The Present was Written in the Past


There is a lot of stuff being written about the decline of the news business right now. Most of it is very unoriginal, repeating the same points about the same issues, and  most of it is a year late  — all of these are themselves probably signs of what is wrong with the business. I’m as guilty of anyone else of casting about, somewhat helplessly, for answers to questions that have no obvious solution. But here’s something original and valuable, from (no surprise here) the FT:

“One inescapable conclusion of our study is that our cost base is significantly out of line with the revenue available in our business today,” Mr Swartz told his staff: “It is equally inescapable that during good times our industry developed business practices that were at best inefficient.”

What is in play here is not the future of democracy, or about fixing a business model, or about coming up with new ownership schemes. It is about an industry that has been mugged by reality. 

More reality here about the non-starter that is micropayments, and here about the non-starter that is a news cartel.

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The Present was Written in the Past

  1. Andrew, i think I have become convinced that a levy (similar to our cable payments) on our internet is one of the ways to address this. I have no clue how to DISTRIBUTE the money. That seems to me to be the sticking point. I am actually terrified now that I will lose that daily newspaper. But for the levy to work, it has to be beyond what most people are willing to pay (for example, i would happily pay 2 or 3 bucks a month, but that would only be about $60 million a month for all of canada at most)

    I am sure there are other things, some of which I see CanWest trying (like, does every paper in Canada need a TV columnist or a movie reviewer? Or someone to review cars or do recipes?)

    I am curious to know what impact Craigslist has had on newspaper revenue.

    • I still believe an ISP levy is the way to address this — not just for news, but for all media including movies and music. The best book on this is Promises to Keep by William Fisher; it’s the book that persuaded me that it was the most workable model for dealing with content in a digital age. Basically, the model is the same one that applies to radio now: Stations pay into a central collection agency that then distributes the cash to copyright holders on the basis of airplay. Micropayments, pace Coyne, is a non-starter.

      Note though, that Coyne also believes that the ISP system I advocate is a form of cartel, or at least that is my impression. AC, if you are out there want to weigh in?

      • The cartel aspect would be interesting to look at. For example, if an online paper like the Tyee springs up, do they receive funding?

    • And as for Craigslist, the impact has been significant but not deadly. A paper’s ad revenues break down about 40 percent national ads, 35 percent local, 25 percent classified. The major problem has been circulation erosion.

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