The market for news

Cross-posted at the Mises Economics Blog: http://blog.mises.org/13055/the-market-for-news/

Historically, newspapers have made money in two ways. They make money from readers, and they make money from advertisers. Originally, most of the money that newspapers made came from readers. In the late 19th century and early 20th century the old newsboy sales model was based on incentives to move as many newspapers as possible at the highest possible price. Advertising was a source of revenue, to be sure, but not the primary source.

Over time, the emphasis would shift away from revenue provided by readers and toward advertiser revenue. Eventually, advertiser revenue would make up at least 70-80 percent of all revenue. Essentially, newspapers gave up on getting the readers to cover the full cost of the news a long time ago. The daily cost of a newspaper subscription is, more often than not, well below the cost of producing a paper copy of a newspaper. Until the last few years, the real money was to be made in advertiser dollars.

But with the significant decline in circulation (see here) advertisers know that they get less bang for their buck every month that circulation drops.

So, one day, after years of plummeting circulation and revenue, the newspapers suddenly realized they'd better get the readers to start paying for the news. Their most brilliant ideas revolved around erecting pay walls around content. In other words, the newspapers, to solve their revenue problem, returned to a revenue model that hadn't been used in decades. It hasn't been working out.

Mashable today carried a nice piece on some newspapers that are finally starting to look at innovative ways to make money. Primarily, they're finding ways new ways to make money off of advertisers.

The new innovation that some papers are showing results from the fact that some papers are finally starting to come to grips with reality. The new reality is that news can and will be produced without traditional newspapers.

For the last several years, the entire business model of the newspapers seemed to be "you'll miss us when we're gone, so give us money," which wasn't a rock-solid strategy to say the least.

But other organizations have already moved in to displace them. As the Mashable article notes, laid off journalists from closed and downsized papers have started to produce their own news. Here in Denver, at least one online newspaper aggregates news from a variety of blogs written by former newspaper writers and other bloggers. The blogs are sometimes funded by private firms, such as in the case of this real estate blog.

It has become clear that journalism will be funded, but that the new reality is far more decentralized, complex, and competitive.

The days are gone when one could ask "did you read the paper today" and everyone could discuss the same few news stories selected by even fewer news editors. Today, people can get the news they want, and different people are interested in different things. The market loves this kind of diversity and will move in to serve it in even more diverse ways.

The market is currently in transition, and transitions in the market produce winners and losers, but we're not sure yet who the big winners are in this. The losers are already pretty obvious. Capital needs to be moved to where it is demanded. That is to say, it will be moved away from physical printing presses and old-timey newspapers and toward new innovative leaders in delivering news. Some newspaper organizations will get learn to make money from this, and many will not.

Uh-oh, bigots don't like me

There's a web site called VDARE which many corporate web-surfing programs block for "racist content." They're a site that spins a variety of bizarre theories about the inferiority of non-Anglo Saxons and so on. Articles criticizing me for my moderately pro-immigration views have appeared more than once. On this site, a writer seems to (or at least did at one time) attribute to me the famous "Go back to Boston" tirade by Augustin Cebada of the Brown Berets. Comments that are a bit fiery for my tastes, and somewhat violent and in poor taste. And, I never wrote them. [Here is the original piece, although I don't want to link directly to such a site: http://www.vdare.com/misc/080514_pendleton.htm]

This is simply an occupational hazard of writing a lot, I suppose, since sooner or later, someone would attribute something to me that I never wrote. In my original posting in which I quote (without endorsement) Cebada's views, I did point out the hypocrisy of those who claim to be so horrified by such a statement, while supporting similar sentiments in favor of Anglos. My piece is basically a historical analysis, which is why I compare modern sentiments to those of John C. Calhoun, although for some people, everything is a cause for histrionics. [Here's the archived link, since my old blog posts prior to 2007 have been deleted.]

Which brings me to why I ever brought this up. The "racialists" (as they call themselves) who support these hyper-nationalistic views have twice now hurled insults at me in the comments section of the Mises Economics blog. Personally, I find it rather bizarre that some people have so much free time as to sit around starting fights over articles that were published 4 years ago. But there's a lot of variety out there I suppose.