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Anorak | Why Newspapers Are Screwed: Indy And Guardian In Fight To The Death

Why Newspapers Are Screwed: Indy And Guardian In Fight To The Death

by | 12th, July 2011

NO, it’s not just this latest News of The World stuff. Nor is it that the world has a limit to the number of earnest left wing screeds it can stomach: meaning that either the Guardian or Indy is going to have to go.

It’s not even that we all read the newspapers online now, meaning that there’s getting to be no point at all in printing them.

No, there’s an underlying economic reason why the newspaper as a whole is screwed.

Classifieds.

Note that it’s the local newspapers that are dying, dying faster than the nationals. And the profit centre of a local newspaper was always the classifieds section. That’s what kept the whole show on the road. Flats to rent (now on Gumtree perhaps), jobs available (umm, Monster?), cars for sale (Autotrader).

The newspaper always was an odd beast. The price you paid for it really only ever covered the cost of printing it and delivering it to you. It most certainly did not cover the cost of writing it. That was covered by whatever advertising they could get. The display advertising: well, it didn’t take the first newspaper owners long to realise that they were actually employing journalists to fill in the white spaces between the ads. What they filled it with was vaguely important but that it had to be filled was the first and most important point.

And the profit, the real moolah, came from the network effect of running the local classifieds monopoly. And when all those moved online, the newspaper, as that strange beast a bundle of this and that, was dead. They’ve just not stopped moving yet, that’s all.



Posted: 12th, July 2011 | In: Money Comments (45) | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink