Complete Story
01/13/2017
Newspapers' only survival lies in revenue diversification
Let’s be clear about something right away: Paywalls, metered access, micropayments or any other euphemism for paid content will not save the newspaper industry.
Digital advertising? I suspect that challenges of ad blockers, click fraud, privacy concerns and, of course, the 800-pound competitive gorillas of Facebook and Google render it only part of the salvation equation.
So, what will save the newspaper industry? Personally, I don’t think it needs “saving” as much as it needs a new mindset. To find that new mindset, perhaps we need to think back to an old one.
My dad spent almost his entire adult life in the newspaper industry. The last 20-plus of those years – which ended with his retirement in the mid-1980s – was in circulation management with the Los Angeles Times.
That was back in the day when the Times sold for 25 cents per copy – and I became acquainted with the newspaper business model. My dad taught me that it cost a lot more than two bits to create content, print and distribute the newspaper and manage the relationship with the customer. Needless to say, this was a period of immense (some might say “obscene”) profitability for the industry, so there was obviously something to this advertising-driven model.
That brings me to the “old” mindset. Clearly, a precedent was set for giving away product (or selling at a loss) in order to build audience that could otherwise be monetized. Of course, they didn’t really refer to content consumers as “audience” back then; they were “readers” or “subscribers.” And the only real path to monetization was print advertising.
Nonetheless, there are parallels that, in its mad rush to everything digital, the news media must not simply dismiss.
