Source: Max Pixel. CC0
Ever since the first story appeared on the web, the traditional newspaper business model – local business ads, subscriptions, and classifieds – was threatened. Just a few decades ago, newspapers were filled with non-news items: real-estate listings, grocery store coupons, want-ads. These money-making inserts were bundled with a journalistic product that focused on a limited geographic area.
Distribution was limited by the cost of physically carrying a bundle of paper. Eventually, each major paper developed its own local monopoly, usually with just one major paper per city. When the internet arrived with aggregators and specialized websites and personalized lists, the business was turned upside-down. Over the last couple decades, some major papers have gone in and out of bankruptcy: the Chicago Tribune, the Minneapolis Star Tribune, the Philadelphia Inquirer, and many others.
These papers didn’t go away, though. Journalism now is more competitive than ever. Its principal product – a finely crafted story – will always be in demand, but stories can be distributed to anyone, anywhere for essentially nothing. Information travels at the speed of the web, and it can be copied infinitely. The New York Times now competes with the Los Angeles Times and The Manchester Guardian for eyeballs, but readers also get customized lists of stories and videos in their newsfeeds and story lines from friends and contacts.
Revenues from the news business aren’t going away. Those rivers of cash are branching out into a delta of targeted ads, web subscriptions, streaming video, and other innovations. As an ancient sage once observed: nothing ever disappears, but everything changes.
Douglas R. Tengdin, CFA
Charter Trust Company
“The Best Trust Company in New England”