Newspapers are dying because the half-life for headlines today is much, much shorter today than it was in the past and because other options are faster and free. Today's printed newspaper is by definition yesterday's news. Who wants to pay for old news? Imagine a web site that charged for yesterday's news. Wouldn't it fail miserably too?
The problem is that online news isn't really free -- it requires funding from the dying offline business because online news doesn't have a viable business model. In fact, a lot of people don't start with the news provider's site at all -- we start with news aggregators and then do quick dives into provider sites without leaving a trace of revenue in their pockets. This simply can't last. The offline business will go broke before the online business can be made workable at this rate.
Successful news providers in the future will need to start with a much cheaper cost structure to match a much lower revenue model. Current media companies may not be able to make that transition. None of them are moving fast enough, and most won't even acknowledge the simple reality that there is simply no future for the printed daily newspaper.
"The problem is that online news isn't really free -- it requires funding from the dying offline business because online news doesn't have a viable business model."
Very True. An online reader is just not worth much. Even if they do get you onto their site.
"Successful news providers in the future will need to start with a much cheaper cost structure to match a much lower revenue model. "
The business model might just be collapsing. And that does not necessarily mean a new one takes its place. I mean I can't take the 'new music business models' (t shirts and personalised songs & stuff) seriously. Sometimes industries collapse. Print news might be one of them.
"Successful news providers in the future will need to start with a much cheaper cost structure to match a much lower revenue model"
How about 0 cost (99% of blogs) & 0 direct revenue. BTW, for writer I think the alternative business model is more feasible. Books, appearances, lectures etc. A good few big name journalists could pull this off. Quite a few bloggers (in the business blogging field at least) do.
Shafer's a friend and a very sharp guy. There's a lot to his point that newspaper no longer carry as much social currency.
But I tend to agree with kennyroo's point about cost structure a lot more. Newspapers are used to spending X to get the news out there and making X+1 on the transaction. Now they're making X-1 on the transaction, but are still more or less spending X to get the news out there.
They're trying to change, but they need to more or less lay off their entire print production staff to really make it work. The unions will never allow this. So major papers will continue to drift downwards until they either shut down or take the steps necessary to be profitable, lean businesses.
As a journalist who recently finished up a master's degree and had to decide what to do next, I chose to turn down my job offers, teach myself Drupal, hang out on Hacker News and bootstrap a new Chicago news site at http://www.windycitizen.com
More than a few classmates, most of whom are now writing for B2B publications, dailies and magazines thought I was being foolish, but it seemed like the best bet out there in the long run. The papers are only going to keep falling apart. I believe I can develop something from scratch with a cost structure that will let us either become an acquisition target for an existing media company or get back to X+1.
The Citizen is a blog network focused on Chicago, produced by a growing community of local media makers who want to expand the local conversation.
This past weekend, we attacked Lollapalooza (http://www.windycitizen.com/blogs/lollapalooza-blog), and by approaching our coverage with a startup mentality, the two of us who attended scooped the big dogs all weekend long with video, pictures, reviews, links and news from the festival.
If there are any Chicago-based hackers out there interested in getting involved, hit me up through the site. Scooping MTVNews at one of the major music festivals is a real rush.
There are a lot of reasons why newspapers are dying. My vote is for the "our business model fell apart" explanation. And unlike most of the journalists I've met, I'm putting my money where my mouth is by trying to bring something new to the table.
Most still have big profit margins, which is one of the reasons they are getting their ass kicked. For the first time in decades they are faced with a strategic threat, and instead of cutting margins a bit and investing their way into better position they've been cutting full time beat reporters, their only advantage over the talking heads. (I used to be a Newspaper Guild member, but never worked for a paper per se. It's complicated.)
I´m not really sure we can talk about news as a single entity.
News are made of many different kinds and groupings of information. For example financial, sports, classifieds, tech, auto, regional, local, international, entertainment , ... oh programming and hacking, etc.
I think newspapers have fullfilled diverse roles such as,
Aggregating, Distributing, Reporting, Investigating, Opinion writing
Some of these are now irrelevant, such as aggregation and distribution.
While others are still up for grabs.
People have it stuck in their minds that cews companies are unchangeable or something???
Newspapers are in or moving to all the new media places as much as anyone. They've been blogging for ages, have facebook pages, use twitter, have reader comments and voting ala /. or reddit, or HN, produce video, host live chat/blogging, etc. Or at least the one I work for does.
Technology and industry is changing. Newspapers are trying to change with it, just as they have with other tech innovations. Unlike say Music Industry who is fighting tooth and nail to keep their broken ass business model.
Down here (Australia), 'Fairfax Digital' the online version(s) of 'Fairfax Media' - the 1 ton gorrila of Aussie media, probably has kept it's market share of the key areas online. The have the #1 job site, real estate & they are doing ok with cars, personals, buy/sell and other traditional media cash cows.
In terms of market share, I wouldn't be surprised if the (society's) move to online media has not been a net gain for them.
However, they were in a pretty cushy position before. They had to compete with 2-3 other media giants. Now they are in constant danger of assault from under the radar. Google maps may make real estate sites useless.
It seems improbable that 5 more years will pass & noone will figure out an online dating or car selling or something that will take out their sites.
Basically, if I were them I'd feel like it's almost impossible for them to hang on to dominance for long.
Here's a potentially interesting angle: Digital print isn't killing newspapers.
One major barrier to entry (bottleneck) was printing. You needed a certain volume & a certain infrastructure to print papers.
Digital print really lowered that barrier. You can now get in at a fraction of the distribution volume. But we haven't seen a proliferation of papers. What does that mean? Could this mean that they are already dead in the air?
What're the other options? That the bottleneck they used to control is not something they've been leaning on? That seems unlikely.
Interestingly a lot of the social currency has shifted to usergenerated news sites such as HN, Slashdot and Reddit. Maybe this is where the future of news lies?
LOL! In the real world no-one cares about Slashdot "news". Stuff that matters indeed. Yes it matters a lot to the tiny demographic of self-proclaimed "Linux nerds" but to 99.99% of the population it's utterly irrelevant.
Interesting read and some good points. My own opinion on newspapers (mostly tabloids) is that they are generally full of reams of inane comment, sensationalist reporting, and too much space is given to celeb culture.
With the internet I can skip all that rubbish and not have to pay for the privilege.
The problem is that online news isn't really free -- it requires funding from the dying offline business because online news doesn't have a viable business model. In fact, a lot of people don't start with the news provider's site at all -- we start with news aggregators and then do quick dives into provider sites without leaving a trace of revenue in their pockets. This simply can't last. The offline business will go broke before the online business can be made workable at this rate.
Successful news providers in the future will need to start with a much cheaper cost structure to match a much lower revenue model. Current media companies may not be able to make that transition. None of them are moving fast enough, and most won't even acknowledge the simple reality that there is simply no future for the printed daily newspaper.