Sunday, March 30, 2008
The Newspaper Business Model is Broken
Some would think me crazy for getting into publishing business, especially one that relies completely on advertising revenue when we continue to read news and blogs about the financial tragedy facing many newspapers. Perhaps that is why I didn't start a newspaper. (grin) Sure, my original concept was to start a newspaper but I wanted something more, something different and frankly, something that had a chance of success without investing millions of dollars. I have a million ideas how to make a newspaper work, but then I keep reading stories about how subscriptions are down and advertiser dollars are evaporating.
Stories like:
Newspapers' ad spending off 10% in fourth quarter
Improved outlays for online ads can't compensate for weak classified
CHICAGO (MarketWatch) -- Advertising expenditures at newspapers and their online editions fell 10% in the fourth quarter despite a sharp increase in online ad buys, suggesting that the industry remains troubled by a shift away from print readership and a sputtering U.S. economy.
Ad spending at newspapers and their Web sites totaled $12.6 billion in the December quarter, compared with $14 billion in the final three months of 2006, the Newspaper Association of America said Friday.
I've always suspected that the Achilles heel of newspapers was the classifieds. I could count the words, inches and number of paid ads and see that it is a huge base of revenue for a newspaper. Display ads are important, but I've always thought that the daily classifieds are what keep the lights on. I've watched sites like www.craigslist.org offer free classified and wondered how it was affecting the bottom line of newspapers.
I also read blogs about the newspaper business and one called Reflections of a Newsosaur is on my short list of favorites. His most recent post (at the time of this one), suggests that the trials facing daily newspapers will continue into the next year and beyond.
Newspaper revenue crisis mounts
After suffering the worst sales decline in nearly 60 years in 2007, American newspapers could be heading to an even deeper drop in 2008, based on the industry's performance in the early months of this year.
If sales continue deteriorating at the same dismaying rate for the balance of the year, the resulting revenue crisis will threaten the economic viability of the financially weakest and most debt-ridden newspapers – and the journalistic mission of nearly all of them.
Slammed by the unprecedented collapse of every major advertising category, American newspapers in 2007 recorded their worst sales decline in modern history, as print revenues fell 9.4% to $42.2 billion (vs. a forecast here last fall of $42.7 billion).http://newsosaur.blogspot.com/2008/03/newspaper-revenue-crisis-mounts.html
When I considered getting into the publishing business, I read anything I could get my hands on about the business. I came to a number of conclusions; but without revealing too much, let me just say that I knew that I had to do things differently if I wanted to experience any amount of success. I am fortunate in that the publishing business is new to me and I am not entrenched in old methods or ways of doing things. I created my own model based on what I felt would be interesting to me, and others.
I have a billion ideas about how to "fix" a newspaper. I have written many of them down and then thrown them away because there is little chance I would ever be in a situation where I could implement them. In my opinion, the standard newspaper business model is broken. In order to reverse the trends, I believe that the newspaper business model needs to be reinvented from the ground up. It would mean changes that the "old dogs" would refuse to make and because of that, I believe you will see a different kind of model emerge, overtake and replace what we call a newspaper today.
The newspaper is not going anywhere for a long time! There will be a need for a daily newspaper for at least as long as I live. The question is, what will it look like in 50 years when my time is through? Look at a newspaper printed 50 years ago, then look at one printed today. They are very similar. And that is exactly my point.
For the locals who may be reading... I am not writing about any particular newspaper! I am writing about the newspaper business in general. For first time readers, I publish a monthly events guide and have nothing to do with the newspaper business per se. It is of interest, but not anything I am involved in.
Saturday, March 29, 2008
Small Business Trends : Veterans Catch a Break
In the past five years many thousands of U.S. men and women have left their homes, their families and their careers to serve and protect our country.Now as they return home the old job may not have the same appeal. Or they may simply be ready to transition to civilian life and the next stage of their careers.
The SBA, through nearly 800 lending institutions across the country, has developed a program to encourage and support our service men and women in their entrepreneurial dreams.
http://www.smallbiztrends.com/2008/03/100-million-loaned-to-us-veteran-entrepreneurs.html/
