Newspapers Are Unbundling And Then?

April 9, 2008

What is the future of the newspaper? Big question.

Fact is: Just 36 percent of 18-to-24-year-olds reported reading a daily newspaper in 2006, down from 73 percent in 1970. So newspaper companies are following their readers and advertisers online.

But what happens there? Is a newspaper online still a newspaper?
What about the business model? Bundling in the newspaper business is as crucial as bundling is for the music industry. The music industry made some mistakes, thought bundling is not as important… now the music industry is changing, is trying to establish the subscription model…

Can the newspaper industry learn anything from the music industry?

Nicholas Carr wrote an interesting article about the “Great Unbundling” in the newspaper industry and all the problems that could emerge. First he answers the question: Is a newspaper online still a newspaper?

“The nature of a newspaper, both as a medium for information and as a business, changes when it loses its physical form and shifts to the Internet. It gets read in a different way, and it makes money in a different way. A print newspaper provides an array of content—local stories, national and international reports, news analyses, editorials and opinion columns, photographs, sports scores, stock tables, TV listings, cartoons, and a variety of classified and display advertising—all bundled together into a single product. People subscribe to the bundle, or buy it at a newsstand, and advertisers pay to catch readers’ eyes as they thumb through the pages. The publisher’s goal is to make the entire package as attractive as possible to a broad set of readers and advertisers. The newspaper as a whole is what matters, and as a product it’s worth more than the sum of its parts.

When a newspaper moves online, the bundle falls apart. Readers don’t flip through a mix of stories, advertisements, and other bits of content. They go directly to a particular story that interests them, often ignoring everything else. In many cases, they bypass the newspaper’s “front page” altogether, using search engines, feed readers, or headline aggregators like Google News, Digg, and Daylife to leap directly to an individual story. They may not even be aware of which newspaper’s site they’ve arrived at. For the publisher, the newspaper as a whole becomes far less important. What matters are the parts. Each story becomes a separate product standing naked in the maketplace. It lives or dies on its own economic merits.”

He is right. “The analog newspaper bundle and concept” won`t work in the digital world. So he is worried about the future of quality “hard” journalism:

“The most successful articles, in economic terms, are the ones that not only draw a lot of readers but that deal with subjects that attract high-priced ads. And the most successful of all are those that attract a lot of readers who are inclined to click on the high-priced ads. An article about new treatments for depression would, for instance, tend to be especially lucrative, since it would attract expensive drug ads and draw a large number of readers who are interested in new depression treatments and hence likely to click on ads for psychiatric drugs. (…)

On the other hand, a long investigative article on government corruption or the resurgence of malaria in Africa would be much less likely to produce attractive ad revenues. Even if it attracts a lot of readers, a long shot in itself, it doesn’t cover a subject that advertisers want to be associated with or that would produce a lot of valuable clickthroughs. In general, articles on serious and complex subjects, from politics to wars to international affairs, will fail to generate attractive ad revenues. (…)

When bundled into a print edition, hard journalism can add considerably to the overall value of a newspaper. Not least, it can raise the prestige of the paper, making it more attractive to subscribers and advertisers. Online, however, most hard journalism becomes difficult to justify economically.

Speaking before the Online Publishing Association in 2006, the head of the New York Times’s Web operation, Martin Nisenholtz, summed up the dilemma facing newspapers today. He asked the audience a simple question: “How do we create high quality content in a world where advertisers want to pay by the click, and consumers don’t want to pay at all?”

The answer may turn out to be equally simple: We don’t.”

I am not sure, if he is right here. First, I think, if there is attention for an article, there will be a chance to monetize this article, even if it`s a quite “depressing” news. Advertising and targeting is changing online, it can be personalized … there will be a way to optimize this.
Second, why do we think there is just this one direction of unbundling? Isn`t there the chance to make bigger bundles? Isn`t there the chance to use complete new ways of content delivering? Online is a complete new medium. It has much more options than just reading… it has video, it’s interactive, it’s faster … et cetera et cetera…
So, what could happen? Is newspaper content merging with tv content? Promoted and personalized by social networks and widgets? Who knows…

Of course, I don`t have an answer, but I’m sure there is a chance for a “bigger bundle”…. a complete new way of news delivering…
News delivering is a service… we have to create a new “service concept”…

Just a thought…


2 Responses to “Newspapers Are Unbundling And Then?”

  1. Paul Camp Says:

    I totally agree that the Internet offers a host of new opportunities for newspapers . . . not only a bigger bundle, but a better, richer, more nuanced bundle. The issue is newspaper folks have to think in different ways to accomplish this. By training and tradition newspapers deliver a little information about a lot of subjects while most Web sites deliver a lot of information about a narrow topic. Newspapers have to be able to think deep rich and vertical in order to succeed on the Web, which is easier said than done.

  2. Johnson Says:

    Internet made huge difference in newspaper circulation. In this digital age, most of the readers are looking for online editions of the newspapers and as the result online readership is increased rapidly from the past three years. Companies like helping the news publisher to deliver their publication through web, pod cast, blog, RSS, social media, etc… this is good idea in circulations.

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