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The Real Reason Newspapers Are Losing Money, And Why Bailing Out Failing Newspapers Would Create Moral Hazard in the Media
Conventional wisdom is that the Internet is responsible for destroying the profits of traditional print media like newspapers.
But Michael Moore and Sean Paul Kelley are blaming the demise of newspapers on simple greed.
Michael Moore said in September:
It’s not the Internet that has killed newspapers ...
Instead, he said, it’s corporate greed. “These newspapers have slit their own throats,” he said. “Good riddance.”
Moore
said that newspapers, bought up by corporations in the last generation,
have pursued profits at the expense of news gathering. By basing their
businesses on advertising over circulation, newspaper owners have
neglected their true economic base and core constituency, he said...
And
Moore cited newspapers like those in Baltimore or Detroit, his home
town, with firing reporters that cover subjects that affect the
community.
Ultimately, he said, this was self-defeating. It
would be like GM deciding to discourage people from learning how to
drive, he said.
“It’s their own greed, their own stupidity,” he said...
Similarly, Sean Paul Kelley writes:
I
don't buy all the hype that the internet is even the primary culprit of
the demise of journalism. The primary culprit is the same as it is all
over the country, in every industry and in government: equity
extraction.
Let me explain, in short: when executives expect
unrealistic profits of 20% and higher per annum on businesses something
has got to give. It's an unnatural and unsustainable growth rate. For
the first ten or so years of a small to medium size company's life?
Sure. But when you are 3M, or GE? Unrealistic and ultimately
impossible.
So, when such rates cannot be achieved by organic
growth in the business, executives start shaving off perceived fat and
before they know it they're cutting off the muscle and then shaving off
bone chips. And when they've gotten to the bone chips they borrow other
people's money to buy new companies, load up those companies with debt
and extract equity form them and then because it looks like the parent
is still growing award themselves huge bonuses. It's a shell game.
That
is what has happened to the news industry in America. The excessive
obsession with unnaturally high profits has led to a vicious circle of
cutting budgets, providing less services, which is then followed by
even more drastic cuts. The local San Antonio paper is a great example
of this. Twenty years ago there were two large dailies in my hometown.
Both competed with each other for real scoops. Both had book reviews by
local writers, providing local jobs. Both covered the local arts and
sports scene. Both covered local politics in depth and local and state
news in depth. Both had vigorous investigative teams. Both had bureaus
in Mexico and both had offices and reporters on the ground in DC.
And
then corner offices of Gannet and Harte-Hanks were populated with
Kinsey-esque managers and the rout was on ... So, today, San Antonio
has one daily that is as flimsy and tiny as the local alternative ...
And 80% of this happened before ... the internet. All in the name of
higher industry profits--not some overwhelming fear of the world wide
inter-tubes. So, who's profiting? Certainly not the intellectual vigor
of the locals? And certainly not the writers who are all now
'journalism entreprenuers.' The only people who profited are the
executives who obsessed over profits, to lard up their own bonus pool
...
You can provide a public service with small profits for a
long, long time, but if you demand large ones you will destroy it. Just
ask the big banks.
Moral Hazard for Newspapers
There has been talk of bailing out newspapers for months.
But
the newspapers have largely driven themselves into the ground with
their never-ending drive for higher profits, which led to a reduction
in news bureaus, investigation and real reporting, and an increase in reliance on government and corporate press releases.
The
newspapers made a speculative gamble that reducing real reporting and
replacing it with puff pieces would increase its profits, just as the
giant banks made speculative gambles on subprime mortgages,
derivatives, and other junk, and largely abandoned the boring,
traditional business of depository banking.
Bailing out these
newspapers would be a form of moral hazard equivalent to bailing out
the giant banks. Instead, we should let the bad gamblers lose, and make
room for companies that will actually serve a public need.
The banking industry has become more and more consolidated, which has decreased financial stability.
Likewise, Dan Rather points out that “roughly 80 percent” of the media is controlled by no more than six, and possibly as few as four, corporations. As I wrote in July:
This fact has been documented for years, as shown by the following must-see charts prepared by:
***
This image gives a sense of the decline in diversity in media ownership over the last couple of decades:
If
traditional newspaper companies are bailed out, they will be encouraged
to continue their business-as-usual, and new, fresh media voices will
face a handicap to competition (just as the small banks are now unable
to compete fairly against the too big to fails).
