We’re in a bad economy, this is not news. What is news is when the company that publishes the two major papers in your city files for Chapter 11 Bankruptcy. The good news that that these papers look like they’ll be able to move through bankruptcy sucessfully. The bad news is that this is a sign that our economy is shifting furture (and faster) than a lot of organizations are ready for.
Newspapers are based on a rather simple business model. People pay for the physical medium through subscriptions (or by picking up a copy at the local WaWa), while the cost of production is handled through selling advertising. Unfortunately for these businesses, the spread of broadband has killed this model. Subscriptions have dropped as broadband has spread, and advertising rates are set in part by the number of physical papers that can be sold. This has resulted in less advertising dollars, which also shrinks the amount of actual stories that a paper can put in each edition. To make matters worse, the cost of materials has skyrocketed, increasing the strain on the model. Newspapers have tried to hold on to a form of their business model as they’ve moved on-line, but on-line advertising revenus haven’t been able make up for the losses the physical editions are racking up. Demanding on-line subscriptions has also fallen flat on it’s face, as loyalty to brand doesn’t translate easily to the on-line realm – people just find the same information on another site (something even the New York Times has figured out).
Newspapers are going to have to come up with a completly different business model if they are to transition fully into the on-line economy – utilizing tools that might actually be currently percieved as “threats” by the people currently running the show. RSS, Twitter, Video Sharing, and Blogs are going to have to become the central focus of the business, rather than add-ons. Increasingly, the print medium (even in e-reader forms like the kindle) is going to become the also-ran.
What’s this shift mean for churches and non-profits? Well, that’s another post.