3 ms·

Not debating your point, but how come in the old days media outlets were able to become profitable when they had (have) both union costs, and costs related to a

Not debating your point, but how come in the old days media outlets were able to become profitable when they had (have) both union costs, and costs related to actually printing and distributing a physical good?

symkat 10y ago
Probably because people actually paid for media at the time?
- joshu 10y ago
  Nope. For newspapers, at least, this accounted for maybe 20% of revenue. The remainder was ads and classifieds. Everybody is in trouble.
- loudandskittish 10y ago
  But people paying for a newspaper barely covered the cost of printing it, and even then, plenty were taking losses on the cover price.
  - superuser2 10y ago
    The newspaper was the primary way to get ads into the home. Each city paper had a Google-like position in that city's ad market. Quality could be higher because ad reach was based in part on subscriber count, not just the attention-grabby-ness of particular headlines.
chongli 10y ago
Two words: classified ads.
- danso 10y ago
  Yeah, this. I know Craigslist feels like an entire era ago, but at its peak, it ate up 25% of industry revenues. Media companies were definitely slow on the existential uptake, but I think a lot of industries would have a problem with a 25 percent drop in revenue over 5 years. And that was just one of the problems that media companies had to track. It'd didn't help that newspapers were just exiting a period of golden complacency in which cities were monopolized by a single newspaper. If you wanted to print an obituary notice for your mom in tiny font in a 4 inch space, you paid $500 because what the hell else were you going to do?. When I was in college one of our professors told us that running a newspaper was like running a printing press that printed money. And he was right. The problem with newspaper companies was that they didn't reinvest enough profit into innovation and experimentation.
  - PeterisP 10y ago
    On the contrary, I believe that newspaper companies were correct when they didn't reinvest most of the money into innovation and experimentation. Experimentation and investments would have allowed an average newspaper to become (also) a platform like Mode Media, ultimately a waste of money and also wouldn't change the fact that the whole industry is losing profitability - but taking the profit out was obviously useful to the shareholders. Most companies exist to make money for their owners. Often the best way to do that is to grow and reinvest into more growth, but there certainly are cases where the best option is to milk an existing revenue stream dry and squeeze until it runs out, and place all that money in an entirely different industry - IMHO newspapers a decade ago is a prime example of that situation.

symkat 10y ago

Probably because people actually paid for media at the time?

joshu 10y ago
Nope. For newspapers, at least, this accounted for maybe 20% of revenue. The remainder was ads and classifieds. Everybody is in trouble.
loudandskittish 10y ago
But people paying for a newspaper barely covered the cost of printing it, and even then, plenty were taking losses on the cover price.
- superuser2 10y ago
  The newspaper was the primary way to get ads into the home. Each city paper had a Google-like position in that city's ad market. Quality could be higher because ad reach was based in part on subscriber count, not just the attention-grabby-ness of particular headlines.

chongli 10y ago

Two words: classified ads.

danso 10y ago
Yeah, this. I know Craigslist feels like an entire era ago, but at its peak, it ate up 25% of industry revenues. Media companies were definitely slow on the existential uptake, but I think a lot of industries would have a problem with a 25 percent drop in revenue over 5 years. And that was just one of the problems that media companies had to track. It'd didn't help that newspapers were just exiting a period of golden complacency in which cities were monopolized by a single newspaper. If you wanted to print an obituary notice for your mom in tiny font in a 4 inch space, you paid $500 because what the hell else were you going to do?. When I was in college one of our professors told us that running a newspaper was like running a printing press that printed money. And he was right. The problem with newspaper companies was that they didn't reinvest enough profit into innovation and experimentation.
- PeterisP 10y ago
  On the contrary, I believe that newspaper companies were correct when they didn't reinvest most of the money into innovation and experimentation. Experimentation and investments would have allowed an average newspaper to become (also) a platform like Mode Media, ultimately a waste of money and also wouldn't change the fact that the whole industry is losing profitability - but taking the profit out was obviously useful to the shareholders. Most companies exist to make money for their owners. Often the best way to do that is to grow and reinvest into more growth, but there certainly are cases where the best option is to milk an existing revenue stream dry and squeeze until it runs out, and place all that money in an entirely different industry - IMHO newspapers a decade ago is a prime example of that situation.