3 ms·

To survive, newspapers need to create significantly more value for readers and advertisers to drive demand and revenue, and lower their cost structures to about

by mjfern 14y ago

To survive, newspapers need to create significantly more value for readers and advertisers to drive demand and revenue, and lower their cost structures to about 10% of their historical levels. Any incremental steps, from pay walls to moderate layoffs, are totally inadequate to turn their fortunes around. Let me explain. The value proposition of most newspapers for both readers and advertisers pales in comparison to many new media options. For instance, who here gets their technology or sports news from a national or local newspaper? Who looks to newspapers for the latest stock market performance, restaurant reviews, or movie showtimes? Since their value proposition is depressed, newspapers are attracting fewer readers (and subscription dollars) and, in turn, fewer advertising dollars. And then you have typical newspapers' unwieldy cost structures. Many newspapers are still operating with staff levels that are multiples greater than their new media counterparts. I don't have any current examples, but during the 2008 elections the Huffington Post was driving as much online traffic as the Washington Post, with a headcount of about 6.25% (50 employees versus 800). In short, lower value begets lower revenue, and if we assume a high cost structure, it's a downward spiral to oblivion.

WiseWeasel 14y ago
The Washington Post also does actual reporting, unlike the Huffington Post; they actually produce something of value, even if they don't monetize it as successfully.
- mjfern 14y ago
  > The Washington Post also does actual reporting... So does the Huffington Post, but many of the writers are unpaid contributors. > they actually produce something of value... Tell this to readers and advertisers, who are voting with their time and $.
  - brandnewlow 14y ago
    Nate Silver made a pretty good case that HuffPo bloggers don't contribute much to site traffic. http://fivethirtyeight.blogs.nytimes.com/2011/02/12/the-economics-of-blogging-and-the-huffington-post/ http://fivethirtyeight.blogs.nytimes.com/2011/02/12/the-econ... The implication is that the aggregated content lifted from other sites and the original content created by HuffPo writers gets 100x the traffic and eyeballs.
- prawn 14y ago
  Not like HuffPo has some secret monetisation strategy, do they? Aren't they running online ads like most other news sites? Could you have more accurately finished "even if most people don't care for content of value" or "even if they use more staff, resources and care to produce it"?
  - mjfern 14y ago
    Yes, similar monetization strategy but dramatically lower cost structure...and "value" in this case is subjective. By the way, I just looked at Google Trends and it now looks like HuffPo is driving 3-4x more traffic than WaPo. In 2008 it was much closer to parity.
- natrius 14y ago
  Tell that to HuffPo's Pulitzer. http://www.huffingtonpost.com/2012/04/16/huffington-post-pulitzer-prize-2012_n_1429169.html http://www.huffingtonpost.com/2012/04/16/huffington-post-pul... I mostly agree with your stance, but you've painted their entire body of work with the brush of their low-value, low-effort aggregation.
  - tokenadult 14y ago
    Even President Obama jokes about Huffington Post in relation to the Pulitzer prize, as he did in the most recent White House correspondents dinner. http://www.youtube.com/watch?v=2KI-2Ira91E http://www.youtube.com/watch?v=2KI-2Ira91E (Thirty-second video clip, with knowing laughter from the audience.)
    - davidwparker 14y ago
