It ain’t over

It wasn’t Craig’s fault. It was the internet’s. Almost $10 billion in annual newspaper classified revenue has disappeared (since its 2000 high, versus 2008) and it was essentially replaced by an estimated, unverified $100 million for craigslist with fewer than 30 employees.

But the bleeding ain’t over yet. The stone still has a few more corpuscles to squeeze out.

Look at the newly enhanced Google real-estate search. It’s awesome: useful, fast, informative, entertaining. Put in an address, browse all the homes for sale around. Who needs a newspaper? Who needs a real-estate agent? Speaking of whose death, see Michael Arrington reporting that disruptive, inexpensive real-estate service Redfin is turning profitable. Now see how classified aggregator Oodle is distributing classified ads on Twitter, which has also become the new distribution channel for news (challenging not just newspapers but also craigslist if you’re in the news biz and in the mood for a little schadenfreude).

Of course, this adds onto the the closing of thousands of advertising car dealers; the death of swaths of retail (e.g., Circuit City; and that is far from over, I think); the consolidation of more retail (and then the consolidator, Macy’s, cutting ad spending by half).

But that’s just advertising. I think that other arenas of newspapers’ competence could be targets for similarly disruptive attacks.

In content, I’m seeing that it’s possible for someone to come along with relatively little investment and a much smaller staff that operates more collaboratively to compete with the big, expensive traditional newsroom at low cost.

In distribution, it’s not hard to imagine someone – oh, say, News Corp., which already controls coupons in the U.S. – to take over distribution of other FSIs (free-standing inserts – that is, circulars) and undercut the hell out of newspapers and the postal service. Distributing those ads is the main reason papers want to keep printing at least a day a week, for now.

It’s bad in the industry now but it’s going to get worse as audience shrinks and advertising consolidates or migrates. There’s no quick fix: putting up pay or copyright laws or begging for favors from pols. The only solution is to rethink and rebuild the industry – and to do a better job of it than GM has.

  • http://sometimesdaily.com Amanda Congdon

    You are right, Jeff! Jobs are changing… & not just newspaper ones. Where did all the travel agents and, as you mentioned, real estate agents go? I’ve never even once used a real estate agent– Craigslist has always, literally, “done the job”. Craigslist has gotten me 8+ apartments, houses and sublets of various varieties over the years (since 2003). Oh yeah, I move a lot.

    • Ameret Budihas

      I’ve been in the real estate/legal field for 20+ years. I am currently trying to sell my 3rd home in a town that supposedly is in the top 10 stablest markets in the country-Hinesville, GA. However, I realized that my real estate agent (whom I worked for two years) is unable to comment on many of the pluses and minuses of living in each neighborhood. Hinesville has a bad reputation for its schools, however after moving to Kansas a few months ago and getting my kids registered for school they seem to be a head of what is being taught here in KS. We are a military family and yes move a lot. Each new duty station comes with a lot of word of mouth about schools, shopping, neighborhoods, etc. from other military families that have lived there.

      My agent is good and honest, at least in my opinion, however is a little hampered by non-discriminatory laws. That is a good thing, but doesn’t always get the full story out about a neighborhood. Maybe blogging would help, maybe not. I am sure there are better ways to buy and sell homes, but I haven’t figured it out yet, especially from 4 or 10 states away from the actual house.

      I’m just getting into this blog discussion thing and not sure what I am doing, but am willing to take the risk and put it out there to see what comes back.

  • Rob K

    Jeff

    I love your blog, but your math doesn’t stand up on this one.
    Newspapers lost the $10B of revenue, but they lost it to generation 1 Internet companies like Monster and CareerBuilder. Those 2, plus HotJobs, Dice, and other niche generation 1 job boards do about $2B of revenue in the US.

    It is those companies (plus whatever was left with newspapers) who are getting killed by Craigslist and LinkedIn.

    I also agree that the entire classified model of newspapers needs to be re-thought. It can be, but not when you’re defending every last nickel of print revenue, nor when you’re willing to go online, but only though a generation 1 model like Monster or HotJobs (which whom most of the newspapers).

    • http://www.buzzmachine.com Jeff Jarvis

      Rob,
      You’re right, of course. I’m paraphrasing the usual formula, which blames craigslist. In any calculation, billions and billions were left in the pockets of those doing the transactions rather than advertising middlemen that trend will only continue, I”m sure you’ll agree.

      • http://www.ericreasons.com Eric Reasons

        The big question for me is, if those billions of dollars are “left in the pockets of those doing the transactions”, what are they doing with it?

        They aren’t investing, they aren’t spending on cars or homes. I think right now we’re pretty much shoring up our losses from the credit/housing bubble, saving and paying down our debt. The flipside is that many people are losing work as well, so maybe we’re just hanging on.

