What's the Problem with Newspapers?
What's the problem with newspapers?
It's not complicated: Print revenue = shrinking. Print costs = constant. Online revenue = growing, but small, and online revenue isn't mature enough to replace the print revenue, yet. Right?
Brand new paperless news organizations with nothing to lose are bathing in money. Famous angel investor Marc Andreessen pumped money into Talking Points Memo in 2008, and in the middle of 2009 the blog The Business Insider closed its third round of investment in a $5 million round led by Andreessen. Estimates for the value of the paperless Huffington Post range from $100 million to $200 million. TechCrunch and Mashable are each estimated between $50 million and $100 million, and there are plenty of other examples of flourishing paperless news companies.
Even though I'm someone who is sentimentally attached to the print edition, I think a hard break with regularly scheduled print editions is a better move for newspapers than the slow, painful decline that most are going through right now (like just went down at the Washington Times).
Here's an opportunity: if a great newspaper like the Washington Post eliminates 90% of its printing costs, it could print an occasional "Premium Edition" that is far higher quality and sells more like a book. This strategy would be a variation of Seth Godin's theory of souvenir publishing, where most of his content is given away free, but his work creates demand for a printed book periodically.
PS - There are going to be tons of other ways for people to build innovative business models for news organizations. Click here for a cool new prototype of what online magazines may look like on tablet computers.
Will Marlow is the co-creator of AlumniFidelity, which helps schools and nonprofits improve their online fundraising results. Email him at will@alumnifidelity.com.
