The Future of Newspapers

Newspapers discover creative destruction:

There's no question the industry has been subjected to a great deal of competitive pressure over the past decade or so, with promises of more to come as the Internet and wireless technology transform the way Americans receive news and information. And newspaper companies have struggled with how to handle these changes to their readers' habits and their revenue models. Those of us who preach the benefits of creative destruction for everyone else are now getting to live the experience, and it isn't always fun.

Gathering news, reporting stories and making editorial decisions about what is important and of interest to readers--these are the core competencies of newspapers. And the Internet hasn't changed those jobs at their fundamental level. Both the skills required to do them well and the newspaper brands with reputations for integrity remain valuable in the information marketplace. The news aggregators, such as Google News, are just that--collectors of other companies' news products. Without news outlets to generate the material that Google searches and collates, there is no Google News.

... there are more media outlets than ever, but they are increasingly echoing each other. In this environment, the echoers will likely find it ever harder to pay their way when others are willing to offer the echo free.

Good and factual reporting and independent commentary of the kind you can't get elsewhere is where the successful journalistic outlets will create value in the future, as they have in the past. The trick will be adapting old journalism standards to the new opportunities that technology offers.

My take: The same adage that applies to any other business is true in the newspaper business. To continue the business, you have to innovate or die. Competitive pressure leads to innovation and in a very real way, the rise of the internet has forced formerly local papers to compete with one another nationwide. I do think some of the local outlets will stay in business, but in a new way than before. Same is true for national outlets.

This article correctly notes that newspapers have comparative advantage in "gathering news, reporting stories and making editorial decisions". However, they now face competition in these areas in the form of blogs that challenge all three of these issues, forcing newspapers to become more innovative and open to non-traditional stories. My guess is that newspapers will probably start working more closely with blogs in the future and certainly maintain a better awareness of them and what they publish. (See more of my thoughts on these issues here.

While it may be sad to see some of the old newspapers go out of business and others change from what they used to be, it is also very exciting to see what new ideas and services will emerge from the fray. There is no way to predict what will be coming next, but we do know it will be better. That's what makes it both exciting and fun! Creative destruction at its best!