Friday, August 18, 2006

Newspapers are so toast

It started gradually. What used to be one of my most treasured activities incrementally, and then completely vanished from my daily routine. There used to be nothing better than to sit down with a cup-of-joe, the newspaper and to spend and hour or more in total immersion. If I was really living, a Sunday morning read might be topped off by watching Meet the Press or This Week (or both).

Then the newspapers started piling up. It wasn‘t intentional, but more and more I noticed the old papers were in the recycling bin and they had never been removed from their plastic sleeves. When we realized that we hadn‘t read a paper in over six months it occurred to us that perhaps we should stop having it delivered. I haven‘t read an analog newspaper since. Even when I‘m traveling and they put a free USA Today outside my hotel door I don‘t read them. What‘s the point?

When I see things on the death of newspapers I pay attention. US newspaper groups could face a US$20 billion shortfall in the next five years as readers and advertisers shift to the web... .

The analyst group Outsell predicts that newspaper circulation will plummet nearly 20 percent by 2010 compared to 2004 levels, and newspapers will face a massive $20 billion shortfall that current online efforts will not erase. "The estimated shortfall is even larger than newspaper executives have acknowledged," said Outsell lead analyst Ken Doctor. The report urges newspapers to aggressively pursue new top-line revenue growth that goes beyond their "core" online efforts.

My prediction, all but perhaps a few major newspapers are toast. If they only see a 20 percent decline in readership they will be doing well. The newspaper culture is such that they won‘t be able to cede control of the things that people are now doing for themselves. They have been disintermediated.

I remember this old story (and for all I know it is entirely fictional) from my days in Iowa about a farm woman who won the lottery. She was asked what she was going to do with her newly acquired fortune and she answered, “I‘m going to just keep on farming until it‘s gone.” And that‘s my prediction for the newspapers. They will just keep printing until they‘re dead. Most of them will be going away never to be seen or heard from again. Few, if any, will be able to reinvent themselves in some form of viable online business model. The changes they need to make in order to survive will require a massive cultural change in their organizations and most will be incapable of the transition. It‘s not easy pretending to be something you aren‘t.

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