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I read a fascinating article in the Economist concerning the problems that the Internet is creating for the newspaper industry right across the West because nobody wants to pay for content, they all want it for free: http://www.economist.com/businessfinance/displayStory.cfm?story_id=14072274

I have every empathy with the plight of newspapers because their business model of selling a newspaper at below cost but making the income up on advertising is being considerably disrupted by the Internet and the industry has yet to formulate any workable alternative business model to the one that exists.

Rather Odd

The following is broadly what I posted in reply to an article which frankly reeks of special pleading from a newspaper that concerns itself with business efficiency and so forth:

It is rather odd to see in the Economist such an article, if it were any other industry such as MG Rover, the thrust would most likely have been very different and along the lines of “Close it down if it is uneconomic !” but you too are part of the “newspaper industry” so, I guess rather different rules apply ?

During the 70/80′s print as a source of news gave way to TV as the main source of up to date information with the “quality press” giving the insight and depth behind the headlines, the problem was, just as the Sun expected every builder to have a dump whilst reading their “purely entertainment” copy of the Sun, so too the “quality press” expected their clientèle to continue in the same old way, neither assumption was true.

Failing to Keep Up

Fleet Street and their global equivalents have simply failed to ‘keep up with the times’ and accept that the old business model of news/readership numbers/class classification of them by numbers equals advertising revenue plus daily publication costs defrayed by retail sales equals, a potential profit. Today totally untrue and may I enquire just why any journal should expect ‘charity’ to keep them in employment – totally ridiculous.

Pooling and sharing contributions to an “access all areas pass” for any subscribing individual (consumer) in any one Country may be one model although the cat fight in the US between the New York Times and the Chicago Herald Tribune might be a wonder to behold. To be honest, it is the wrong ‘model’ for a realistic business and none will agree to ‘share’ appropriately.

Perhaps when staring down the barrel of a gun and faced with going out of business, the various media businesses may on a national basis come to some agreement on a pooled access all areas and publications annual charge, the charge per article hardly seems appropriate or even workable.

Alternatively

As in any business, one needs to look at exactly what is being done at every level. If we start with the concept of “News” from anywhere in the World, does it really matter who collects that locally ? It might be an employee of the BBC or, NBC but if we pool news gathering as RAW data, not only do we reduce everyone’s overheads but also, allow for greater journalistic interpretation on the ‘facts’ thus presented.

The reason this article is tosh is simply because it is “special pleading” for individuals keeping their current jobs rather than forward business thinking which may increase job opportunities with greater intellectual freedom on how that job is done. In a sense it is rather like keeping an uneconomic steel mill open and should be looked at in the same way.

Advertising Agencies

The British Advertising Industry is acknowledged as being highly creative over many years but, one needs to understand just how that business has changed radically since the 1950′s.

Then there were “full service advertising agencies” who promised to supply their clients with everything, newspaper advertising, point of sale, posters, TV, Radio and …etc.

The market disintegrated and splintered, what were once divisions inside one company became independent business units dedicated to specific functions: Advertising Creation, poster displays, film, TV, radio, media buying, market research, branding specialists or whatever… The game changed and however uncomfortable at the time, it changed for the better and the printed media is no different, time it too changed.

The BBC and others like it need to concentrate on news-gathering and selling the raw data to their fellow broadcasters, how the “Well Intentioned Muppets” in the media, “formerly known as the Media” decide to act is not too important, relieved of production and distribution costs, they can make money out of sharing information, then again, they maybe the next Stalin, who knows ?

It is About Change

All of this has major impacts especially on organisations like News Corporation and Sky who have expended so much effort on buying up every live sporting event going plus diversifying their business model to include Internet, subscription as well as conventional newsprint. Will that business model survive ? Well they have more chance than most but it is not a slam dunk by any means given “time shifting” in TV viewing habits and the move towards highly focused advertising that concentrates on specific consumer profiles.

Printed newspapers have no “Divine Right” to continue as they are, as in any business they need to change and I suspect the the UK Advertising Business is most likely the route they need to go in most ways, many businesses largely using freelancers who service parts of the news gathering and dissemination process with much smaller “Front Page Titles” that exist only on the Internet.

Economist journalists who berate various businesses for “Not Keeping Up” and taking the hard decisions to deliver value to both owners and customers should not be ignoring the mote in their own eye.