Thursday, October 20, 2005

Keeping Readers, Losing Community

The media industry is buzzing about cuts at the Boston Globe and the New York Times. These are nothing new, as the whole industry seems to be in a financial tailspin, even as ownership posts regular revenue gains.

Dan Kennedy has a great post today making the case that the Boston Globe has held onto its readership, it's just that the readership shifted from reading the printed form to the online version.

In the grand scheme of things, this is what was predicted years ago and what publishing companies thought they wanted: readers without having to spend money on newsprint or production. So why all the sour faces?

Because they can't make money this way. It boggles the mind, but with the same readership spread over two medium, traditional newspapers just can't figure out how to make a go of it. This is especially troublesome when you consider that most newspapers admit that the daily 50 cents or $1 you pay at the newsstand covers only print-production costs while advertising makes up the bulk of revenue.

What pundits fail to note is the steep decline in classified advertising. It used to be that newspapers were our only consistent community source for information, so it made sense to advertise that old couch, used car, house or yourself in the pay-per-letter space in the back pages.

But walk through any office in any major city and ask 20 somethings where they found their apartment and I guarantee they'll tell you "Craigslist."Ask them where they looked for a job and the answer will be "Monster." Ask them about the massive REM poster on the wall and they'll tell you "eBay." These are things that used to be pretty good profit centers for newspapers. Think about it, a whole page, paid for by the letter. Compare that to a massive display ad, which brought in just a few thousand dollars, or a page of news, which cost the paper more.

The problem is not that the newspapers lost readers, it's that they lost their role of being central to the community. But then again, the Internet changed how we think of a community, as some are geographic while others are based on interest. So how can newspapers regain this ground?

Honestly, I have no idea.


Right on said...

You hit the nail on the proverbial head. As an-until-recently 20-something who happens to work for a metro daily, I cannot express my level of frustration at papers squeezing every last ounce of profits out of this year without having an adequate plan going forward. I would never think of paying to advertise the apartment in our two-family home when we can list it on Craigslist for nothing and get a more affluent pool of prospective tenants to boot. I hope to god my paper figures this out before we go out of business.

Chuck Tanowitz said...

Yes! That is exactly what's happening. On Sunday night I had a friend here who works in real estate, mostly in rentals. He told me that during the height of the rental season, the summer, he saw a constant flow of interest based on Craigslist ads.

And the Globe ads that cost him at least $400 a month? Not one hit.

So next summer where do you think his time and effort will go?