Dying Medium, saved by the New
As seen in the 1990s, the newspaper industry is still under attack by its content retreating to the Internet. Despite the demand for increased content online- which seems to slowly drain the life out of newspapers- there is still a demand for this old medium; as can be seen today with newspaper companies being courted by individual investors (David Geffen offering $2 billion for the LA Times, and Jack Welch expressing an interest to bid on the Boston Globe). Why would individuals risk billions of dollars into a seemingly “dying medium?” What do they see?
Since the availability of high-speed Internet, and the ability for accessing the web just about anywhere, the question came, how would newspapers survive? There seems to be a temporary solution—having traditional media find an ally with new media. This idea is not new. In 1992 the Chicago Tribune launched Chicago Online with America Online. Because of its success, in 1996 it launched its full online newspaper website, and has since been joined by other newspapers trying different formulas such as having to pay for online subscriptions, limited subscriptions, and full-out free online news mirroring the print version. The new relationship between the Internet and the newspaper is its partnership with media giants—Google and Yahoo! especially. While classifieds sites like Craig’s List and Monster have hurt newspapers’ circulation, it is possible that these media giants could help redefine the newspaper industry. As it is, there is a need for change as a study that BusinessWeek cited found that newspaper readership has declined 50% from a decade ago.
In October Google applied its online advertising formula, of bidding, with 100 advertisers in 66 newspapers. Essentially Google is selling excess ad spaces, of small black and white spots, within daily newspapers. The system developed by Google allows advertisers to choose the newspaper and section to run their ads. The newspaper will see the bid price that the advertiser is making and will either accept it or not. To date, there has been a strong interest, and newspapers have seen new advertisers. Although this does not look as though it will replace direct relationships with advertisers, it does appear to be an effective way of protecting lost dollars in ad space.
Questions to think about:
- Would this actually make me (23 year old, male) subscribe to a newspaper?
- Wouldn’t it be easier, or better, to do “on-demand sections,” where I can pay for the sections that I am interested in?
- Will these hurt national newspapers, but help small local ones? How does this affect advertising agencies?
- Does this do anything to address the problem with circulation?
- Does this matter?
- Google has already begun moving this method from newspaper testing to radio and TV. Is this the future?
Additional Resources:
- Forecast 2007: Newspapers (Mediaweek)
- WPP’s Sorrell Won’t Be ‘Disintermediated’ (Advertising Age)
- Google Set To Expand Newspaper Ad Program (WashingtonPost.com)
- Newspapers Changing Hands (Marketplace)
January 16th, 2007 at 8:04 pm
I agree with most of the points you make, except for the idea that newspapers are “retreating” to the internet. Newspapers are finally realizing that their potential readership is online. Instead of retreating, newspapers are finally catching up with technology.
January 16th, 2007 at 8:23 pm
I have to say I agree with Erin’s statement “Newspapers are finally realizing that their potential readership is online.” Now that newspapers have realized the potential of online readership they need to determine a different way to present the information. No one wants old news, especially when the internet has the ability of being up to the minute. It will be interesting to see how newspapers take the potential and run with it.
January 16th, 2007 at 9:33 pm
Although Google is filling in excess ad space, I do not believe it will help aid newspaper circulation. Newspapers are in an unusual position because they act simultaneously as a business and social institution. They sell to advertisers the opportunity to reach a specific audience’s attention and interests; however people do not buy a paper for ads, but ultimately for information on recent events that can have a considerable effect on society and their every day lives. Whether or not you fill in ad space, it won’t increase readership, but just the newspaper industry’s bottom line.
I also do not believe that the newspaper industry is dying or retreating to the Internet– People can be very loyal and stubborn to change, and newspapers, especially print, will be around for a long time because of three reasons— they are cheap, portable, and can be easily archived. Another major thing to consider is that not everyone is electronic savvy… many people will always prefer print over viewing a screen.
January 16th, 2007 at 10:07 pm
I disagree with Erin’s response. Although many would argue that newspapers “are finally realizing that their potential readership is online,” one must argue this. The Internet is not a new means of communication by today’s standard of adaptability of technology and communication. Text based global communication has been utilized by the private sector since the 1980s, at least. Although it can be said the Internet really began to be used by the masses in the mid 1990s, there is at least 10year gap where newspapers stalled to apply this new means of communication. Whether this delay is due to poor insight, stubbornness, or lack of willing minds to change from an old business plan to a new one, I am not qualified to say. Yet, it is oblivious that for years the newspaper industry had no idea how to handle the Internet. Newspapers have generally failed at efficiently utilizing the Internet as a means of communication, and revenue generation. They still have yet to become an adaptable entity.
In my opinion, newspapers will not die, nor survive. If anything the cunning papers will retool. Some articles such as “Papers battle online news sites” illustrate how papers such as The International Herald Tribune are becoming (or trying to become) media distributors; rather than just printed or Online newspapers.
Another perspective to consider is that newspapers ability to profit from the Internet have been hindered by their greed for money and stubbornness to adjust (similar to what the printing and paper industry have faced with the emergence of global communication through a digital means). As mentioned above, newspapers struggle with applying a 20th century business plan to a 21st century communication method. In other words, instead of deriving profits from other outlets or by other means, they continue to rely on pricey subscriptions of printed material for revenue. Yet because the same articles they publish in print are many times free to read Online, they continue to lose profits. It should be noted that local papers do not directly face the same dilemma as national papers. This is a result of the acute number of local Internet news outlets for people to go to. Yet, other means such as radio and TV supply local news to a younger generation that is Internet adapt.
January 16th, 2007 at 10:11 pm
Lindsay- I agree that people are loyal and stubborn for change. However, I think that within the next 10 years we will see a huge change…especially with Apple’s iPhone release this month. The phone has a full web browser. Certainly there are a lot of people that wouldn’t want to bring there laptop into the bathroom—and many that do—but by bringing the technology to a phone will certainly help push change.
January 19th, 2007 at 6:43 pm
The title of this discussion is very misleading. It’s not so much that the internet and other forms of media such as the iPhone are saving newspapers, but that newspapers are simiply learning to adapt, very late to a new era of information. They finally realized they are being killed in a new dynamic marketplace of which they used to be king and have to change the type of news they deliever. People no longer need the headlines, but a more in depth analysis and background of what the news means. The things that journalism was built on decades ago. It’s no longer about the story, but the interpretation, insight and ideas that the journalist brings.
And those pricey subscriptions aren’t were they are looking for revenue, its color advertising that is the cash cow of newspapers. The subscriptions are just additional means to cover the ever rising costs of delivery. Even Steve Jobs has recenetly been quoted saying that some of the greatest steps Newspapers have taken to increase advertising has been in some of the changes this year.
January 23rd, 2007 at 9:17 am
New Article published by Editor&Publisher, on January 22:
“Can Online Ads Save Newspapers?”
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1003535689
August 1st, 2007 at 8:43 am
[…] Rupert Murdoch has been acclaimed for his understanding of the role of new media within today’s society. As newspapers have been in debate in this blog (here, here, and here), and as Google has expanded it’s advertising model to include print ads (here) it will be interesting to see how Murdoch’s forward thinking will affect the print industry—specifically the newspaper industry. Thoughts? digg_topic = ‘design’; digg_skin = ‘compact’; Blog Home | lukeMV.com […]