Saturday, April 11, 2009

Newspapers and Their Changing Environment

A lot of people are complaining that newspapers are dieing.  That's not completely true.  Newspapers with an advertising based revenue model are dieing.  Companies that didn't depend upon that model are not.  Consumer Reports, Stratfor and Seeking Alpha didn't choose to follow that model, and they are doing fine.

What happened is that newspapers grew up in a particular business environment, did well and expanded.  A couple things changed that are contributing to their problems.  The economic environment changed and newspapers were/are too big to be supported by their revenue model.  This economic environment changed necessitates a business change that newspapers do not want to accept.  If newspapers were a quarter their current size, their revenue model would be fine.  For people running newspapers, that is not an acceptable solution.

The Roman's had a saying, "Times change, we change with them."  Until people running Newspapers are willing to change, they will continue to bleed a slow death.  More interestingly, other organizations, the Stratfor's, the Seeking Alpha's etc. will emerge and offer a better product with a sustainable business model that is aligned with the new economic environment.