Newspapers impacted by internet news
Newspapers around the country are laying off massive numbers of employee and watching their stock, their quality and their readers drop as a result as readers turn to the internt.
The New York Times cut 100 positions from their newsroom. The San Francisco Chronicle has cut or will cut 25% of its news force. And The Washington Post, The LA Times, Chicago Tribune, Baltimore Sun, and just last month The Atlanta Journal Constitution have also all announced layoffs. According to many reports on the numbers, there have been 70,000 US media layoffs since 2000.
Will layoffs affect the reader and do we care?
Of course this will affect us. Newspapers inform, educate, entertain, and keep us in touch with the world. Newspapers employ some of the most talented and experienced writers and investigators in the world. When newspaper cut back the chances of great reporting are also cut back. The chances of great writing on anything from the Iraq war, to the Watergate Scandal, the coverage of presidential elections, health care all goes down with journalism’s sinking ship.
People worldwide have been watching the demise of newspapers for some time so the news and plight of it is not news.
In last year’s February version of Vanity Fair, Michael Wolff wrote an article titled "Is This the End of News?" Wolfe argued that newspapers have no clear revenue model to pursue online. He pointed out that they are undermanned when faced with the likes of Facebook, Google, Digg, etc. He is not very hopeful about the future of the major newspapers. He also holds out little hope they’ll ever find and pursue viable solutions to transition their businesses.
So where will readers go for news once the major media is no longer able to meet the demand? The Drudge Report? The Onion? Bloggers of all makes and models? Entertainment Tonight?
Many people do have their news need met by free online magazines or bloggers. But for others, national news is still the gold standard. So there is a demand and a need for the New York Times, The LA Times, The Washington Post, San Francisco Chronicle, and Miami Herald.
So if the demand is there, why are newspapers struggling? Why the need to cut staff, make money, make payroll, and hold up subscription levels? Well, online news and information is a big reason. Most people can read most national papers like newyorktimes.com for a fraction of what they pay for the paper version.
There is no easy fix, as most publishers have found. Newspapers who try to move their business online, find they must reduce their minimal subscription revenue and, more importantly, face substantially more competition for advertising dollars.
Twenty years ago, offline newspapers were the only game in town and newspapers were the kings of their respective cities. Advertisers had no choice really. Now that advertisers have the internet they can use Google or Yahoo! or other online traffic sources to target consumers in a given city.
So what is a newspaper to do? They’ve tried different models – none with any real success. The most common strategies they’ve implemented to date have included:
1. Transforming their entire business via M&A activity. The NYT did this when they bought About.com. The M&A route takes a great deal of money and effort. If a group has the resources however it’s a legitimate way to try and bring the DNA of online advertising and online business not an organization. The problem is senior management has to be committed to the effort.
2. Other papers have attempted to blend – combining offline and online newspaper placements. The challenge with that approach is that there is usually not enough online newspaper traffic to make up for the offline spend.
3. In recent months some newspapers have attempted to merge traffic for advertisers in an effort to make up ground on volume. That leaves them with two other issues to solve: (1) how much traffic do you need to be relevant to an advertiser? (2) Most online advertisers want the major search engines to be an important part of the mix when they place their online marketing buy so – are they getting that?
4. Other newspapers have tried to package newspaper advertising sales with a Google/Yahoo! search marketing package. In other words they’re attempting to “draft” off of the success and name recognition of Yahoo! and Google. However, if sales teams don’t understand the online search marketing sale as well as the newspaper sale it’s not likely to work.
Few newspapers have committed the financing and resources it will take to succeed in changing the behavior of newspaper sales staffers. So what are readers to do? On the one hand things don’t look good for the future of newspapers, but on the other, all kinds of possibilities are opening for the online marketer in terms of news potential.
