The rapid adoption of tablet computers like Apple'si Pad has not reversed the slide in paying customers for news, as many media company executives had hoped the devices would.
Only 14 percent of tablet news users are paying directly for content on the device, according to an extensive survey from the Pew Research Center's Project for excellence in Journalism
.“In some ways news content on portable devices will go the same way as digital music did a decade or so ago with proliferation of high speed internet and personal computers,” said Dan Nathan, trader and editor of RiskReversal.com. “For a long while people thought they were entitled to it. It wasn't until it was cheaper and easily accessible through iTunes that people actually bought it
If media companies need to make the content cheaper still, that means crushing layoffs and cost-cutting measures in the news business may not be over yet.
Newspapers didn't help matters by falling in with the "online is free" culture and putting up everything we had in the print edition on the Internet as well. Hey, you can read all this stuff online for free, then we want you to pay to read exactly the same thing in print a few hours from now. Right. Surprisingly, not many people think that's a great deal, and I'm not sure there's a way out of the hole we dug. Dumb, dumb, dumb.
My own prediction, for what it's worth: There will be a handful of really giant aggregators of news, like Yahoo and Google, and maybea few of the big outfits like the Wall Street Journal and USA Today will be a part of the pack. At the other end of the scpectrum, there will be thousands and thousands of one- and two-person operations who make a little bit of money contributing a small slice of the news. What will be lost will be everything in between, which includes most newspapers with their middleman function.
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In 1965, newspapers got 25% of their revenue from circulation. It was enough to pay for the cost of manufacturing copies and distributing them.
At that point, the news was free. All readers were paying for was something for training the dog.
The other costs, and the profits, were all derived from advertising. By 1985, though, it had dropped to 15% from circulation. And most of the biggest advertisers, the ones that keep the doors of the newsroom open, were no longer running ROP advertising, they were using the newspapers to deliver their inserts.
At that point, the news was no longer free. Readers were being paid to take it.
And it wasn't newspapers that invented the idea that news should be free, paid for with advertising. It was radio, back in the 1920s.
An industry that gets 15% of its revenue from readers and 85% from advertisers isn't in the news business. They are in the advertising business. And it's a failure to recognize that which is dooming the newspaper industry.
The Helene Follinger of today would be embracing the internet. She would turn the newspaper's website into an internet television station. Every reporter would be issued a videocamera and a tripod, and when he went out to get a story, he'd file both print and video versions.
The neo-Helene would hire some television producers and a few "anchors editors" to put together a 20- or 30-minute newscast which could be streamed starting anytime, and which would be updated about once an hour or so, around the clock (although there obviously wouldn't be much of a change between midnight and 5 AM.)
She'd send two or three cameramen to record each of the high school athletic events in the area, and people would have parties in their homes on Sunday, watching the previous night's games, whether or not they had seen it live the night before.
She'd concentrate heavily on weekly neighborhood editions. A barber shop or a pizza parlor in Harlan can't reasonably afford to advertise to Aboite, but advertising in their own neighborhood weekly makes sense. And WPTA can't possibly broadcast every high school game in the area, but there's no reason why the News-Sentinel can't do that. Radio and television stations *thinly* cover the region, but an internet video news operation could narrowcast to 10 or 20 neighborhoods, and combined with 10 or 20 neighborhood weeklies, the News-Sentinel could be the effective, efficient, and affordable way for businesses, large and small, to reach consumers.
There's no reason it HAS to be the News-Sentinel doing it. It could be some entrepreneur, or it could be some daily newspaper from an adjoining county that sees all that money just *lying* there, with nobody willing to earn it. But with the established advertising sales force and the established credibility and reputation of the News-Sentinel, it'd be a lot easier for the N-S to do it.
But if you think you can charge people to read news that is available on television and radio websites, well, good luck. Of course, it'd be possible for the television stations to pull something like this as well with their websites, covering all those high school sports. If I were running one of those stations, I'd start running obituaries on my website, and branch out from there....