Are traditional newspapers doomed?
Ever since the first newsfeed appeared on the web, the traditional news business model – local business ads, subscriptions, and classifieds – was threatened. A few decades ago, newspapers were filled with lots of non-news items: real-estate listings, grocery store coupons, want-ads. These money-making inserts were bundled with a journalistic product that usually focused on a defined geographic area.
Distribution was limited by the cost of physically delivering a bundle of paper. Gradually, each area developed into its own local monopoly, usually with just one major paper per city. When the internet arrived with newsfeeds and specialized websites for sports or cars or real-estate or job-listings, the news business was turned upside-down. Over the last 20 years, lots of major papers have gone bankrupt: the Chicago Tribune, the Minneapolis Star Tribune, the Philadelphia Inquirer, and others.
Newsroom in Poland. Photo: Pawel Janczaruk. Source: Wikimedia
The papers didn’t go away, though. Journalism now is more competitive than ever. Its principal product – a finely crafted story – is always in demand, but stories be distributed to anyone, anywhere for essentially nothing. Information travels at the speed of the web. The New York Times now competes with the Los Angeles Times and The Manchester Guardian for readers, and the Frankfurter Allgemeine has a gorgeous mobile app.
Revenues from the news business aren’t drying up. The rivers of cash are branching out into myriad streams of targeted ads, web subscriptions, and streaming video services. As an ancient poet once observed: nothing ever perishes, but everything changes.
Douglas R. Tengdin, CFA
Charter Trust Company
“The Best Trust Company in New England”