Singularity Law

The newspaper industry is suffering. At least one newspaper is closing down each week in the United States, and this trend is likely to continue unless the industry makes some radical changes in their way of thinking. Unfortunately, those who control most of the newspapers in the United States just don’t get it. These publishers seem to think that all of their problems are due to the Internet, and in particular to Google.

Rupert Murdock, head of News Corp., and Dean Singleton, chairman of the Associated Press, have both singled out Google, claiming that Google is “misappropriating” their news. They claim that Google should be forced to pay to link to the news articles that they already post online – for free. Or, in the alternative, or perhaps in addition, they want to charge Internet users for access to that news.

What they don’t seem to realize is that news is NOT the issue. Instead, the problem with newspapers is that the Internet is a much better place for most advertisers than print publications. It is the loss of advertisers that is killing newspapers, not Google.

It is Craigslist, and eBay, and a thousand other online services that have siphoned off newspapers’ classified ad revenues. Once viewed as one of the most lucrative revenue generators, classified ad sections today are a shadow of their former selves. Those advertising dollars have moved online.

The same is true for display ads. For Macy’s to advertise a nationwide sale, it must either pay local newspapers in every geographic region in which it has stores to run multi-page ads (at enormous expense), or it can spend a fraction of that money to place those same ads on its own website, as well as mounting an effective email marketing campaign directly to its customers. It’s no wonder that the big, fat Sunday newspapers of yesteryear are now about the size of a Tuesday edition.

Newsstand and subscription revenues don’t ever cover the costs of distributing newspapers, let alone the costs of an editorial staff. No matter what Google does, if newspapers can’t attract and maintain advertisers, they are doomed.