We need more real
reporting in this country, not less. Bailing out the traditional media
will create more consolidation, just as it has in the banking industry.
The last thing we need is moral hazard in media.
What Do Readers Want?
As I wrote in September:
President Obama said yesterday:
I
am concerned that if the direction of the news is all blogosphere, all
opinions, with no serious fact-checking, no serious attempts to put
stories in context, that what you will end up getting is people
shouting at each other across the void but not a lot of mutual
understanding.But as Dan Rather pointed out in July,
the
quality of journalism in the mainstream media has eroded considerably,
and news has been corporatized, politicized, and trivialized...
No wonder trust in the news media is crumbling.
Indeed, people want change - that's why we voted for Obama - but as Newseek's Evan Thomas admitted:
By
definition, establishments believe in propping up the existing order.
Members of the ruling class have a vested interest in keeping things
pretty much the way they are. Safeguarding the status quo, protecting
traditional institutions, can be healthy and useful, stabilizing and
reassuring...."If you are of the establishment persuasion (and I am). . . ."
So
traditional newspapers are also losing readers to the extent they are
writing puff pieces instead of writing the kinds of things people want
to read: hard-hitting stories about what is going on in the country and
the world.
Finally, as I wrote in March, the whole Internet-versus-traditional-media discussion misses the deeper truth:
The whole debate about blogs versus mainstream media is nonsense.
In fact, many of the world's top PhD economics professors and financial advisors have their own blogs...
The same is true in every other field: politics, science, history, international relations, etc.
So
what is "news"? What the largest newspapers choose to cover? Or what
various leading experts are saying - and oftentimes heatedly debating
one against the other?
The popularity of some reliable internet news sources are
growing by leaps and bounds. For example, web news sources which run
hard-hitting investigative news stories on the economy - and do not
simply defer to Bernanke, Geithner, Summers and other people "of the
establishment persuasion" - are gaining more and more readers.
It
is not because it is some new, flashy media. It's because people want
to know what is going on ... and some of the best reporting can now be
found on the web.
Subtle, Unintentional Propaganda?
If there are bailouts of the newspaper industry, will the government
take ownership of the media corporations, as it has in AIG and some of
the giant banks?
Will that - in turn - lead to a situation in
which the government representatives subtly and innocently censors
anti-government stories? After all, the object of criticism might be
the employer or friend of the government representatives on the
newspaper board.
Indeed, the most cynical view is that this could eventually open the door to Pravda-style government control of media.
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My local newspaper invariably tells readers to vote for the local candidates who make sweetheart deals with land developers. Thus follows development after development, bringing stifling population density, the inevitable results of which have been realized in increased crime, poverty, traffic gridlock, taxation, utility rates, and governmental assaults on personal freedom. The newspaper then reports about how bad it is, with all that crime, poverty, traffic gridlock, and high taxation, utility rates, and governmental assaults on personal freedom. Unquestionably the biggest hypocrites in town. Rest in hell.
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In my view An enterprising person is one who comes across a pile of scrap metal and sees the making of a wonderful sculpture. An enterprising person is one who drives through an old decrepit part of town and sees a new housing development. An enterprising person is one who sees opportunity in all areas of life. To be enterprising is to keep your eyes open and your mind active. It's to be skilled enough, confident enough, creative enough and disciplined enough to seize opportunities that present themselves... regardless of the economy.
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An enterprising person is one who walks through Wal-Mart and sees a stable of porn starlets.
All of the above is true, but gang, the simplest answer is usually the best.
Newspapers are once a day, printed on paper, and delivered by truck. Think about it. We have been in an electronic news and information world now for about 70 years. Newspapers have more on less been in decline that whole time.
The internet, liberal bias, television, radio all played a part in their demise, but in the end, they are just yesterday's technology.
It's got very little to do with quality, or "exorbitant" profit margins. This whole discussion is like lamenting the demise of the horse-drawn carriage because of the new "horseless carriage." Gee, I guess the old horse-and-buggy manufacturers must have been ruthless, profiteering gougers!
