Thursday, February 24, 2005

Stopping the presses

Forbes analyses the economics behind the decline in newspapers:

"Though many publishers can boast of increasing their shareholders' earnings during the past 40 years through acquisitions and cost-cutting, only a few have managed to buck a trend of declining readership. The combined weekday circulation of all U.S. dailies has dropped from 62.8 million in 1985 to 55.2 million in 2002. That gives it the lowest penetration of any medium.

Worse for newspaper publishers, that trend is accelerating as the Internet has become embedded in the daily lives of so many potential readers both young and old. The top 20 news sites drew an average of 5 million individuals each month in early 2002. That figure has risen to more than 8.5 million, with the top sites drawing more than 20 million unique visitors a month. [...]

The Internet has changed the economics of the publishing industry in a way commercial television never did. The price of news and information has irrevocably been pushed way down the supply/demand curve. The Web has also destroyed the functional monopoly of the local daily newspaper with the very high barriers to technical entry. Anyone can be a publisher, and, it seems, these days, most anyone is. [...]

People may decreasingly read news from branded and trusted newspapers, but, surveys show, they do want to read it from them online.

There lies the trap for serious journalism. Going online has not yet worked convincingly for many newspapers. Despite spending billions to create online editions, these are read by fewer people, less frequently and less fully than print editions are."

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