Ostrich meets sand

The Wall Street Journal has an incredible piece of Brigadoon on its op-ed page today: the editor of the Arkansas Democrat Gazette, Walter E. Hussman, arguing that newspapers are killing themselves on the internet.

One has to wonder how many of the newspaper industry’s current problems are self-inflicted. Take free news. News has become ubiquitous, free, and as a result, a commodity. Anytime you are trying to sell something that becomes a commodity, you have lost much of the value in providing that product or service.

Not many years ago if someone wanted to find out what was in the newspaper they had to buy one. But not anymore. Now you can just go to the newspaper’s Web site and get that same information for free.

The newspaper industry wonders why it is losing young readers. Those readers might be young, but many of them are smart, not to mention computer-savvy. Why would they buy a newspaper when they can get the same information online for free?

Amazing. I thought that in the aftermath of Knight-Ridder’s and Tribune’s collapses, the American newspaper industry was waking up. But there are still Brigadoons that resist change at any price. Hussman thinks he can still hold his consumers by the throat and make them do what he wants them to do: ‘You vill buy my newspaper.’ He brags that he keeps his news behind a subscription wall. So I go to his site and click on this story and get only the first few graphs. But it’s a story from the New York Times wire and I can get a more current and complete version for free here.

Mr. Hussman, your days of being able to control your market as a news monopoly are over. Rather than trying to preserve the past, I’d suggest that you try to figure out how to prosper in the future.

  • http://www.manwithapen.com Paul Vigna

    Newspapers make the majority of their money off advertising, and Hussman knows that, so it’s a little silly of him to lament the lost newsstand revenue.
    The problem for newspapers in the Internet age is slightly ironic: despite the fact that a website has essentially unlimited space, there isn’t as much room for advertising on a web page as there is on a newspaper page. Ads comprise roughly 60%-70% of the entire contents of a newspaper, and the industry needs to figure out how to replicate that on the Internet. When it does – and they will – this time will all be only dimmed remembered as some unpleasantness.

  • http://www.thefutureofnews.com Steve Boriss

    The roots of this problem are in the culture of newspapers, which are accustomed to sharing news without worrying about where the money will come from. It began with their collective formation of the AP, which distributed their material to other news outlets, including local broadcasting outlets. For most of the 20th century, no worries — other newspapers printing their stories were in other cities, while local broadcasting outlets could not compete on depth. But now we have the Internet. And now, even the AP is publishing their same stories in their same markets. Steve Boriss, http://www.thefutureofnews.com.

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  • Mark Rutledge

    Newspapers, including the Arkansas Democrat Gazette, still have a powerful edge in the news business: local news. I subscribe to the online version of my hometown newspaper, The Johnson City Press in Johnson City, Tenn. I read it every day in a pdf, page-by-page format. I can read every story, every ad, every editorial in the same sequence as my dear sweet mother — only I don’t get ink on my fingers. There are a few minor inconveniences (the obits appear nearly too small to read unless you call them up in a window, and ads sometimes do not enlarge in the window) but it’s mostly the same newspaper. I am surprised at how quickly I’ve adapted to reading the paper online. If the paper I now work for offered an online, page-by-page version, I’d drop the home delivery.
    My point is, newspapers are catching up to the Internet. We could always get news from sources other than our hometown newspaper — except the depth of local coverage. The Internet has not changed that. The sooner all newspapers are completely Internet-friendly, the better for all newspapers.

  • http://www.claudepate.com Karl

    Paul Vigna wrote:

    “Ads comprise roughly 60%-70% of the entire contents of a newspaper, and the industry needs to figure out how to replicate that on the Internet. ”

    Respectfully, no. The industry needs to figure out that the Internet is a different medium and replace the ad revenue with advertising that is not so intrusive as to keep folks away from their sites. Or encourage advertising sufficiently compelling to interest its readership. The newspaper industry needs to stop calling itself the newspaper industry (and thinking of itself as such), because its future has little to do with paper.

    Substantively, local news outlets need to figure out that they are local news outlets and that their competitive advantage is local news. To the extent that “newspapers” intend to remain wedded to text as their main method, they need to realize that the competitive advantage of text is its capacity for in-depth reporting (though news outlets of the future may figure out that they could do long-form video online — or in-depth reports with multimedia elements — unconstrained by the time demands of a half-hour newscast).

    Alternatively, they could invest heavily in buggy-whips, as that market is wide open.

  • http://www.soldiersdad2.blogspot.com Soldier’s Dad

    Being familiar with he publishing business, the “cost” of a printed newspaper that one pays buys at a newstand barely covers the cost of distributing the newspaper, never mind paper, ink, editorial staff.

  • http://marginalizingmorons.blogspot.com/ CaptiousNut

    The ostrich buries its head in the sand?

    I thought we already debunked that?

  • http://deleted Tansley – addendum

    How about ‘MASTODON MEETS TAR-PIT?’

    For Karl:

    Whether it’s from subscriptions online or advertising dollars, the revenue to sustain the online version of any newspaper is going to have to come from somewhere. Now, the overhead on a news organization existing exclusively online is going to be substantially lower than than of a printed news organ – no presses, no paper, no pressman’s union, etc. – so the online edition can subsist on quite a bit less revenue that a full-blown newspaper. But there will still need to be money coming in, and you’ll find the best resource of that remains advertising.

    If you want to get PICKY about advertising quality, I suggest you remember that ‘beggars can’t be choosers.’ Much as you may wish to carry ads from, say, Bausch and Lomb®, you may well end up having banners touting Comet Cleanser®…

    I agree with you that the newspapers’ have the competitive advantage in local news, but I do not believe that the buggy-whip is a viable investment alternative for such institutions. I believe investment in funerary plots would be far more appropriate and lucrative…

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  • http://blogumentary.typepad.com Chuck Olsen

    You know, my mom likes getting the Sunday paper because of the ads. She can sit at the kitchen table and see what’s on sale at Target this week, peruse all kinds of stuff she may or may not actually need.

    It seems like newspapers should come up with a creative incentive to mimic this experience online. Coupons? Is that too old-fashioned?

  • http://deleted Tansley – addendum

    For Chuck Olsen:

    You know, that’s one of the MAIN arguments I use for keeping the paper, every time my wife brings up canceling our subscription. I think you’ve got something, there…

  • http://blog.agrawals.org/tag/newspapers Rocky Agrawal

    Actually, Chuck, you can get a really slick version of the Target circular online. Read more about it here:
    http://blog.agrawals.org/2007/04/08/advertisers-disintermediating-newspapers-too/

    Most of the circulars you’ll find in the Sunday paper are available in easy-to-use form. Not so much the coupons, though.

    The biggest problem facing newspapers is that most of them (WSJ is a key exception) are largely aggregators of commodity content. Wire stories, TV listings, stock quotes, features… all of these are now available directly from the real sources online. The cost advantage newspapers had in being the most efficient delivery mechanism has been eliminated by the Internet.

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