Newspapers used to be a large and prosperous industry, not just in the US, but pretty much everywhere. Now it’s in severe decline and this deep recession may destroy the industry completely. It will reduce the industry to a few titles that eke out their existence through the subsidy of some indulging multi-billionaire or conglomerate. Newspapers will become like rare animals that no longer exist in the wild, but are preserved in metropolitan zoos by generous donors.

Spot The Difference

Newspapers are businesses that lose money on a regular basis. If they didn’t get repeated injections of funds they wouldn’t exist. Social networks are businesses that lose money on a regular basis. If they didn’t get repeated injections of funds they wouldn’t exist. So what’s the difference?

The difference is that the number of social network users is growing dramatically and the number of newspaper users is declining.

You might object to this parallel by pointing out that: Facebook and Twitter are not in the business of news. Well wrong you are. Twitter is an excellent source of real-time news. Wait for any big news event (Hurricane in the Gulf, Plane in the Hudson) then go to Twitter to find out what’s going down. Facebook can act as a global “micro news” source. I found out that there was snow all over the UK and that my sister was snowed in through Facebook.

Oh and btw, both Reddit and Digg have millions of more readers than The New York Times, or USA Today.

Btw, btw, no newspaper has ever set up a successful social network. No-one in the publishing world has ever done that. As far as I know, no-one in the publishing world has even thought to do that.

Hold Your Horses

But wait a minute. Is that the sound of a bugle? And what’s that startled look of panic on the faces of the Indians, who are galloping round the circled wagon train and firing arrows at the journalists? The Cavalry is coming!

Yes. It’s none other than Walter Isaacson, a former editor of Time and he’s calling for newspapers to implement a strategy of micropayments on their Internet sites, so that people can pay for the well-researched-and-expensive-to-gather news that we all appreciate so much. And here is a link to his article, which sparkles with innovative ideas and commercial savvy,..not.

No, it isn’t the cavalry.

Here’s a set of explanatory bullet points that poor Walter really should read

• The cost of disseminating news has fallen and the commercial model of putting that information on paper and distributing it to houses and coffee shops is increasingly uneconomic. The cost of disseminating electronic news continues to fall every year as the Internet gets less expensive.
• Unfortunately there is no such thing as a newspaper on the web. Nobody goes to the web and reads the news from a single web site. A single web site, whether it thinks it’s a blog or a magazine, does not get read on a page-by-page basis. Readers come, read a single page and go. Some hang around, but not many.
• Readers do not arrive at these web sites by going to the NYTimes.com or any other news web site. They arrive through Google Search or Yahoo Search or via social network sites (Digg, Twitter, Facebook, etc.) or sometimes through bookmarks.
• Let me restate my point. THERE IS NO SUCH THING AS A NEWSPAPER ON THE WEB. There are NONE, NOT ONE, NOT ANY. If you count them all and add them up then the total comes to zero. On the web there are places where articles are posted. That’s all.
• If you ask the readers who pass through a web site to do anything that consumes any of their time, you had better have a good reason – otherwise they will go elsewhere. If you try to charge them and they can get something similar elsewhere on the web for free, then they will leave and not come back. One thing is for certain. THEY WILL NOT PAY FOR NEWS ARTICLES. Never. Not even if Hell freezes over and unicorns skate on the ice.
• Sites that specialize, those that focus in on a specific area, like how to get the best out of an iPhone. They, maybe, could charge for some specialized content but it had better be a) valuable and b) unique. Paying for news is a non-starter, because it is not a) valuable or b) unique.
• “If I ran the New York Times, Wall Street Journal, or Los Angeles Times, I would take the lead by creating my own digital coin purse or micropayment E-Z Pass and try to get other content creators to use it as well. Or I would work with a company such as Amazon, Pay Pal, Google, Apple, or Microsoft to partner in creating one. . . . The ideal micropayment system would be so easy to use that you’d hardly think about making an impulse purchase. . . ” says Walter
  
• Dear Walter, what makes you think that Amazon, Pay Pal, Google, Apple, or Microsoft would give this idea a second thought. Why not just contact Microsoft alone and ask them how successful the charging model they had for Slate was.

The zoo business model is the only one that works for newspapers. They can’t survive in the wild any more. The last few hardy ones among them will, sadly, be destroyed by this awful recession.