How to Sink a Newspaper

“Information wants to be free.”

Newspapers have allowed their content to be hawked and spread over creation thanks to TV, radio, and now the web. A fifty-cent investment in Today’s Edition is now a zero-cent online surf. And where print ads are actively sought out by readers, web banners and pop-ups are the bane of web readers’ existence.

Newspapers generate most of their online revenues from classified advertising, not from news. Borrell Associates estimates that newspaper Web sites generated 78% of their revenues from classifieds in 2006.

The above from a fascinating look into how one regional newspaper publisher thinks and acts (Wall Street Journal May 7, 2007). Article author, and publisher of the Arkansas Democrat-Gazette, Walter E. Hussman Jr. describes selected web and print train wrecks occurring at comparable regional newspapers. Where these companies opted to discontinue their fee-based subscription model in favor of free content, Hussman forged ahead with a paid model with various bells and whistles such as email alerts, keyword searches, photo galleries, online videos, and so on. What Hussman did not admit is that such upticks are available without turning on the printing press.

When news is free, quality suffers. When quality suffers so goes readership and ad revenues. But is that central to today’s dilemma facing newsrooms?

Fast-forward to a WSJ reader’s letter in the May 14 edition that really hits the nail on the head:

… is there really any need to send sports writers across the country when every game is available on television everywhere in the country? … ill-conceived expenses are cutting further into bottom lines than are online news readers.

Hussman is fighting a losing battle. Loss of print readership and ad revenue cannot be overcome by “value-adds” lacking much traction. Publications dependent upon ad and subscription revenues have just one option: Do what you do best by delivering unique content but in a form relevant to the times. Then sell the presses on eBay.

Mega investor Warren Buffet sums it up best:

It’s hard to make money buying a business that’s in permanent decline. If anything, the decline is accelerating. Newspaper readers are heading into the cemetery, while newspaper non-readers are just getting out of college. The old virtuous circle, where big readership draws a lot of ads, which in turn draw more readers, has broken down–Hypergene MediaBlog.

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