Every industry runs its course. Newspapers offer nothing that the internet cannot provide at a vastly higher level, and for FREE. You still have to pay for premium content at certain sites, but craigslist is FREE, ebay is FREE, and 90% of your news outlets are FREE.
Well-run local papers can still thrive -- we have a good one in my town that does well, keeps the community close, and doesn't try to be a be-all end-all news source.
Wunderbar discussion.
I still get a paper now and again (SF Chronical or San Jose Merc mostly) so that I get a handle on what our version of Newspeak is telling the masses.
You never know when you may have to converse with someone on a topic they think might be important: "Hey, what's up with these bailouts?." "Errrm...well, you wanna hear what you want to hear or would you like me to tell you what's really going on..."
"Dude, you were so right about Desean Jackson having a breakout year. Thanks for the tip. I'm about to win my fantasy league, I owe you a dinner."
:/
"Well thanks. You might want to pick up Chumbawamba from zerohedge for next year..."
OF COURSE the federal government is going to bail out the newspapers, and by extension Big Media. Why? Because Big Media is part of the Iron Polygon. It IS the government (in part) and the government won't allow a part of itself to fail in such a flagrant way if it can possibly help it.
That should be obvious by now.
One fine day, our wonderful albiet bankrupt Nation (thanks, Bush/Cheney!) might actually realize this simple fact. To bail a failing enterprise out, you must first be solvent yourself.
All the catastrophes immediately ahead of us point to another Great Depression. Who in their right minds could care less about the Newspaper Industry?
Yes, the Internet is killing the newspapers, but for reasons not discussed. Namely, most newspapers have little unique to offer the reader. They depend on AP, UPI, Reuters, and other newspapers to feed them material. A few exceptions exist, for example, the Wall Street Journal, which provides original news and commentary not found anywhere else. As a result, I buy the WSJ. Alternatively, one can obtain it on the Web, but only by paying for it. Ironically, once the WSJ has run an interesting article, I see a number of derivative articles in the NY Times and Washington Post, which are subtly plagiarized by slightly altering the context or perspective.
If the newspapers want to survive, they'll have to stop reading the news wire services, get out of the office, and find out what's really going on in their communities.
>If the newspapers want to survive, they'll
>have to stop reading the news wire services,
>get out of the office, and find out what's
> really going on in their communities.
I think those are often called bloggers and local special interest websites.
Thus newspapers are too late, others are already doing this.
Continuing the idea, newspapers are one size fits all across their circulation. Newpapers are allways shooting a shot gun spread. The internet allows the content consumer to decide which "reporters" they have an interest in at any given moment across the planet. The newspaper allways faces constraints that can't even compete with that model of the internet.
As I think some other posts are getting at, newspapers are evolutionarily obsolete.
Another key point here that is very often missed, there is a fairly hard age relationship to paper content consumers versus internet content consumers. Young people today have no interest in papers, they are too addicted to the internet's searchability and breadth. A few years ago the reverse was true for older folks, they were "stuck" on paper and not transistioning to the internet. However we now see older folks making the switch, and thus a lessoning part of newspaper circulation. Still older folks likely enjoy "the paper" but as the population ages (again young folks don't read papers) it's game over for newspapers.
If you closely watched the internet unfold (I've been very active participant) you'd have seen time and again how the age of a CEO would dictate if they "got" the internet or not. Like recently Rupert Murdoch saying he'll deny Google his content, and the young folks at Google said "Ok." The young guys at Google get it, Rupert still does not and likely never will. Like a child learning to play an instrument, it becomes part of them, do that later in life and that's not likely to ever happen.
The only question I see left is how fast older folks will abandon newspapers, will they do so fast enough that they see an end of newspapers? Or will it be their deaths that finally result in the end of newspapers? Given the growth and expanding uses of the internet, I think older folks are going to see the end of newspapers. I think older folks like seeing real time Skype video calling of their grand children regardless where on the planet they are each located. ;) It's very simple things that are "motivating" all to move to the internet, and once you jump in what reason is there to go backwards?
Short of a newspaper not needing a battery, I can't think of any benefits they offer. Ok, they are are better at pet cage liner than your laptop.
Things can't be that bad, NYT stock is at a 52 high - good times ahead! [/sarcasm]
More stupid bullshit. "Save the papers to insure an editorial voice for all and maintain competition"
Are we really expected to have much more of this crap shoveled on top of our heads???????????
