Monday, December 27, 2010

It's Not All the Internet When It Comes to Newspaper Decline

Conventional wisdom blames the internet for the newspapers decline in the US and Brittan. But as this poll and some thought show there's much more involved than just free internet content that's behind the problem.

Newspapers in the US have just depended on advertisement sales for way to much of their income. And as advertising as moved to the internet newspapers (and magazines) have lost their primary source of revenue. That loss coupled together with the resulting decline in the quality and quantity of newspapers news coverage is what has spelled their huge losses in readership.

In those areas where newspapers receive more of their income from subscribers and other sources they have fared much better. And with more stable incomes they have kept the quality news reporting that is required to engage subscribers beyond what the free content of the internet can.

So the market changes in advertising and the resulting loss of income are much more the US newspapers underlying problem than the internet. Newspapers in the US (and Brittan) must find ways to address the changing markets not seek to place the blame on the internet.

Amplify’d from

Ads, not internet, to blame for newspaper woes: study

It's common wisdom that the long, painful decline of newspaper business models began as the internet blossomed.

The internet is blamed for just about everything, from declining print subscription revenue to freefalling classified ad revenue. But is the common wisdom about the internet and newspapers wrong?

According to a study conducted by Oxford's Reuters Institute for the Study of Journalism, British and American newspapers aren't struggling because of the internet. Instead, they're struggling because they've been too dependent on advertising revenue.

In looking at Scandinavia and Germany, for instance, the study's authors noted that online activity is high, but newspapers in these regions are still doing quite alright. So how do newspapers in Scandinavia and Germany compare to their British and American counterparts? There's one difference that stands out: the former generate on average 50% of their revenue from ads, whereas the latter generate closer to 80% of their revenue from ads.

That, the study authors believe, is a big part of the problem. "Countries like the US, Germany and Finland all have about the same proportion of
internet users
," they write. "However, the American newspaper industry, which has generated more than 80% of
its income from advertisements, is today in a much more serious crisis than its
counterparts in Germany and Finland, where advertising typically constitutes
about 50% of total revenues.

While it's nice to see increasing recognition that there's a lot more to the woes of the British and American newspaper industries than the internet, to pin the blame solely on where revenue has traditionally come from might be a little bit too simple. The British and American newspaper markets have many differences with the Scandinavian and German markets. The numbers make that abundantly clear: of the top newspapers globally, as measured by circulation, only one is German and none are Scandinavian. On the other hand, six of the world's most widely circulated newspapers are in the U.K. and eight are in the U.S. Bottom line: comparing the newspaper markets in different countries to each other is often little more than an apples to oranges comparison.

In reality, British and American newspapers shouldn't 'blame' the internet. And they shouldn't 'blame' advertising either. Blame is pointless. Markets change. The companies that succeed aren't necessarily the ones that are best positioned for the precise changes that occur; they're the ones that respond most ably to it.


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