      This is the same president that was awarded the Nobel Peace prize... http://www.huffingtonpost.com/2009/10/09/obama-wins-nobel-peace-pr_n_314907.html http://www.huffingtonpost.com/2009/10/09/obama-wins-nobel-pe...
    - natrius 14y ago
      Such jokes are warranted and funny, but I don't think WiseWeasel was joking.
      - WiseWeasel 14y ago
        I wasn't; this is my serious face. I have yet to be impressed with the value of any of the content produced by HuffPo. In contrast, I regularly read Washington Post coverage, and the company has historically been involved in some of the major news stories that have shaped our society, such as Woodward and Berstein's Watergate Papers which they produced while working for the Washington Post. To this day, the company covers world events with reporters on the ground, with significant resources for them to leverage, and a relatively high level of journalistic integrity and editorial oversight, all brought to bear in order to bring us newsworthy stories with a solid reputation at stake. HuffPo might grow into a respectable news organization one day, but they still have a long road to get there.
- jonnathanson 14y ago
  Perhaps those activities are being bifurcated, then. Perhaps the future of journalism looks like this: on one hand, you have news/data sources, like AP, who put the boots on the ground, do the reporting, and license that information to a wide variety of news outlets. On the other hand, you have the news outlets, who buy the information and translate it into content. The supplier gathers news and sells it to the publisher, who adds value to the raw news in the form of X, Y, Z, and sells ads around it. It's an industrial supply chain, like any other. This has been happening for many decades now, especially in the TV news industry. If anything, I would expect the trend to accelerate and proliferate. It's going to become increasingly unprofitable to house the costs of news-gathering, and the revenue of ad-selling, under the same roof. A few outlets will keep at it, but on a much smaller and more selective scale, and mainly for specialized stories (investigative pieces, like the ones HuffPo does on occasion).
gizzlon 14y ago
"For instance, who here gets their technology or sports news from a national or local newspaper? Who looks to newspapers for the latest stock market performance, restaurant reviews, or movie showtimes?" Guess that question was rhetorical, but I'm going to answer it anyway: I do! (well, maybe not movie showtimes) There are many reasons I prefer an old-school newspaper for some things: - I already spend every waking hour looking at screens, paper is a nice break. Paper has some nice qualities too. - Easier to read on a crowded subway than a pad [1], no need to charge them, lighter, I throw it away when I'm finished with it so I don't have to carry it around all day - I hate most online newspapers: 80% adds, shitty design, seems to emphasise short stories to drive page views. - Sometimes it's important that the news a "fresh", and of course on-line wins there. But more often, the stuff I read does not suffer much from being a few hours old [2]. 1 - I suspect.. they might be bigger but they are also soft and "bendable", and they don't break when that guy with the huge backpack turns and smashes it into you. 2 - Here in Scandinavia online news became popular early, and the newspapers have had more time to adapt to the threat/opportunity. I suspect this affects what they put in the paper editions. (edit: formatting)
- dredmorbius 14y ago
  Just a quibble: the news:ad ratio for most print papers also runs about 20:80. There are exceptions for some subscription/newstand-sales driven publications (The Economist, the WSJ pre-Murdoch), but that's been a pretty solid rule of thumb for the past 30-40 years or more.

