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:

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