Slashdot Mirror
The Fate of Newspapers: Farm It, Milk It, Or Feed It
Hugh Pickens writes "According to Alan D. Mutter, after a 50% drop in newspaper advertising since 2005, the old ways of running a newspaper can no longer succeed, so most publishers are faced with choosing the best possible strategy going-forward for their mature but declining businesses: farm it, feed it, or milk it. Warren Buffett is farming it, and recently bucked the widespread pessimism about the future of newspapers by buying 63 titles from Media General. He is concentrating on small and medium papers in defensible markets, while steering clear of metro markets, where costs are high and competition is fierce. 'I do not have any secret sauce,' says Buffett. 'There are still 1,400 daily papers in the United States. The nice thing about it is that somebody can think about the best answer and we can copy him. Two or three years from now, you'll see a much better-defined pattern of operations online and in print by papers.' Advance Publications is milking it by cutting staff and reducing print publication to three days a week at the New Orleans Times-Picayune, thus making the Crescent City the largest American metropolis to be deprived of a daily dose of wood fiber in its news diet. Once dismantled, the local reporting infrastructure in communities like New Orleans will almost certainly never be rebuilt. 'By cutting staff to a bare minimum and printing only on the days it is profitable to do so, publishers can milk considerable sums from their franchises until the day these once-indomitable cash cows go dry.' Rupert Murdoch is feeding it as he spins his newspapers out of News Corp. and into a separate company empowered to innovate the traditional publishing businesses into the future. In various interviews after announcing the planned spinoff, Murdoch promised to launch the new company with no debt and ample cash to aggressively pursue digital publishing opportunities across a variety of platforms. 'If the spinoff materializes in anywhere near the way Murdoch is spinning it, however, it could turn out to be a model for iterating the way forward for newspapers.'"
That doesn't make any sense. Digital distribution is cheaper, which means you can have more competitors than you could with print distribution.
What's killing news is that digital means there are essentially no more scoops. When a story comes out, it is on every cable news channel well within the hour, and posted on every digital newspaper within minutes, and news aggregators like HuffPo within seconds. Before, a true scoop meant your had the only paper publishing a story that day. Not only did that garner eyeballs, but it brought prestige too. Now it mostly means increased news consumption overall with a lot of that consumption going to your competitors with no compensation for your own paper's work.
Which is why news agencies have been cutting their staff for years. It's cheaper for everyone to ride the coattails of someone else. It's even cheaper to have interns watching twitter for trending stories. The bottom line is news is both a product but also a public good, and like many public goods capitalism may not be the optimal structure for maximizing it's non-monetary benefit to society.