The internet killed newspapers vis a vis Craigs List
There is a little bit of “reductio ad absurdum” in this but IMO the topic needs it. And, for the record, there is nothing, (well almost nothing) that I enjoy more than relaxing either morning or evening with a well written newspaper and a hot cup or coffee.
Darwinism was about evolution of species to fill environmental niches. Species evolved as environments or pressure from competing species required. We no longer have the magnificent dinosaurs but we do have chickens.
Michael Moore talks about corporate "Greed" because he is trying to communicate his perspective. Calling it "Greed" suits his agenda. His model for greed is a child’s greed. Children with many toys may want new toys simply because it is a fad. Our instinct is to be acquisitive, I assume, because it not only makes us more comfortable but also helps survival. Is Michael “greedy” because he doesn’t disperse the royalties he is paid to all the people who contributed to the making of it?
In reality, the corporation evolved to maximize productivity of its population by specialization of human effort. Profits are a tangible measure of that productivity because you can’t pay the workers, suppliers or service people without them. Those workers that make decisions which maintain or increase overall profits or whose skills cannot be readily replaced are paid more. Some are driven by a desire for new toys but most are able to relate to their fellow members and see themselves as a part of cooperative institution that provides livelihood for many. After you get to a certain age, most people don’t care about new toys.
My reading of history is that more effective busisnessmen are driven by fear, pure greed doesn't work out well. The retailing titan Sam Walton, was not driven by “greed” but by fear of loss. His trauma from lost access to livelihood because P. K. Holmes would not renew his lease was a stimulus to ongoing effort. Giant Walmart’s employment practices have been criticized but Walton, who lived a modest existence to the end of his days keeping his prices to the public low, could not be accused of greed.
http://hbswk.hbs.edu/item/2375.html
I think that there is a difference between passive greed and active greed. Most people do not deliberately seek out to become misers, so preoccupied on the the acquisition of wealth by itself that they lose sight of the larger values in their lives. Passive greed, on the other hand, is endemic and pervasive in this country, with it's manifestation being the drive to seek ever higher yields for your investment dollars. Some do that because they see it as a game, some do it because their own income ultimately derives from getting the best return on the investment of others, while others do it because they fear that at some point in the future they will be unable to play the game after their financial efforts collapse, and as such they seek to secure a larger and large "pad" to put off that day of reckoning. In other words, there is often very little distinction between passive greed and fear.
However, passive greed takes other forms as well. Conglomerates typically form from a mix of passive greed and fear. A competitor has too much market share and is growing at your expense. You purchase that competitor to take them out of the market and regain that market share, though often at the cost of decreasing the efficiency of delivery of both your services and theirs. You see newspapers as having a high profitability within their demographic, so you purchase them up for their profit flow, siphoning away capital that would have otherwise gone into retaining the quality of the product and hence the reason that the high profit margin existed in the first place. You take on increasingly risky ventures, but then you find counterparties to take the risk for you for a fixed (known, and hence minimal risk) cost. All of these are passive greed, wrapped in the language of high finance and arcane TLAs, but greed nonetheless - and it's just as corrosive in the long run.
GW,
I've written about the media implosion a number of times professionally (when I was in fact still a journalist) and spoken at media conferences concerning precisely these issues, so it's nice to know that I'm not the only one who feels this way when I read your works.
There are other factors for the demise, not least being that in shifting to the heavily advertising dominated model (as compared to the subscription base) newspapers overall chose the route of immediate high profits over long term stable growth. When the Internet did enter into the scene, advertising became replaced with search and word of mouth, the ad agencies essentially died, and the newspapers died with them.
The consolidation that took place in the news industry - print and electronic media - occurred largely because the promise of "cashing in" was too great to most newspaper boards, most of whom made out quite nicely in the deal. Every paper thus added to a Gannett or Knight Ridder or McClatchy then ended up in a situation where the paper's advertising revenue projections became the collateral for their own purchase, and rather than the money from advertising going back into developing better journalistic teams, most of it ended up as dividends from the conglomerate shareholders (which were usually dominated by a 99+% ownership of outstanding stock).
