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Printing Industy Blog

BoSacks Speaks Out: On Newspapers, Publishing, Ads and an Unknown History

By Bob Sacks
Published: September 14, 2012

"Newspapers with declining circulations can complain all they want about their readers and even say they have no taste. But you will still go out of business over time. A newspaper is not a public trust - it has a business model that either works or it doesn't."

– Marc Andreessen

Over the years there has been an enormous amount of discussion about how the Internet "killed" the newspaper industry. I do not believe that it is a true statement - at least the murder did not take place as a cause and effect relationship.

Did you know that in 1960 the newspaper penetration rate was as high as 1.1 newspapers in every household in America? Since that pinnacle moment in time, there have been many business, social and work related changes by the public that have affected newspaper readership. By 1970 it was down to .96 newspapers per household. In 1980 it was .77 and by the advent of the internet in 1995 it was at most .57 penetration. Do you see the trend?

I suggest that the Internet didn't kill the newspaper business, but that it is at best an accessary to the murder, if indeed it was murder at all. I think a strong case can be made for a neglectful homicide perpetrated by the immediate family.

The newspaper industry had and still has the same opportunities that every other business new and old has had as the information distribution business changes from what it was to what it will be. There are hundreds of billions of dollars being made and ready to be made in the "new style" modern publishing/reading business. The newspaper industry has had ample time and opportunity to adjust, correct and amend their business plans.

Sometimes I believe that they were just too profitable for far too long to understand the peril at their doorstep. I also believe that for far too long they were waiting for things to get back to normal. I am afraid I have to report that things will never get back to normal, as there is no longer anything that we can remotely call either stable or normal.

 

Discussion

By Bruce Watermann on Sep 14, 2012

This is a major generational shift. I can't imagine that many of those in college now that will soon be starting households will ever see a newspaper rolled up on their front porch. It has become an outdated form factor and the Internet is the perfect format for news, constantly updating and refreshing. Newspapers as well as those that currently use print for throwaway uses need to think about how to add value when ink hits paper. You either keep it or consume it. And consumption is becoming less effective as a delivery device as well increasingly socially unacceptable.

 

By Harvey Hirsch on Sep 17, 2012

Blame the new fangled technology for Johnnie not wanting to learn how to read. We are 37th in literacy, math, etc so unless you can lower the reading level when creating content, you may find yourself obsolete. Fact-checkers not withstanding.

 

By Clint Bolte on Sep 18, 2012

Newspapers continue to be a viable vehicle for the delivery of retail advertising circulars for communities of all sizes. The only alternative for mass distribution is direct mail.

And keep in mind that direct mail is only economically viable in the United States. In the other developed and developing countries of the world where postal services are overwhelmingly privately held (not public or semi-public entities) direct mail is not cost competitive with newspaper distribution.

And countries where a major newspaper or newspaper chain (such as Transcontinental in Canada) have such a significant economy of scale versus regional newspapers they can offer a very attractive mass distribution package price.

I realize this has little to do with the literacy issue that you guys raise. But it also has little to do with the culture of where do future generations get their news.

The lawsuit in the United States of the Newspaper Association against the Postal Service because of the Negotiated Service Agreement discount extended to Valassis is significant. It highlights the validity and threat of these competing revenue streams for distribution of printed flyers and advertising circulars.

 

By Robert Leonard on Jan 01, 2013

Bob, your article is so dead on. The two comments (prior to mine (2 & 3)) sound more like sour grapes - "Blame the new fangled technology for Johnnie not wanting to learn how to read" and job preservation - "Newspapers continue to be a viable vehicle for the delivery of retail advertising circulars".

"Epic 2014" should be revisited - it didn't get the name right, but it got the vision right on.

 

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