Tapsearch Com EditorHow the MSM could have saved itself, part II
May 8th 2007 02:17
Awhile back I commented on one idea for saving the media -- rather than trying to compete with the Internet for analyzing stories, companies should have focused on what they do that no one else can do, namely, collect news.
The Wall Street Journal today added, And charge for it.
From an op-ed by an Arkansas newspaper's publisher:
It's always seemed weird to me how the MSM gives away the one advantage it has over the blogosphere. We bloggers can pick apart articles and add our own knowledge, but we rarely even make phone calls on our posts. We almost never, unless we're one of the few bloggers who can make a living off blogging, cover events just for our Web sites. If the MSM stopped giving away its hard-earned reportage, things would look better for it.
The only objection I have to this is based somewhat on the Efficient Market Hypothesis*. There are a whole bunch of newspaper companies trying out a variety of strategies, and when all the companies converge on one strategy, it's reasonable to assume that strategy is a good one. Newspapers as a whole, as the op-ed points out, have been tending to "modernize" by integrating into the Internet. If they all came to this conclusion, it's hard to believe they're wrong.
By Robert VerBruggen
*(That theory holds that a stock's price is essentially an accumulation of information; if a lot of people think it's undervalued, they'll bid it up. Therefore, a stock's price accurately represents its worth, so it's very difficult to make more than the average amount of money from buying stocks. In other words, even the savviest investor can't consistently outperform the market, except by luck. See Wikipedia for a better and longer explanation.)
The Wall Street Journal today added, And charge for it.
From an op-ed by an Arkansas newspaper's publisher:
Why would they buy a newspaper when they can get the same information online for free?...With local radio and television stations also creating Web sites and posting their news for free, newspapers soon realized that much of the news on the broadcast Web sites had been created by the local newspaper. So, whereas before the newspapers were selling print ads while radio and TV were selling air time, now they were all selling the same medium: their Web sites. Since newspapers share their content with the Associated Press so other members can use it, radio and TV members are using much of that content to compete against the newspapers that created it.
...
Gordon Borrell, CEO of Borrell Associates, estimated that newspaper Web sites generated 78% of their revenues from classifieds in 2006...The Inland Cost and Revenue Study shows that newspapers will generate between $500 and $900 in revenue per subscriber per year. But a newspaper's Web site typically generates $5 to $10 per unique visitor per year.
...
Recently I had the opportunity to compare our Web site policy with the free news policies of other papers. For the six months ending March 31, 2007, the newspaper industry's circulation was down 2.1% daily and 3.1% Sunday. By contrast, the Arkansas Democrat-Gazette's circulation was up 1.24% daily and up less than 1% Sunday.
I was able to make another interesting comparison, too, with the Columbus, Ohio, Dispatch. ...Columbus dropped its subscription model on Jan. 1, 2006, and began offering most of its news for free. Its Web traffic and revenues certainly increased. But what happened to its paid circulation?
The six months ending Sept. 30, 2006 was a good comparison, since it compared six months in 2006 when the Columbus Dispatch had free news on its Web site compared with six months in 2005 when it did not offer free news. The Columbus Dispatch's daily circulation was down 5.8% while Sunday was down 1.1% for the six-month period. This compared with our loss of less than 0.4% daily and 1% Sunday.
...
Gordon Borrell, CEO of Borrell Associates, estimated that newspaper Web sites generated 78% of their revenues from classifieds in 2006...The Inland Cost and Revenue Study shows that newspapers will generate between $500 and $900 in revenue per subscriber per year. But a newspaper's Web site typically generates $5 to $10 per unique visitor per year.
...
Recently I had the opportunity to compare our Web site policy with the free news policies of other papers. For the six months ending March 31, 2007, the newspaper industry's circulation was down 2.1% daily and 3.1% Sunday. By contrast, the Arkansas Democrat-Gazette's circulation was up 1.24% daily and up less than 1% Sunday.
I was able to make another interesting comparison, too, with the Columbus, Ohio, Dispatch. ...Columbus dropped its subscription model on Jan. 1, 2006, and began offering most of its news for free. Its Web traffic and revenues certainly increased. But what happened to its paid circulation?
The six months ending Sept. 30, 2006 was a good comparison, since it compared six months in 2006 when the Columbus Dispatch had free news on its Web site compared with six months in 2005 when it did not offer free news. The Columbus Dispatch's daily circulation was down 5.8% while Sunday was down 1.1% for the six-month period. This compared with our loss of less than 0.4% daily and 1% Sunday.
It's always seemed weird to me how the MSM gives away the one advantage it has over the blogosphere. We bloggers can pick apart articles and add our own knowledge, but we rarely even make phone calls on our posts. We almost never, unless we're one of the few bloggers who can make a living off blogging, cover events just for our Web sites. If the MSM stopped giving away its hard-earned reportage, things would look better for it.
The only objection I have to this is based somewhat on the Efficient Market Hypothesis*. There are a whole bunch of newspaper companies trying out a variety of strategies, and when all the companies converge on one strategy, it's reasonable to assume that strategy is a good one. Newspapers as a whole, as the op-ed points out, have been tending to "modernize" by integrating into the Internet. If they all came to this conclusion, it's hard to believe they're wrong.
By Robert VerBruggen
*(That theory holds that a stock's price is essentially an accumulation of information; if a lot of people think it's undervalued, they'll bid it up. Therefore, a stock's price accurately represents its worth, so it's very difficult to make more than the average amount of money from buying stocks. In other words, even the savviest investor can't consistently outperform the market, except by luck. See Wikipedia for a better and longer explanation.)
| 42 |
| Vote |
Add To: 
