Friday, November 7, 2008

I've decided to add some occasional posts here, in addition to Bits.

I saw Frank Shaw comment on an blog post, talking about the Darwinian pressures on the news business. Yes things are changing, but I find much of the talk about MSM to be overstated and not so precise. I left this comment on Frank's blog:

Frank you still overstate the change.

Big picture: There is a modest evolution in the content model for news media (More competition and distribution options, more interactivity and user involvement, faster time frame). For newspapers certainly, the advent of the Web is far easier than the advent of television. All this other stuff is hooey.

Most media have the same business model: attract an audience and sell it to advertisers. Subscription revenue is harder to come by.

The only real revolution, I'm sorry to say, is with newspapers, which made so much money from advertising (classified, etc) that was related to their distribution, not their content.

All that really means is that newspapers will have to get smaller until their news budget matches the ad revenue from the content they produce. 

Cheers 

Saul

2 comments:

Rosenblum said...

Dear Saul
Here I am forced to disagree. The challenge presented to newspapers by these new technologies are really life and death, and those who fail to understand that and adapt are going to end up on the latter side.

It is true that the only thing that has shifted is the platform for distribution, but that represents close to 75% of the cost of publishing a newspaper. Only 15% on average goes to the editorial side. Papers that engage in incrementalism, or cut their news budgets until they match now truncated revenue are on a quick road to termination. The cost of producing a physical paper will continue to increase and the circulation (and ad rates) will continue to drop. It is a path to nowhere.

Imagine this: Where World Book faced with the prospect of buying Google for $1 million in 1990 (as was Yahoo)... but that it meant closing down the book publishing plant... would they have done it?

Catfitz said...

Saul,

Could you let us know what the revenue is for the New York Times for their paper ads in 2008 and 2009, and what their online advertising revenue is?

My understanding is that the online revenue is substantially less than the paper edition, and throws into crisis the very notion of being able to survive on advertising.