In a recent article for B2B Magazine, Paul Gillin writes that the industry he once dreamed of working in is on a death spiral. In this essay, he says newspapers must change forever and a different model of publishing and journalism will take hold. Highlights and excerpts:
IN THE PAST:
- A metropolitan daily newspaper must employ several hundred people to produce the product. Newspaper advertising is very expensive because of the large fixed costs. That business works as long as advertisers are willing to pay for it and for many years they have. That's because newspapers were one of the most effective means for businesses to reach consumers in certain geographies.
- Once a newspaper achieved dominance in its market, it was practically unassailable. As consolidation reduced the total number of daily newspapers (there are about 1,500 in the U.S. today), competitive pressure eased and the winning papers were able to drive their ad rates higher.
IN THE FUTURE:
- The business model of metropolitan daily newspapers is poised for a collapse that will be stunning in its speed and scope. The cause is Web 2.0 and the vastly superior economics of that emerging business.
- Take the Fark.com (a blog) example. The site generates 40 million page views a month with a staff of one full-time person and two contractors... Yet this could approach $10 million in revenue before long.
- Craigslist.org - the fifth most popular site on the Internet, with global reach and an estimated four billion page views a month. It is absolutely killing the newspaper classified ad business. One published report estimated that Craigslist had cost San Francisco newspapers $70 million in revenue in just one year. The entire staff is 23 people.
- What emerges from the rubble of the newspaper industry will be a fresh, vibrant and very different kind of journalism. It will make a lot of traditionalists uncomfortable... But it will ultimately be an evolution of the profession into something that is richer, more inclusive and much more dynamic than anything we have ever known.
- Instead of 1,500 print newspapers, there will be perhaps five to ten national “super-papers†and many thousands of regional and special interest community news sites.
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