Tuesday, August 25, 2009

Good Article from The Deal about the Finances of Newspapers

"Black and white and red all over," which appeared in The Deal, offers an interesting look at the financial problems affecting the newspaper sector.

One of the points the article makes is that newspapers used to cost $0.05 in 1908, or about $2.67 today -- that's still more than most daily papers charge. (Sunday's editions are often more expensive.) The reason: publishers dropped the price to boost circulation to be able to increase the fees they charge advertisers.

(As faithful readers of this blog know, the U.S. has had an advertising-driven newspaper and magazine sector, meaning that print media (with exceptions like Consumer Reports) are generally advertising supported. Without the advertising, it doesn't matter how large the circulation.)

One suggestion in the article for improving the profitability of newspapers is to increase subscription costs. Another is to print only a Sunday edition while maintaining a 24/7 website. Doing so would reduce the costs by as much as 60%, the article claims.

Yet, the article says newspapers won't be able to make the transition to paying readership for their websites.

So we're still left with the question: how do you make online content pay. But The Deal's article is worth checking out.

No comments: