Disintermediation in Reverse – Can online Newspapers be commoditized?
July 9, 2008
First of all. If you are reading this without reading the other two posts in the series. Please go back and read them. They are here and here.
With that accomplsihed, here is where I am coming from. Online newspapers have reduced themselves (due to competitive pressure) to essentially an interactive blog and maybe a forum mixed in powered by a national newsfeed. The VALUE ADD that they provide is local journalists adding color and commentary on local news and local events. They charge for this by selling ads to local businesses. How is that different than this? (It is just a shell at the time of this writing…)
Looking that business model over for a second, why would a professional services provider like a mortage broker, or real estate agent or other service professional be interested in BECOMING the online newspaper or in participating in a group set out to do the same? Why wouldn’t they become the OWNER of said online newspaper rather than RENT it from others? The links that this site builds and the online authority it creates are THEIRS.
Because the margin could be NICE…and the barriers to entry have shrunk to where it CAN be done. That’s why.
“Never pick a fight with a guy who buys ink by the barrel.”
Yes that’s true. But why not SUPPLANT them?
They are still inherently inefficient since they still have full time “reporters” and “editors” and much of the cost structure associated with them. Most of them (to save development costs) have outsourced their classifieds sections and other sections of their online “paper” to other entities or groups, who derive their income from charging readers and charging for ads as well.
The bottom line. Bloggers (by and large) fact check just as well as regular reporters and their biases are typically disclosed anyway. That is not saying that bloggers are anywhere near par. It is saying that traditional MSM has gotten very lax in this regard.
RADICALLY SIMPLIFIED VERSION OF MY BUSINESS MODEL
What I have put together in Southern Indiana is a SMALL BUSINESS NEWS COOPERATIVE. We will happily have local journalism students contribute stories in exchange for a piece of our monthly advertising take. Regular contributors also get journalism experience that they can take into the industry.Small businesses can be listed in our service directory for a small annual fee. Ads on the front page are a bit more and are monthly.
There are a ton more details about HOW this works, but time and space limit the full description of it.
The basic shell of what I am starting is already up. Much more work needs to be done including the addition of FREE classified advertising, a MODERATED forum, a business directory and a welcome guide. I have already partnered with several content providers and their stuff will be going up in the next couple of days.
HERE’s the COOL part. Do you live in a small town? Do they have a less than adequate online newspaper presence. Would you like to OWN rather than rent your online presence? Here’s your chance to get in without limited monetary investment (like $0!).
Give me a call. I will partner with you (if we are a good fit) and handle ALL of the technical details and help you get it set up and get you trained on how to add local news posts as well as advertisements. I will be a partner in every sense of the word. You recruit the writers and generate the content. We split the proceeds.
If you are interested in this concept, let me know. It is just one of many that I am willing to work on as a partnership with qualified individuals. Seriously. Give me a call for the full details.
Eric,
It is my understanding that in several major markets around the U.S. newspaper reporters are now being told to write for the website, the newspaper comes in 2nd. I think the Newspaper as we know is dead. It’s just a matter of time.
I would agree with that…I think the traffic numbers speak to that. The bottom line is though, that even if they get their writers focused on blogs, the cost structure that is inherently there is prohibitively high…at the same time bloggers who are skilled and can pull in traffic will likely try to monetize their investments of time.
Net result? Online papers and Blogger/Journalists will wind up meeting somewhere in the middle.
Solid writing skills are the key to success in this environment…that an copious quantities of Mt. Dew. (grin)
Eric, Interesting post. I see your in Southern Indiana… close to Louisville. I used to work for Gannett Inc. You probably have the privilege (or not) of getting a distribution of the Courier Journal. The publisher Arnold Garson came from the Sioux Falls Argus Leader, also a Gannett product. I used to work under Arnold Garson at the Argus Leader. Locals call it the Argus “Mis-Leader” or the Argus “Liar”. Not too many Sioux Falls people cared much for the Gannett beast. I really didn’t care too much at the time since it was my first job out of college. I was with the company for about 4 years and I left when the stock price was at about $90 a share.
Before I left Gannett, I visited corporate and I saw their new online cms global technology rollout called Publicus that was supposed to revolutionalize Gannett, online media, publishing, social networking, 2.0, blah blah blah. Pretty bad product if you ask me.
I could see the writing on the wall and with ad revenue shrinking and costs rising, it was only a matter of time before the empire fell.
It will be interesting to see where the newspaper industry ends up. I see a huge potential in small town online media, regions, niche pubs, industry related, etc. Local news is still a big thing for these smaller communities.
Hey Ryan!
I think you are spot on. I have a few local online news blogs as well as one industry related one that I am currently working / joint venturing on. Down the road a bit, feel free to contact me if you want to work together on some projects, collaborate , do some benchmarking or even stuff a little bigger than that.
Good to have you drop by my site!
best
Eric
And today… My old company eliminates 18 Argus Leader online media employees. Ganett just has to slash across the board.
Yep. Just saw this post on it…
http://www.nppa.org/news_and_events/news/2008/10/gannett_layoffs.html
looks like another big Gannett cut right after previous cuts in August. Seems to me that this is a growing trend as dead tree media circles the drain. (at least in its present form.
Hilarious! I about laughed when I saw all the layoffs. I dont’ feel good for the people in local markets that lost their jobs, but Gannett as a whole.
Look at my previous post about Publicus (their CMS system). That CMS system was made to do one thing. Eliminate jobs in local markets in the online departments as they wanted to keep all the tech jobs at corporate and getting the news departement to use the CMS system. Hence why I quit. I should have a website about it. Gannett is a interesting company.