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Back in the 1950s, Buick turned cast-iron newspaper paperweights into ads. I have no idea how many cars these ad-weights sold (I bet Buick brand managers in the 1950s didn’t either), but — man — wouldn’t it be great to have one of these holding down stray papers on your desk right now??
More old newspaper paper weights at NYT.
Interesting stats from the latest Kaiser Family Foundation study of media consumption among young people (via Business Insider):
Young people spend more time consuming media on their cellphones than talking into them.
They’re watching 38 more minutes per day of TV content in 2009 versus 2004, but 25 minutes less (per day) of it is live on an actual TV.
Reading books is up almost 20% (21 minutes to 25 minutes per day) since 1999. But magazine and newspaper reading are down 40% and 57%, respectively, to 9 minutes and 3 minutes per day. Time spent reading anything on paper (38 minutes) is dwarfed by time spent watching TV content (4 hours 29 minutes) or time in front of a computer (1 hour 29 minutes).
I hear that question a lot. As the mean-spirited bloggers steal audience from traditional publications, and as audiences migrate from reading publications printed on paper to reading them online (where the ad rates are lower), what’s going to happen to the Fourth Estate? Who’s going to pay for investigative reporting??
Seth Godin reminds us that the journalists and photographers aren’t the expensive part of running a newspaper or magazine:
“A magazine with a million subscribers might spend more than a million dollars to deliver a single issue to its subscribers. A million dollars spent on postage, printing, subscription sales, fulfillment, ad sales, sub rights and more. I wouldn’t be surprised if the freelance budget for the writers and photographers (the real reason people read the magazine) is less than 15% of the cost, perhaps a lot less.
“The economics of this business are interesting. Millions spent, millions earned, and almost all of it goes to pay for the paper and the friction it brings.”
So let’s ask different questions. Who’s going to pay for the paper? Who’s going to pay for our collections department? Who’s going to pay our enormous gasoline bill to fill up those delivery trucks? Or even, who’s going to sell the ads?
Two good things happen. One, the discussion is immediately less hostile: Reading news on the internet doesn’t mean you hate democracy. Two, solving the business problem gets easier. Is your ad sales team inefficient? OK, outsource to Google or Federated Media. Is your accounting group costing too much? Maybe software and offshore partners can streamline your approach. Paper, ink and delivery costs decimating your profits? Check out the Internet and the iPad.
The Pulitzer Prize
It’s nearly impossible to talk about the future of news without someone predicting the extinction of two species at once: investigative journalists and working democracies. You can’t argue that wouldn’t be bleak. But Google’s chief economist Hal Varian points out that the biggest cost center at newspapers isn’t the journalists.
“There are huge cost savings associated with online news. Roughly 50% of the cost of producing a physical newspaper is in printing and distribution, with only about 15% of total costs being editorial. Newspapers could save a lot of money if the primary access to news was via the internet.”
He also points out that newspaper circulation declines can’t entirely be pinned on the Internet: “Circulation has been falling since 1985 and circulation per household has been falling since 1947!”
Perhaps the Internet isn’t killing news, it’s just making what one New York Times writer calls a new kind of news junkie — one that doesn’t demand we spend enormous amounts of money putting that news on paper and tossing it to her doorstep.
Three months after the Dolan family (owners of Cablevision) bought Newsday for $650 million and put the website behind a paid subscription wall, only 35 people have coughed up the $5 per week fee.
Subscribers to the print edition and to Cablevision’s Optimim Cable package can read the site for free, which, as one Newsday reporter put it (via The NY Observer), makes Newsday.com “the freebie newsletter that comes with your HBO.”
Two observations:
One: While it might suggest that publishers can slow the abandonment rate among print subscribers by giving those subscribers more value for the buck (generally a good business practice!), it’s another data point in the argument that paid online news models (NYT, for example) will struggle.
Two: The above model is broken. If news audiences are migrating to digital formats, publishers that — come on, let’s be honest — erect a pay wall around the digital product as a ploy to save print (or cable) subscribers are eating their own children. It’s a tactic to buy more time to figure out digital. But while traditional print publishers are “buying more time,” their competitors (especially the native digital publishers) will win the game. In other words, buying time before you have to deal with your digital strategy is the opposite of what publishers should be doing.
Which means they have the furthest to fall as ad dollars follow audiences to the Internet. From SAI’s Chart of the Day.
That’s a quote from James Gordon Bennett, editor of the New York Herald, in 1845, a year after Samuel Morse connected Washington, DC, with Baltimore on the information superhighway of the day, the telegraph. But the telegraph didn’t kill the newspaper era. From The Economist:
“The telegraph did indeed reshape the newspaper industry, but not in the way that Bennett and others had predicted. For although telegraph wires could deliver news more rapidly than ever, they had a ‘last mile’ problem: they could not disseminate news quickly to thousands of people. Only printed newspapers could do that. Far from putting papers out of business, the telegraph actually made them more attractive and increased their sales.”
Ah…. Perhaps news readers have always valued distribution over the content itself. Bennet is finally right: If you’re in the newspaper business, new technologies have put you in a terrible, probably hopeless, spot. If instead you’re in the news business, though, you’ll figure out how these digital platforms enable more efficient news delivery — dominate that last mile, like you have for the past 200 years! — and you’ll let your legacy newspapers go the way of the telegraph.
Newspapers have lost 7 million subscribers in the past 25 years, while online newspapers have picked up 30 million readers in the past five. See? The Internet’s not all bad! (Though you might argue that email’s mostly bad, since 90% of emails sent each day are spam.)
(Thanks, @emilyquestions!)
From Schmidt’s editorial in WSJ:
“It’s the year 2015. The compact device in my hand delivers me the world, one news story at a time. I flip through my favorite papers and magazines, the images as crisp as in print, without a maddening wait for each page to load.
“Even better, the device knows who I am, what I like, and what I have already read. So while I get all the news and comment, I also see stories tailored for my interests. I zip through a health story in The Wall Street Journal and a piece about Iraq from Egypt’s Al Gomhuria, translated automatically from Arabic to English. I tap my finger on the screen, telling the computer brains underneath it got this suggestion right.
“Some of these stories are part of a monthly subscription package. Some, where the free preview sucks me in, cost a few pennies billed to my account. Others are available at no charge, paid for by advertising. But these ads are not static pitches for products I’d never use. Like the news I am reading, the ads are tailored just for me. Advertisers are willing to shell out a lot of money for this targeting.”
The relevance problem with newspapers started with radio, TV and 24-hour cable news (not the internet), even if Craigslist, eBay and Google added to the pain by breaking down their primary business model. But all the whining that search engines (like Google) and news aggregation services (like Digg) are killing the news business neglects the fact that the Google News headline service sends news publishers a billion clicks a month. It’s time for publishers to turn that enormous audience into a new business model.
(Thanks for sending, Keval!)
