June 17, 2014
Newspapers Need A New Enemy to Blame
For years now, people have heard that the Internet is the murderer of the traditional newspaper. And for years, most of us have accepted that as the use and popularity of the World Wide Web has grown. The convenience that the Internet provides is one of the reasons people love it so much. This convenience is available in news as well, which has lead to traditional newspapers blaming the Internet for their demise. As newspaper after newspaper stops publishing print copies of their news stories, the Internet gets more and more blame.
However, The University of Chicago Booth School of Business has recently found that the Internet is not solely responsible for the death of the newspaper. In fact, the study conducted by Booth School of Business Professor Matthew Gentzkow found that print newspaper reading started declining in the 1980s, well before the general popularity of the Internet. That decline has continued to drop at roughly the same rate since it started between 1980-1995.
Furthermore, Gentzkow’s research identified three assumptions that are based on false premises. According to the University of Chicago article, “the first fallacy is that online advertising revenues are naturally lower than print revenues, so traditional media must adopt a less profitable business model that cannot support paying real reporters. The second is that the web has made the advertising market more competitive, which has driven down rates and, in turn, revenues. The third misconception is that the Internet is responsible for the demise of the newspaper industry.”
Most specifically, he found that “the price of attention for similar consumers is actually higher online. In 2008, he calculates, newspapers earned $2.78 per hour of attention in print, and $3.79 per hour of attention online. By 2012, the price of attention in print had fallen to $1.57, while the price for attention online had increased to $4.24.”
Though the Internet may have played a role in what is happening to print newspapers, it is not the sole entity responsible. In fact, Gentzkow’s findings show that the online advertising revenues are actually higher. His findings further dispel the other two fallacies. To read his work, check out the study in the American Economic Review.
Perhaps it is not that the newspaper has died but rather that it is morphing into something new and different. Sure, I tend to prefer print books and magazines, so it would make sense that I would prefer newspapers, but really I prefer to read my news online. I like to jump around to different news sites to see different reporting based on biases and agendas or political or social views of the news sites. Plus, I do not have to wait for the news to update until the next printing because online news sites report immediately. Sure, this can be troublesome if the news sites do not do their research or publish some info before knowing the full story, but even print newspapers have a history of reporting information that later turns out to be wrong.
What I found most interesting in Gentzkow’s study is the fact that three of the newspapers’ reasons for blaming the Internet are fallacies. It is interesting to learn that what we have been told are the reasons for the slow demise of the traditional newspaper really are not logical reasons.
Instead of blaming the Internet for the alleged demise of the newspaper, newspapers should adapt and evolve based on what the internet has to offer. It is not easy to change, but it can happen. In fact, it already is happening. redOrbit clearly shows how news companies can grow with the internet and evolve as more technology becomes available.
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