Clay Shirky has written a truly brilliant essay on the future of newspapers. The short version: newspapers don’t have a future – is, of course, not surprising. Additionally, journalism – not newspapers – are something that we, as a society, very much need. Journalism in and of itself is not a profitable business and has been subsidized for a long time – as Shirky says by WalMart (publishing ads that help the times pay for the Baghdad bureau) and the 14 year old kid who, for a very low wage, delivers the newspaper to your home in the suburbs.
Printing presses, trucks, ink, and union wages simply can’t compete against WordPress, servers, and electrons. And they won’t which is why we should expect that most printed news is going to simply disappear – as anachronistic as a steamship plying the Atlantic ocean or a horse and buggy taking a businessperson home from Wall Street to their suburban home on 70th street and West End Avenue.
The revolution in publishing infrastructure - presses to electrons - means that any niche can be targeted. There are very few barriers to entry for the would be publisher since the cost of a hosted Word Press account and plenty of bandwidth is in the low double digits dollars per month instead of the 100s of thousands or millions it would take to get a printing press and truck distribution network up and running.
And if, as an advertiser, you can target – and track – your customers on a micro basis, the need for an expensive broadcast vehicle like your local paper just dissolves. Suddenly, where there was an inefficient (read: untrackable and unmeasurable) local paper with its heavy cost structures (press, paper, trucks, labor union) a thousand targeted blogs are on the scene. Supply of ad space grows massively while ad demand stays the same or – by the removal of inefficiences – declines. Poof – there goes an industry. I would guess that a large part of why newspapers and printed magazines still have as much revenue as they do is that because the marketing and advertising industry is still in its infancy of learning how to actually make use of – and manage their spending on – the newly available targeted sites. But learn they will so the trend here is both obvious and inexorable.
Of course, the need for journalism still exists but society has no real intrinsic need for printed papers. Now journalism needs to find a new entity to subsidize it. It’s hard to predict where that will come from? Will it come from friendly billionaires like Gates, Buffet and Soros?
Shirky dissects it all far better than I ever could and compares our current situation to the revolution that happened when Gutenberg invented the printing press. Now as then, it’s almost certainly impossible to predict what the future will look like other than to know that many things will be tried, many of them won’t work and that the future will look different than the world we have known.
Here is a portion of Shirky’s brilliant essay which is a must read:
If you want to know why newspapers are in such trouble, the most salient fact is this: Printing presses are terrifically expensive to set up and to run. This bit of economics, normal since Gutenberg, limits competition while creating positive returns to scale for the press owner, a happy pair of economic effects that feed on each other. In a notional town with two perfectly balanced newspapers, one paper would eventually generate some small advantage — a breaking story, a key interview — at which point both advertisers and readers would come to prefer it, however slightly… This would increase its dominance, which would further deepen those preferences, repeat chorus…
For a long time, longer than anyone in the newspaper business has been alive in fact, print journalism has been intertwined with these economics. The expense of printing created an environment where Wal-Mart was willing to subsidize the Baghdad bureau. This wasn’t because of any deep link between advertising and reporting, nor was it about any real desire on the part of Wal-Mart to have their marketing budget go to international correspondents. It was just an accident. Advertisers had little choice other than to have their money used that way, since they didn’t really have any other vehicle for display ads…
That the relationship between advertisers, publishers, and journalists has been ratified by a century of cultural practice doesn’t make it any less accidental.
The competition-deflecting effects of printing cost got destroyed by the internet, where everyone pays for the infrastructure, and then everyone gets to use it. And when Wal-Mart, and the local Maytag dealer, and the law firm hiring a secretary, and that kid down the block selling his bike, were all able to use that infrastructure to get out of their old relationship with the publisher, they did. They’d never really signed up to fund the Baghdad bureau anyway.
