It shouldn’t be news to anyone that the newspaper industry isn’t doing well. The cost of producing a newspaper far exceeds the cost it is sold for and the real money is earned in advertisements and classified listing services. As the internet has
continued to grow and expand sites such as Craigslist.com have provided the same listing services for free and thus the money earning opportunities have dwindled for newspapers.
In addition, because the internet is based on the open sharing of information, newspapers have failed to bring their businesses online in a cost effective manner. Forcing customers to pay online subscriptions has failed and online advertising is continually decreasing in value. The industry has failed to keep up with the changing times and newspapers around the country are bleeding money and beginning to close.
All of this has sparked recent discussion and debate about a potential newspaper bailout which culminated in the Newspaper Revitalization Act which was introduced a couple of weeks ago by Senator Ben Cardin (D-Md).The Act, as described in Tech Crunch,
“allows newspapers to operate as nonprofits for educational purposes under the U.S. taxcode, and thus receive the same tax-benefits as a non-profit organization.Revenue from advertising and subscription would be tax exempt, and contributions to support news coverage or operations could be tax deductible.”
The Act is getting some heat for its restriction prohibiting newspapers from endorsing political candidates, but I think the bigger problem is that it would halt innovation in an industry that is desperately in need of it. Newspapers have been failing for the last 5 years and they haven’t quite figured out that they need to change something drastically in order to survive. A bailout from the government will only prolong their slow death and hinder true forward motion.
I don’t have the answer to how the newspaper industry can have all their problems solved, but I am sure if a couple more fail, people will start to get antsy and the brain-juice will start flowing. Scott Kirsner shared on HubSpot.tv, that he thinks newspapers need to reach out to the local businesses that have supported them in the past, to find out how the newspapers could better support them. It’s not a novel idea to ask your customers what you can do to give them better service, make them happier and then jack up the rates, but I don't think it's something the newspapers have tried yet.
Another idea might already be in the works between Google and the New York Times. Newspapers have fantastic data about what people are reading they just haven’t put that data to use to serve better targeted ads. If there is any company in the position to help them do so, and supply the infrastructure to do so, it’s Google.
Newspapers provide a valuable service to the country by keeping us all informed. I agree it would be tragic to see the industry bite the dust, however I also think it would also be tragic to miss this opportunity to embrace innovation and instead provide a crutch to a failing industry.
*Photo Credit: Lakewentworth on Flickr