Not only were salaries cut and news organizations dismantled in the process, but the managers being put in were often being driven by insuring that the boat was rocked as little as possible - which meant that editorial was often compromised if it threatened ad revenue. Not surprisingly, the quality of the reportage declined, precipitously. Thus, when the Internet emerged as a conduit for news production by "non-journalists" (keeping in mind that journalism is perhaps one of the most overrated - and by extension intensely competitive - professions out there) the newspapers were especially vulnerable even to fairly poor reportage from the Internet. Of course, this then provided a rapid bit of Darwinian evolution on the web as well, to the extent that the Internet is now providing better news content than the newspapers overall.
So, yes, I agree strongly with your contentions. The newspaper industry slit it's own throat, all the way screaming about the menace of the Internet. We're facing the consequence of that now, as newspapers continue dying in droves, their lackluster content making them less and less worthwhile.
The irony of all of this is that it may very well be the birth time for a whole new generation of newspapers that see their missions differently, that emerge from the web but that recognize the value of print, and that ultimately end up rebuilding the industry from the ground up. You're seeing this in the rise of private newsletters (indeed, I could see ZH going that route eventually) which are ultimately the precursors of the new newspaper paradigm. I work heavily in the Internet sphere, but I do think that newspapers will come back - but they won't be the corporate-bloated USA today clones that are the dying dregs of the current generation.
I agree with GW that a media bailout is a terrible idea, beyond terrible. Let them go broke and be replaced by more nimble companies or alternatives.
OTOH, quoting Michael Moore gives predictably dumb and overly dramatic reasoning too much play. The newspapers' financial problem is pretty easy to diagnose--"Craig's List." Their cash cow has been classifieds. Craigs List gives free, localized classifieds. (The papers haven't helped themselves by making their coverage irrelevant or obnoxious to anyone who is not a liberal. But the fundamental problem is Craigs List.)
Either they find a way to replace that cash cow, cut costs, or go out of business. I won't miss them.
To our bought-and-paid-for President Barry- I will take shouting the truth on the Internet over printing/speaking a lie in the MSM. It is fear that drives these cowardly musings. Our"change we can believe in" President is now becoming just another talking head.
The internet is the coup de grace for the MSM, but the MSM drank poison as the industry was consolidated into news factories by hot money and the political/bankster elite that needed to control their message.
With the fiscal/monetary confiscation of the middle class's money and future earnings to save the Banksters, the MSM must toe the line, at the peril of their loans being called- the MSM being heavily in debt. Survival quickly dispenses morality.
I don't know if the music is going to stop, but everyday the MSM is pumping the hopium message by perverting accepted yardsticks. We now get month over month housing numbers instead of the standard year over year. Maybe soon they will try daily comparatives and only estimates. Like, we estimate Friday's housing starts are 20% higher than Thursdays, etc...
Beware Google as they sold their soul to the Chinese, are stifling debate about climate, yet they themselves are now becoming an Internet talking point.
Has anyone noticed what a cheerleading rag WSJ is becoming?
And who owns Dow Jones now???? (objection your Honor, leading the witness again!)
Agree- Can't read it anymore.
Has anyone been unfortunate enough to hear the "WSJ This Morning" radio show? Utterly CRAPTASTIC, with zero substance.
Fuck that fat slob Moore. The poor should eat the bastard.
When the local paper asks me if I want a subscription, I tell them "No, Why should I pay money to be lied to?" - They say "What lies?" - I say 'For example, that Iraq had weapons of mass destruction and that they were about to use them on us."
Several trillion dollars later, we are still in Iraq (even though we now know we were lied to), and we are at war with half a dozen other countries in that region, and the money and lives are still getting wasted. And the big media tells us that this is OK, we are doing the "right" thing.
Why should I pay money to hear this crap anymore. I get my news from the internet.
"It is not because it is some new, flashy media. It's because people want to know what is going on ... and some of the best reporting can now be found on the web."
Exactly what I tell people everyday. People will flock to information like flies on trash. And once the trash can is open, the swarming won't stop.
This is precisely why those in charge are so up in arms and frightened as it's much more difficult to control internet reporting compared to traditional MSM reporting. Any boss can walk down a flight of stairs to his subordinate's desk to kill a story. Good luck trying to stop the hundreds of Tyler Durdens and Marla Singers across the planet from reporting the truth.
I thought all of this already happened..
