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Home » Opinion » Foreign Views
We hunger for news while newspapers die
January 21, 2009, Wednesday
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IF 2008 were an ordinary year, the precipitous decline of the newspaper business in the United States might have been the biggest financial story.
Big daily newspapers for more than a century could outshine in popular cachet what they lacked in industrial size.
Like movies, radio or television, they were part of the rhythm of American life. And like those industries, they have had to grapple over the years with new technologies that complicate their old business models: Radio bulletins made newspaper extras less urgent, for example, while the nightly news hastened the death of the evening paper.
Neither of those killed the industry, though. By the mid-1990s, newspapers were fetching unprecedented prices in the string of mergers that created behemoths like the Tribune Company, which in 2000 bought up the Times-Mirror Co for US$6.45 billion.
All the while, the various Wall Street darlings of American newspapering were struggling to adapt to the most disruptive technology of all, the Internet.
And by last fall, it was clear that this was a challenge of an entirely different magnitude.
Tribune, whose holdings include The Los Angeles Times, Chicago Tribune and Baltimore Sun, declared bankruptcy, unable to meet massive debts that owner Sam Zell took on to buy the chain.
The venerable New York Times saw its stock value fall by 60 percent and borrowed against its gleaming new headquarters off Times Square in order to meet its obligations.
Will the news business really die out? That's unlikely. But according to a number of Wharton faculty who have followed the subject, someone will have to come up with a new business model that pays for the sometimes costly work of gathering news while also squeezing a profit out of a readership whose options include the entire Worldwide Web.
Wharton's media watchers offer a few ideas:
? The Niche Route: Forget Capitol Hill. Forget the State House. Maybe even forget City Hall.
Steve Ennen, managing director of the Wharton Interactive Media Initiative, says one key to success is to provide news and information for the most local of levels.
The problem with devoting your own resources to covering popular topics like Hollywood or national politics is that someone else is also doing so - in the process, swiping your readers.
A news business that gets down to the nitty-gritty, though, can quickly have the field to itself.
? The Pay Route: The New York Times famously canceled its policy of keeping parts of its Website off-limits to non-subscribers.
Wharton marketing professor Eric Bradlow, co-director of the Wharton Interactive Media Initiative, says subscriber strategies aren't always doomed.
Companies from Dow Jones, which publishes the Wall Street Journal, to any number of small trade magazines that offer highly specialized information to affluent subscribers, manage to keep content behind a for-pay firewall, defying the conventional wisdom about an Internet audience that demands freebies.
The key is a degree of specialization, whether by locality or by subject matter, that the traditional general-interest paper didn't deliver.
(Reproduced with permission from Knowledge@Wharton, http://knowledgeatwharton.com.cn. Trustees of the University of Pennsylvania. All rights reserved.)
Big daily newspapers for more than a century could outshine in popular cachet what they lacked in industrial size.
Like movies, radio or television, they were part of the rhythm of American life. And like those industries, they have had to grapple over the years with new technologies that complicate their old business models: Radio bulletins made newspaper extras less urgent, for example, while the nightly news hastened the death of the evening paper.
Neither of those killed the industry, though. By the mid-1990s, newspapers were fetching unprecedented prices in the string of mergers that created behemoths like the Tribune Company, which in 2000 bought up the Times-Mirror Co for US$6.45 billion.
All the while, the various Wall Street darlings of American newspapering were struggling to adapt to the most disruptive technology of all, the Internet.
And by last fall, it was clear that this was a challenge of an entirely different magnitude.
Tribune, whose holdings include The Los Angeles Times, Chicago Tribune and Baltimore Sun, declared bankruptcy, unable to meet massive debts that owner Sam Zell took on to buy the chain.
The venerable New York Times saw its stock value fall by 60 percent and borrowed against its gleaming new headquarters off Times Square in order to meet its obligations.
Will the news business really die out? That's unlikely. But according to a number of Wharton faculty who have followed the subject, someone will have to come up with a new business model that pays for the sometimes costly work of gathering news while also squeezing a profit out of a readership whose options include the entire Worldwide Web.
Wharton's media watchers offer a few ideas:
? The Niche Route: Forget Capitol Hill. Forget the State House. Maybe even forget City Hall.
Steve Ennen, managing director of the Wharton Interactive Media Initiative, says one key to success is to provide news and information for the most local of levels.
The problem with devoting your own resources to covering popular topics like Hollywood or national politics is that someone else is also doing so - in the process, swiping your readers.
A news business that gets down to the nitty-gritty, though, can quickly have the field to itself.
? The Pay Route: The New York Times famously canceled its policy of keeping parts of its Website off-limits to non-subscribers.
Wharton marketing professor Eric Bradlow, co-director of the Wharton Interactive Media Initiative, says subscriber strategies aren't always doomed.
Companies from Dow Jones, which publishes the Wall Street Journal, to any number of small trade magazines that offer highly specialized information to affluent subscribers, manage to keep content behind a for-pay firewall, defying the conventional wisdom about an Internet audience that demands freebies.
The key is a degree of specialization, whether by locality or by subject matter, that the traditional general-interest paper didn't deliver.
(Reproduced with permission from Knowledge@Wharton, http://knowledgeatwharton.com.cn. Trustees of the University of Pennsylvania. All rights reserved.)
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