The death of mainstream media

This week's Economist has a great lead article on the issues facing the Newspaper industry.  There is an additional article that expands on the issues in a special report on the industry in the magazine (pages 52-54 available only via subscription).

We've seen the impact of Craigslist siphoning off the classified ads to the Internet with the resulting decline in ad revenues and the reported 18% decline in people employed in the newspaper industry over the last 15 years.  More recently, mainstream journalists such as Om Malik from Business 2.0 are re-inventing themselves and the media on the Internet - more journalists will surely follow.

The view of mainstream media (newspapers, entertainment, publishers etc.) has always been that their selection of content was their value add.  The Internet has turned that upside down - aggregation of niche content and community selection is displacing editors/producers and undermining the business models of the incumbents.

I wonder whose next?

Comments

[Fred Vogelstein]

hey stu -

re newspapers - I think you're half right. Disaggregation of content is certainly a problem , but I'd say that commoditization of content is a bigger issue . It used to be that it was important for the Chronicle to have the same national and international stories as the New York Times because its readers demanded it. Why? It was either impossible or expensive to get the New York Times outside of New York and Washington. Now that's no longer true. That means there is no longer a market for news from various outlets that is repetitive.

But it's important not confuse that with lack of interest in any mainstream media news at all. I think there will always be a market for the best content , and I think that people will willingly pay for it - aggregated or disaggregated. The old example is the WSJ, but take a look at NY Times Select - about 200,000 paying customers in about nine months. These are new readers. People who get the paper don't have to pay for Times Select and the printed paper's circulation has been flat to up in the past year.

What does that mean for the newspaper industry? It means that for savvy companies who can focus on delivering unique content to their readers, the web offers them a BETTER business model - not a ticket to bankruptcy. They get to stop spending on presses and instead sell their content like software - with near zero marginal cost.

There will be lots of pain as companies make this shift and lots of journalists like me will be out of work, but long term the industry will become more not less profitable.

[Stu]

Whoops indeed! Blogwhacked! Fixed and apologies to both Om's.

[M]

Um, you mean Om Malik? Whoops