The media IS THE SOURCE OF OUR MORAL HAZARD.
Incredible! "...as Dan Rather pointed out..."
PLEASE!
Moral Hazard is Neither
Our leaders suggests the blogosphere fact check?
Doublespeak?
Orwell was precient. Er, Orwell is truth and truth is Orwell.
The newspaper industry started to change years ago with the publication of USA Today. For the first time, local newspapers were being cannibalized by a national paper and their response to it was to go to a look and feel more similar to USA Today. Anyone who travels understands thi. It used to be that you had to buy the local paper at the hotel if you wanted the overnight news. Then they started giving away USA Today. This sort of thing was a catalyst that caused local media to sell out. The internet was simply the final nail in the coffin.
The reason I don't read the newspaper is because it is no longer the best source of the news I want and need. The reason it isn't, indirectly, is because USA Today forced it to change it's business model.
The tyranny of the unconstitutional Marxist despotic income tax is responsible for the sorry state of the msm and newspapers of our day. Enjoy your current freedoms of internet exchange. For currently there is little financial incentive for bloggers web hosts etc. to worship at the alter of Leviathan. That will change, first with "Cyber Security" then with some sort of bullshit tax that will favor those that tow the line. There is nothing they won't corrupt or confiscate. These are the good old days, enjoy them.
Let's cut to the chase. I read several local newspapers ONLINE for YEARS. Quietly mooching off my town paper. Each week the newspaper came out onto the internet, was quietly devoured while stacks of paper print rotted in the box unsought at 75 cents.
FINALLY the local newspaper decided to put a filter onto thier content to paying subscribers which is the same or more than print.
I decided that local newspaper isn't timely, fast enough or deep in actionable content to be worth buying. It is either selling cars or hearing what the Governor thought last week of something that does not affect the town.
I still read the news. ONLINE where I can dig like ferret and find it.
And I'm sorry, Blogs or postings online sometimes IS the news. Print is just too slow, obsolete and unwieldy. I dont care for Moore but you have to see the demise of print for practical reasons, usually tied to money.
Money we dont have for stale news.
And the news is the news.
NYT says "all the news fit to print", thus admitting it's a relatively fixed quantity each day.
A quick Google search quickly reveals how many thousands of free sources there are for each of those articles. The of course Google itself provides a highlights page which sends you off agnosticly to one of the sources. Thus nobody really cares about any given source, they is allways someone else providing that news for free.
There is no longer local control of access to "the news".
The power of the press used to belong to those who owned a press, now, not so much. Newspapers are already dead, they just haven't been buried yet.
good ichan quoate, alot of it goes back to early 1980's, milken and leverage buyout stuff, there were 10,000's good companies making sweet money and they came in and demanded 20% or more growth from them, which was unrealistic in the long term.............you end up destroying morale, and then loosing your best people who were the company because it is an idiotic and insane business plan, customer service is mainly crap, they always believe there will be buyers until, well there's not, then it's the next guys problem
The Murdoch-ization of newspapers killed them. Murdoch is proof that paper always accepts ink.
Major newspapers are garbage bags of celebrity crap and irrelevant content. If they had something worth reading, people would buy them. They don't.
You have NYT corporate whores soaking up ink over here... political ass kissing whores at the Wash Post soaking up ink over there.
If Stephanopoulos and Gregory were newspapers would you buy them? Of course not. They are irrelevant talking head idiocy.
Good riddance to the entire morally corrupt bought off whores of the main stream corporate propaganda machine. Like advertising... they are a dead weight loss to society.
I will take my chances getting news from the ZH's of the world. It is no harder figuring out if blogs are printing facts than it is the "real media" like the vaunted Clown Network Business Channel.
So how come that publishers are rising? If I look at NYT then it's a highflyer for the year, but operating income is steadily decreasing.
My neighbor tried to terminate his paper subscription many times, they tell him yes, but never do it. Finally he got them to stop charging him for it.
Years later they are still delivering it to his house.
That says it all, circulation goes up as they give the paper away for free, while profits decrease.
If they let their circulation go down they'd be dead overnight. Circulation is to papers as "traffic" is to web sites, thus papers to all they can to get the circulation numbers regardless if it means anything real ... Like still delivering papers to those that do not want them.
