Is There Any Hope For Newspapers?
By Anna Johnson on July 8th, 2009Silicon Alley Insider has deemed 2009 to be the year the newspaper died. Well, if it didn’t die this year, it’s probably fair to say that 2009 was the year the newspaper went into free-fall.
In the United States, at least, the facts paint a pretty stark picture of the plight of newspapers. We’re just over half-way through the year and already:
- 105 newspapers have been shut down.
- 10,000 newspaper jobs have gone.
- Print advertising sales dropped by 30 percent in the first quarter of the year, perpetuating a downward trend that is likely to continue.
- 23 of the top 25 U.S. newspapers saw circulation drop by 7 to 20 percent.
The downturn in the economy has certainly reduced advertising budgets, but it has only really exacerbated a decline brought about by more fundamental shifts in media consumption and, consequently, advertising expenditure and newspaper revenues.
The two main shifts, as I see them, are these:
- Job seekers, car buyers, house hunters and, increasingly, local services consumers, prefer looking for jobs, cars, jobs and local services online… simply because that’s where they will find more helpful information provided to them in a more helpful way.
- News and information consumers prefer consuming content online… because the Internet offers a greater diversity of information, greater variety in how that information is presented and can be consumed (including via multi-media), and much of it ‘feels’ free i.e. there’s no cost above the cost of accessing the Internet which is what they would pay anyway.
The fact is that newspapers no longer lead in the two key respects in which they have traditionally led: classifieds and news. The Internet simply offers consumers and readers a better experience in both areas.
Moreover, the old argument that newspapers are more enjoyable or convenient to read just doesn’t wash. Even if true, we need only consider the trends outlined above to conclude that the joy of reading a newspaper just doesn’t outweigh the advantages of going online.
Meanwhile, devices such as Amazon’s Kindle are emerging to provide a similarly pleasant experience… with the added benefit of delivering all the advantages of the Internet as well.
As consumers abandon newspapers for the Internet, so too do classified advertisers and display advertisers abandon newspapers. And that’s why newspapers have lost – and will continue to lose – money unless they can come up with a hugely compelling reason for consumers, readers and advertisers to come back to them.
Unfortunately for newspaper publishers with huge sunk costs in printing presses, distribution networks, and other fixed costs, it’s not so easy to switch all that infrastructure off and simply ‘go online’.
But they’ll need some kind of strategy to exit, or at least reduce their print businesses, if they are to survive at all…
Source: Preethi Dumpala, “The Year The Newspaper Died,” Silicon Alley Insider, July 4, 2009
