Friday, March 24, 2006

Bashing Newsprint

Three recent articles offer advice to newspapers and all propose the same bold strategy-get rid of the paper.

Jettisoning Print

Knight Ridder Sale Could be McClatchy's Chance to Ditch the Print, Go All Online All the Time

Newspapers in Trouble?

In the writers's view the paper is the problem. Online is the future-it's cheaper, it's better. Go for it.

While the articles make much of the fact that traditional print is expensive, they do not provide any hard numbers about the actual cost savings for going digital. It is all fuzzy pronouncements like this.

Those massive rolls of newsprint and the whirring machines they feed that print newspapers are exceeded only in personnel costs on the typical newspaper operation, so getting rid of the first two ought to free up tremendous amounts of capital to be invested in new technologies and perhaps even in expanding the editor staff.

Sounds impressive, but how much of that "expense" is really sunk costs? How does the cost of newsprint compare to the cost of reporters?

None of the writers admit that newsprint might have some benefits for the reader. Is it not probable that some current newspaper readers/subscribers like print because it is convenient, portable, accessible or persistent? How many readers will be lost if a local paper goes digital-only and will the revenue loss be smaller than the cost savings?

A digital-only local paper runs smack into a stark consumer prejudice. Most of us expect to pay for paper but want online news to be free.

Why would any business throw away a solid franchise (the current subscriber/paper model) and stake their future on an untested revenue model that prices the product higher than customers perceive as fair?

None of the articles mention advertisers and that is a huge oversight. How much advertising revenue will a digital newspaper lose? Advertisers expect to pay a lower CPM for online ads. So the Daily Planet Online could lose revenue four ways-lower subscriber base, lower subscription price, lower reader base (for advertisers), and lower rate card for advertising.

Are we really confident that getting rid of newsprint will make up for that lower revenue and allow for more editorial staffers? Once again, let's see some numbers please.

Newspapers are in trouble. But their problems go deeper than the price of newsprint. The digital only option looks like a bold solution, but it is more hype than solid strategy.

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