piece is an amazingly honest, thoughtfully presented articulation of the rot that has eaten away newspapers from the inside. If you believe the adage that "absolute power corrupts absolutely," then it won't take you long to understand that newspapers holding a local monopoly on distributing snippets of news wedged between lucrative advertisements makes them fat, lazy, and resistant to change until it's too late.

Here's an example, as written by Wyman:

That the model was going to change was obvious for many decades; even before the Internet age, papers saw their readership grow older, year by year, as longtime subscribers died and weren’t replaced by new, younger ones. This should have prompted rethinking and change—but it didn’t, really. Why? Because of a quirk in the way the newspaper industry was viewed by investors prevented that. Wall Street’s implacable demand for increased returns—ever-improving returns on a traditional net of 20 percent or more—which the papers and their parent companies focused on to the detriment of evolution.

From a financial perspective, consider this example as prima facie evidence of the collective insanity that exists among daily newspapers:

That issue of Time was still on newsstands when the editor of The San Francisco Chronicle, which had been losing $1 million a week for years before the current recession hit, was telling his readers that it cost the company $10—10 dollars—to deliver a Sunday Chronicle to their homes.

He didn’t explain his math, but let’s give him the benefit of the doubt. And let’s say that the smaller average weekday paper costs less, maybe $6, to print and deliver. In other words, if we can trust his figures, it might cost the Chron at least $45 a week just to print and deliver a single subscriber’s paper. The paper is currently offering eight weeks’ delivery to new subscribers for just under $8 a week. 

Since I'm such a hack compared to Wyman, you really need to invest fifteen minutes of your life in reading his piece. You'll come away with a much better grasp of the issues at hand, and if you're like me, much less sympathy for newspapers as a whole.

Image by inju via flickr

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