Wednesday, October 29, 2008

Mourning Old Media’s Decline

David Carr of the New York Times asks an interesting question regarding his article, "Stop and think about where you are reading this column. If you are one of the million or so people who are reading it in a newspaper that landed on your doorstop or that you picked up at the corner, you are in the minority. This same information is available to many more millions on this paper’s Web site, in RSS feeds, on hand-held devices, linked and summarized all over the Web." I am in the minority, I guess. I still get the New York Times delivered to my house and still enjoy reading the newspaper. At the same time, as I share it with my wife, I tend to go to the web to read stories in sections that she may have taken. And when I am in full commuting mode, I just might consider a Kindle to support my reading habit.

Newspapers, like cable television, has enjoyed a two-tiered revenue model of subscription and advertising. The growth of new technology has moved content outside the gated, subscription window, into an open access model. Consequently, the subscription model has lost as it is no longer necessary to "pay to play". Cable operators should take notice of this trend. As video content leaves the gated walls of its liner channel for Hulu and online consumption, the consumer may stop paying for its cable subscription and devotes itself to a web based experience. Any monetization will come from advertising until the industry figures out a new media subscription model.

Web based advertising is cheaper than print advertising. It is far easier to measure hits and target segments. At lower CPMs, it is harder for the gain in web advertising to offset the loss in print advertising. For the print industry today, it has led to a reduction in costs to offset the lower revenues. Mistakenly, some of that reduction is coming in the form of editorial cuts, the writers and creators of content. But without content, what do you have to monetize? "At the recent American Magazine Conference, one of the speakers worried that if the great brands of journalism — the trusted news sources readers have relied on — were to vanish, then the Web itself would quickly become a “cesspool” of useless information. That kind of hand-wringing is a staple of industry gatherings. But in this case, it wasn’t an old journalism hack lamenting his industry. It was Eric Schmidt, the chief executive of Google." Content is king and branded, respected content has value.

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