The difference being you can really tell if someone comes to your website because of an advert you placed on their site.
Greed was the setup for failure.
The internet finally exposed this by providing alternatives.
To believe otherwise is very dangerous. Internet freedom is under significant attack. For about $8 per year you can get yourself a "store front" (read: domain name) and for free you can find a hosting company to provide free hosting that they will monitize for their own revenue. So for $8 per year total you have access to the entire world, if people what to listen to what you have to say.
That $8 is not only an alternative, but it's a hole in the damn that was not plugged in time, the damn is about to disolve. Thus the asymmetrical rules now being applied to the internet to stop it's freedom.
It internet did kill newspapers. If there were no internet the greed would have continued, and people would still be buying them due to lack of choice. Even if the purchase was pure entertainment at that point, knowing full well there was no "truth" in the pages.
There is another key ignored here as well. Internet adversting is based on "pay for performance". When you place an advert in a paper how many people really see it? What guarenteed do you have of ANY conversion to purchases?
ZERO!
But the links you all see on Google and sites across the internet cost NOTHING! The avertisors bid for those links, but they pay NOTHING for them to be displayed. The moment someone actually clicks on the link that is when they are charged, they are charged for someone actually responding to the advert. No classical media can do that, they sell hopes and dreams and guarentee nothing. Google guarentees when they charge you, someone visited your site.
So that address the folks who really pay the newspapers bill, advertisors. When face with the world wide audiance the internet offers, and only paying to people that come to your website, why would anybody pay for a newpapers hope and dreams that an advert placement means anything to you?
The internet killed newspapers.
Yes, newspaper greed just made it much easier, that's all. Even without the greed, the pay for performance advertising model itself was enough to kill classical advertising.
For further research, learn about Google's Adwords and Adsense programs. See also
http://www.dnjournal.com/domainsales.htm
There is a reason why someone would pay $175,000 for the domain name: BARNS.COM. Forever more, anybody looking for barns will likely wind up going to BARNS.COM and thus that domain name registrant will have the opertunity to sell to each of those people around the entire planet. After that initial $175,000 investment, it will cost them ~$8 per year to renew that domain each year. And the registrant can do that as a broker of others products and services, while they are in their home have no commute to or from work.
The intrinsic benefits of the internet over newspapers is evident. The internet is a fundamental game changer.
I work for the Usatoday in the midwest. We are a contract site therefore the local paper pays my wage.
Last year we had a wage freeze and the overtime rules changed so that we have less of it.
This year (few weeks ago) they announced that we will not have our 401k's matched and a 3-9% wage cut for everyone as of 1/1/10.
I know it will not be much longer until I am out of a job.
They asked us for ideas. I told our Manager "people do not like to pay to be lied to" and he told me "I don't want to have this conversation with you"
Oh well huh?
So I hear that unemployment lasts up to 99 weeks now?
I am looking fwd to u-e and cashing in my 401k, selling my house, loading up the credit cards(gold and silver) and then... *poof*
Any tips?
Maybe I'll learn how to start making soap ;)
I still remember my feeling of--betrayal, really, when I stopped writing novels and started doing journalism, and began running into other journalists covering similar topics, and discovered how amazingly lazy they were. And how they almost always subscribed to the most obvious, simplistic interpretation of an event instead of digging into it.
Of course good journalists exist, but they are rare. Something about the profession has attracted mediocrity during the past 20 to 30 years, in much the same way that government has attracted mediocrity. In the UK, you still find "adversarial journalism" which displays obvious skepticism toward various aspects of the status-quo. UK newspapers seem to be in much better health than their US counterparts (they certainly have more pages), and I don't think this is a coincidence.
While acknowledging other problems affecting print media at this time, I believe the laziness of the people who write the stories has been a major factor. Most of them are utterly lost if they don't have a press release to copy and some conveniently simplistic sources to provide predictable quotes.
Even if Zerohedge provides better journalism than the MSM how does it pay the bills for a longer period of time than its first year of operations or does it have corporate sponsors not disclosed...
"Moral Hazard" to you and me George, is quite different than "Moral Hazard" to those who make these type of decisions in the government. "Moral Hazard" to them is not protecting and/or underwriting a business entity who's loss through bankruptcy would undermind the powers of the Plutocracy who owns and runs this country which includes owning and running those placed and elected to oversee their running of the government. Whether or not the go to the well again with a "bailout" like they did for their banks and the auto industry remains to be seen but, they will do something to make sure their entities are still controlling the main stream media most citizens look at.