by mjfern 14y ago

WiseWeasel 14y ago

The Washington Post also does actual reporting, unlike the Huffington Post; they actually produce something of value, even if they don't monetize it as successfully.

mjfern 14y ago
> The Washington Post also does actual reporting... So does the Huffington Post, but many of the writers are unpaid contributors. > they actually produce something of value... Tell this to readers and advertisers, who are voting with their time and $.
- brandnewlow 14y ago
  Nate Silver made a pretty good case that HuffPo bloggers don't contribute much to site traffic. http://fivethirtyeight.blogs.nytimes.com/2011/02/12/the-economics-of-blogging-and-the-huffington-post/ http://fivethirtyeight.blogs.nytimes.com/2011/02/12/the-econ... The implication is that the aggregated content lifted from other sites and the original content created by HuffPo writers gets 100x the traffic and eyeballs.
prawn 14y ago
Not like HuffPo has some secret monetisation strategy, do they? Aren't they running online ads like most other news sites? Could you have more accurately finished "even if most people don't care for content of value" or "even if they use more staff, resources and care to produce it"?
- mjfern 14y ago
  Yes, similar monetization strategy but dramatically lower cost structure...and "value" in this case is subjective. By the way, I just looked at Google Trends and it now looks like HuffPo is driving 3-4x more traffic than WaPo. In 2008 it was much closer to parity.
natrius 14y ago
Tell that to HuffPo's Pulitzer. http://www.huffingtonpost.com/2012/04/16/huffington-post-pulitzer-prize-2012_n_1429169.html http://www.huffingtonpost.com/2012/04/16/huffington-post-pul... I mostly agree with your stance, but you've painted their entire body of work with the brush of their low-value, low-effort aggregation.
- tokenadult 14y ago
  Even President Obama jokes about Huffington Post in relation to the Pulitzer prize, as he did in the most recent White House correspondents dinner. http://www.youtube.com/watch?v=2KI-2Ira91E http://www.youtube.com/watch?v=2KI-2Ira91E (Thirty-second video clip, with knowing laughter from the audience.)
  - davidwparker 14y ago
    This is the same president that was awarded the Nobel Peace prize... http://www.huffingtonpost.com/2009/10/09/obama-wins-nobel-peace-pr_n_314907.html http://www.huffingtonpost.com/2009/10/09/obama-wins-nobel-pe...
  - natrius 14y ago
    Such jokes are warranted and funny, but I don't think WiseWeasel was joking.
    - WiseWeasel 14y ago
      I wasn't; this is my serious face. I have yet to be impressed with the value of any of the content produced by HuffPo. In contrast, I regularly read Washington Post coverage, and the company has historically been involved in some of the major news stories that have shaped our society, such as Woodward and Berstein's Watergate Papers which they produced while working for the Washington Post. To this day, the company covers world events with reporters on the ground, with significant resources for them to leverage, and a relatively high level of journalistic integrity and editorial oversight, all brought to bear in order to bring us newsworthy stories with a solid reputation at stake. HuffPo might grow into a respectable news organization one day, but they still have a long road to get there.
jonnathanson 14y ago
Perhaps those activities are being bifurcated, then. Perhaps the future of journalism looks like this: on one hand, you have news/data sources, like AP, who put the boots on the ground, do the reporting, and license that information to a wide variety of news outlets. On the other hand, you have the news outlets, who buy the information and translate it into content. The supplier gathers news and sells it to the publisher, who adds value to the raw news in the form of X, Y, Z, and sells ads around it. It's an industrial supply chain, like any other. This has been happening for many decades now, especially in the TV news industry. If anything, I would expect the trend to accelerate and proliferate. It's going to become increasingly unprofitable to house the costs of news-gathering, and the revenue of ad-selling, under the same roof. A few outlets will keep at it, but on a much smaller and more selective scale, and mainly for specialized stories (investigative pieces, like the ones HuffPo does on occasion).

gizzlon 14y ago

"For instance, who here gets their technology or sports news from a national or local newspaper? Who looks to newspapers for the latest stock market performance, restaurant reviews, or movie showtimes?" Guess that question was rhetorical, but I'm going to answer it anyway: I do! (well, maybe not movie showtimes) There are many reasons I prefer an old-school newspaper for some things: - I already spend every waking hour looking at screens, paper is a nice break. Paper has some nice qualities too. - Easier to read on a crowded subway than a pad [1], no need to charge them, lighter, I throw it away when I'm finished with it so I don't have to carry it around all day - I hate most online newspapers: 80% adds, shitty design, seems to emphasise short stories to drive page views. - Sometimes it's important that the news a "fresh", and of course on-line wins there. But more often, the stuff I read does not suffer much from being a few hours old [2]. 1 - I suspect.. they might be bigger but they are also soft and "bendable", and they don't break when that guy with the huge backpack turns and smashes it into you. 2 - Here in Scandinavia online news became popular early, and the newspapers have had more time to adapt to the threat/opportunity. I suspect this affects what they put in the paper editions. (edit: formatting)

dredmorbius 14y ago
Just a quibble: the news:ad ratio for most print papers also runs about 20:80. There are exceptions for some subscription/newstand-sales driven publications (The Economist, the WSJ pre-Murdoch), but that's been a pretty solid rule of thumb for the past 30-40 years or more.