        This deflation is working counter to all the efforts by governments and corporations alike to re-inflate traditional bubbles. The question is to determine whether we can take advantage of these billion left in our pockets and put it to good use, or whether they will be usurped to put failing business models on life support until they collapse entirely, leaving us nothing much in the end.

        http://blog.ericreasons.com/2009/07/innovative-deflation.html

  • Rob K

    fixing typo:

    It can be, but not when you’re defending every last nickel of print revenue, nor when you’re willing to go online, but only though a generation 1 model like Monster or HotJobs (which whom most of the newspapers have partnered).

  • http://frogblog.biz Fred H Schlegel

    Spines are tingling. I still remember when our assistants (or secretaries) became a thing of the past for most of us due to computerization. In addition to the threat of freely flowing information, any commission that depends on complexity or confusion to control transactions should be shaking. Standardize the transaction and even lawyers can become unnecessary. Course its going to take a bunch of imagination to come up with new jobs to replace the ones cut. Efficiency won’t matter if we’re all shaking tin cups on the street corner.

  • http://www.erictyson.com Eric Tyson

    Jeff: You say:

    “Look at the newly enhanced Google real-estate search. It’s awesome: useful, fast, informative, entertaining. Put in an address, browse all the homes for sale around. Who needs a newspaper? Who needs a real-estate agent?”

    Google is tapping Realtors MLS service for homes for sale listings. Since we’ve had cars to drive around in, it’s never been hard to find homes for sale in a neighborhood so Google isn’t yet changing the home buying process through their search which is hardly unique. The mapping feature has been available elsewhere for years on popular sites like Realtor.com.

    - Eric Tyson
    Co-author of Home Buying for Dummies (Wiley)

  • steve

    not sure anyone HERE really cares, but (since mr. jarvis mentioned fsi’s)valassis is attempting to sue its way to profitability by going after news corp.

    the first (of three) valassis v. news suits is underway in downtown detroit.

    valassis seems to have bit off more than it could chew by overpaying for junkmailer extraordinaire advo (sound familiar?) instead of bringing their core business into the future. now they hope they can get news to bail their lame ass out of the mess they find themselves in.

  • http://www.soapboxincluded.com Brandon Mendelson

    I agree. I’m just disappointed every time I talk to my friends in the newsroom that no one is talking about changing anything. It’s like talking to the walking dead.

  • http://www.howardowens.com Howard Owens

    “In content, I’m seeing that it’s possible for someone to come along with relatively little investment and a much smaller staff that operates more collaboratively to compete with the big, expensive traditional newsroom at low cost.”

    You mean, like The Batavian?

    • http://www.buzzmachine.com Jeff Jarvis

      heh. Have you filled out our NewBizNews questionnaire?

      • http://www.howardowens.com Howard Owens

        I have.

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  • http://www.thepomoblog.com Terry Heaton

    Noteworthy are various attempts to move another newspaper monopoly to the Web – Legal Ads. Obits are also being disrupted (because they’re SO friggin expensive).

  • http://stanspire.blogspot.com Stan Spire

    Take a look at your first sentence: “…since it’s 2000 high…”

    “It’s” is a contraction of “it is” or “it has.” “Its” is the spelling for the possessive pronoun.

    See http://englishplus.com/grammar/00000227.htm .

    Obviously you are one of those commie hippie college professors responsible for lowering both English usage and moral standards.

    Stan

    stanspire.blogspot.com

  • http://stanspire.blogspot.com Stan Spire

    Correction: Make that your first paragraph, third sentence.

    My journalism education trained me “good.”

    Stan

  • http://andyscheurer.oecii.com Andy Scheurer

    Are you suggesting that small, collaborative (specialized?) groups are the future of news organizations? Moving away from the large publisher-centric approach seems to be a good first step, but still… how do they monetize? Targeted advertising?

  • Andy Freeman

    > Moving away from the large publisher-centric approach seems to be a good first step, but still… how do they monetize? Targeted advertising?

    It is unlikely that will be a one-size fits all for news monetization.

    In some cases, good old subscriptions will work. (I suspect that many of these will follow a freemium model.) In others, targetted advertising will dominate. (And, there’s no law saying that you can’t do both.) In still others, untargetted advertising will dominate, with a smattering of product placement. (I’m thinking of “Paris Hilton” news.)

    Some news publications will be a benefit of some organization, so they’ll be supported however said organization supports itself.

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  • James H

    Jeff:

    Even if you can see every property in the area with asking prices on Google, I would argue a Realtor is still useful. Presumably, the Realtor is a skilled negotiator who can obtain a better price for you on a home. Also, the Realtor presumably brings to bear a great deal of experience in house buying and selling. I’m thinking partly in the process — recording deeds, title searching, etc., etc. — but also in the sorts of things one should look for in a home such as structural defects and so forth.

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