Same thing about impossible profit expectations could be said for every listed corporation. At even 15% per year it doesn't take too long before you would end up bigger than the entire global economy.
Agreed that the newspapers did the short-sighted thing many public companies do, do what makes short-term profits but hurts long-term health of company. You do not lose half your readership and adverstising the day you lay-off writers, but eventually quality is so low, it no longer entices. Any company that has cheapened its product quality makes a short term gain but eventually consumer catches on to lower quality and brand is trashed. See Chevy, GM...now it almost does not matter how good or bad their cars are. So agreed, bailing out newspaper companies is bad idea.
However, having said that, look at any newspaper 25 yrs ago and see where their revenues came from. Classifieds, personals, goods to sell, job positions, along with traditional ads all provided huge revenues. Monster.com, Ebay, Craigslist, Match.com took almost all of that away, besides the loss of eyeballs (and associated lucrative local ads) to all kinds of different information sources like cable TV, internet, mobile phone updates etc...That was a huge loss to newspapers...no way you can say that was less important than vicious circle of lowered quality/lower readership/need to cut expenses.
The thing is, I think in Apple and others may help publishers of content to find better way to monetize the content creation down the road...once we get a good, high quality way to read/view high-quality content (great visuals and great words), and an super easy way to pay, we will pay something for content, see I Tunes. No need to bailout newspapers.
And while we will likely have lost some "subsidy" to public investigation of certain local issues that newspaper revenue provided, we are gaining in other ways. Would their be a Zero Hedge type alternative to WSJ without internet?
Creative destruction can be messy, but I think journalism and public investigation would do better in the future than it was doing 20 years ago, once all this shakes out.
I just want to know when tech school and undergrad degrees will see same creative destruction so kids do not have to spend the price of a nice house to get something that can be delivered in great quality largely over the internet. Sure, high tuition subsidizes some great research and pretty campus buildings, and glistening sports stadiums but is it right for our kids to be impoverished for this?
Bailing out the newspapers would just forestall the inevitable. Yes it would be a waste of resources, but it will not stop the real quality information flow that is occuring on blogs like this one.
The real concern has to be efforts to curb internet media. It would not surprise me if we see some kind of efforts to control access in the near future. MSM no longer controls the message.
The reason the newspaper industry is failing is because most people do not believe what they write. Therefore, why would anyone PAY to read what they beileve are lies?
People will pay for good HONEST content.
The newspaper industry and their FLAGRANT bias towards the majority of the country doomed them.
Give me some real objective data please, not the socialistic opinions of Michael Moore. Like all communists he has no idea about how to run a company except running it into bankruptcy. The reason newspapers and TV are losing readers and viewers has been written about and documented by numerous sources for over 30 years. They slant their product toward a liberal bias in a country that is about 70% conservative. Most people in this country live their individual lives as conservatives. The majority believe in God, newspapers and TV are constantly siding with the minority on that issue. That is why more and more people tune out TV and stop watching the MSM on TV year over year. As a case in point look at how much money the NYT has lost in just the last 2 years just to maintain their acknowledged liberal bias in news reporting ( Global Warming Hoax anyone). If this were your company would you give up over 2 billion dollars just to be with the in crowd of liberals? Pretty insane to me.
He's right about all this, for once. Yeah, he hyperventilates a lot but this is an area I know pretty well. I used to work for a decade for a company that was ultimately a subsidiary of United Business Media and Big Media's sense of 'entitlement' to profits that would make Exxon blush are pretty well known to anybody who works high enough up the chain.
In the name of maintaining endless double-digit profit growht they gutted their 'investigative' reporting and replaced it with celebrity trash, newswire articles and barely disguised press releases and then wonder why readership has been on steady decline. Couple that with illiterate copy-editors and unreadable 'columns' written by the publishers' relativesw and it's a wonder they didn't die off sooner.
And that's not even going into the whole financial side of by leveraged buyouts of competitors that generated lots of big fees, press coverage and make the big shots feel even bigger but are ruinous to the actual companies involved.
+1000