The Survival of Newspapers

[drplokta]

The survival of newspapers in the Internet age is back in the news, with the Murdoch titles starting their suicidal move to lock their content out of the ongoing dialogue that is the Internet. So here's my view.

There is still a role for newspapers, and they can thrive online by filling that role. What they have to do is to cut their costs dramatically -- probably by 95% or more -- by stopping doing everything that someone else, anywhere in the world, is doing better. Why would I want to read the Guardian's coverage of the US elections when there's fivethirtyeight.com? Why would I want to read the Times's technology column when there's ArsTechnica? Why are newspapers still paying journalists to lightly rehash press releases that they don't even understand (of which I have lots of personal experience from looking at the generally appalling house price journalism in the UK)? I don't need a newspaper to compile the news for me any more; I have an RSS reader.

So, my advice to newspapers, and to journalists, is to specialise. Journalists have to do a 180° turn -- it used to be that a good journalist was one who could write shallowly about anything; now a good journalist is one who can write in depth about one topic better than anyone else in the world. Identify what content you have that's better than anyone else, and keep it; ditch the rest. Your advertising revenues should then seem quite reasonable. If you can still make money by printing a generalist publication on paper, then stick with it, but don't expect the Internet to work the same way, and don't destroy your Internet presence to try to save your old business model. We will end up with a lot fewer journalists doing a much better job.

Comments

[surliminal.livejournal.com]

Yeh and that's how Google made c $24bn last year - pulling a lot of wool over a lot of eyes there, huh?

I somehow feel some reasonable percent of their advertisers will be auditing if Google ads are worth their money. Google may have a million tiny advertisers but they also have all the big ones. If it didn't work for them they'd desert and go back eclusively to TV or paper ads. Instead online advertising - mainly Google (70% acc to one article I quickly found, think is now higher) - is now the biggest sector of the ad pie, having overtaken at a ripping pace all other media in last couple years. Certainly in selling academic PGT circles not advertising via Google is now basically suicide.

[hal-obrien.livejournal.com]

"Yeh and that's how Google made c $24bn last year - pulling a lot of wool over a lot of eyes there, huh?"

It happens. Enron had revenues of $101 billion in 2000. Lehman Brothers had in excess of $275 billion in assets under management and net revenues of $19.2 billion. And?

"Google may have a million tiny advertisers but they also have all the big ones."

Here's Nielsen's Top 10 advertisers of 2008 (the most recent time they've released such a list I can find). I realize it's anecdotal, but I can't recall ever seeing a Google ad from any of them.

And that's before we get into, if there's a strong correlation between advertising and revenues, why isn't the list of Top 10 Advertisers equal to the Fortune 10? The relationship appears to be random.

This report from the OECD in 2008 relays the report that Google's single largest customer is WPP (who own the Grey Group, Ogilvy & Mather Worldwide, Young & Rubicam, and JWT) but also that they have only about 1.5% of Google's sales.

[surliminal.livejournal.com]

I'm too tired to get into this one in depth just now. I don't find unfounded anecodote very helpful(I can't say what ads I've seen on Google lately at all except those for cheap flights - cos i don't pay any attention to any of the others)and I think its obvious my noting Google makes a lot of money (and this rises year on year - 17% up last year) means people find it useful to buy their services - ie their ad serving - and continue to do so more than once. Google ain't complaining re profits and they run on ad revenue pure and simple. Everyone else trying to get ads online revenue (newspapers etc) is. QED. Google's business model works (however bad it is for privacy, another story)- the others doesn;t. When Google start charging for their search or mail services you'll really know online advertising isn't working.

[surliminal.livejournal.com]

ps one more point - http://www.accuracast.com/seo-weekly/adwords-clickthrough.php seems to show classc long tail dis/n on click through - but for ads placed in first 2 pages clickthrough 8% to 0.25 (Oct 09 last year).Not so shabby & bears out everything i've read re targeted ads vs "ordinary" ones.

[hal-obrien.livejournal.com]

...which is, itself, anecdotal, since it's unsourced.

Honestly, you're consistently using classic language from a bubble: "Millions of customers can't be wrong! Everybody's doing it! It's suicide if you don't buy in along with the rest of us! Somebody must be checking if this actually works (though not me, of course)!"

I keep waiting for you to say, "This time it's different!" just to complete the cycle.

[surliminal.livejournal.com]

See below. No customer of Google is paying for anything other than ads. Google nonetheless makes very large profits year in year out. the salient feature of dot.com bubble businesses was they made no profits from their actual business merely if at all from hyped share prices and venture capital (I have made no ref at all to any valuation of Google by share price merely by reported PROFITS). Ergo, Google is not remotely fitting your model of a dot.com bubble merchant.

[hal-obrien.livejournal.com]

"Google is not remotely fitting your model of a dot.com bubble merchant."

Nowhere did I say that Google was anything as specific as, "a dot.com bubble merchant." What I said was, the language you're using to justify the premise Google is permanently robust is language that is common to all economic bubbles -- be it tulip mania in the early 1600's, the South Seas bubble in 1720, stocks/equities in the 1920's, stocks/equities circa 1990's/2000's, real estate in the 2000's, and gold today.

See, in general, This Time Is Different, Reinhart and Rogoff, 2009; Panics, Manias, and Crashes, Kindleberger, 2005 reprint; The Myth of the Rational Market, Fox, 2009. See the FT's Lex column of May 13th re: gold.

[surliminal.livejournal.com]

You're fighting your own battle with shadows here fpr whatever reasons. I never said Google was permannently rich; in fact if you look at my reply to Dave below I agreed with hom on the EXACT OPPOSITE. Last reply: life's too short.

[hal-obrien.livejournal.com]

"I never said Google was permannently rich; in fact if you look at my reply to Dave below I agreed with hom on the EXACT OPPOSITE."

To remind you of your earlier post:

"Google are and will continue to make a fucking fortune from advertising - pardon my french but this is just so so wrong. AdWords is pure gold. Notice that every new Google enterprise is just another excuse to serve more ads and add more data. They know exactly what they are doing."

Were you using "will continue to make" in some idiosyncratic way native speakers of English might not be familiar with? Do you have amnesia? Do you pursue arguments any which way, and hang the idea of rigor or consistency?

Because it's true -- you did agree with him on a statement that was the "EXACT OPPOSITE" of what you had earlier said. And this shows what, exactly?