A general theory, one that seems to be at the gist of this CJR piece, is that newspaper executives missed the boat by only belatedly trying to duplicate old-style efforts in a new medium, instead of understanding and quickly mastering revenue generation in the new Information Age. This is intriguing, but I'm not sure it would have saved the papers (or kept them at traditional profit levels).
A lot of interesting parallels have been discussed (online, in newspapers, ironically), such as Hollywood first feeling threatened by VCRs, then accepting them, and then making fortunes off of movie sales on tape. People like Shawn Fanning and Steve Jobs, and billions of music fans around the world, saw the same problems with the music industry. The world changed, these people said (correctly), and the recording industry failed to grasp it.
Jobs said very publicly that DRM was unnecessary, and that the industry is harming itself by not moving forward, and into, the digital world. Something amazing happened after Jobs and others finally convinced a stodgy old industry to embrace a new reality:
- Apple iTunes, including iBook store and AppStore, is expected to grow at a rate of about 39 percent over the next 3 years and may contribute about $13 billion in revenues in fiscal 2013, according to an analyst at Global Equities Research.
- In the fall of 1994, Mosaic Communications, a startup in nearby Mountain View, had introduced software that could shift users away from the narrow confines of their online providers and begin navigating their way through a source of information and communication that had previously been accessible only to a handful of university-based technologists: the World Wide Web. They named the browser Netscape. When Barry Parr showed Kathy Yates how it worked, her doubts about the potential of the digital world evaporated. No longer would Mercury Center be limited by its partnership with AOL. Instead, the Merc could become a portal to a world with seemingly limitless possibilities.
One aspect of the newspaper problem is that people, like reporters, complain that giving the product away for free is at the heart of the problem. This may be true, but it's hard to be sure. On the one hand, why would I pay for a newspaper when I can get one free? And, why would I try to sell my car in a newspaper's classified section, when I can do it free on Craigslist? Why would I look for new employees in a newspaper, when I can use online services?
In a way, I think newspapers were stuck. Several went all in -- everything free online. These were popular, of course, and the ones that hadn't gone online in the 1990s or were trying to charge customers, were far less popular (with some exceptions, like WSJ). They felt they had to do as everyone else was doing.
This free-for-all attitude has a parallel with public funding of sports stadiums. One city, at some point in the past -- and I'd like to know which one screwed this up for everybody -- was convinced by the owner of a sports team that putting public money into a new stadium was a good idea. Other cities followed, and now it's the standard. Today teams openly bully cities. "Build a stadium or we'll go to a city that is willing." Can you imagine if the precedent had never been set? Teams would have no leverage to leave, and they'd still be playing, and we'd still be watching, and the money would still be rolling in for everyone involved -- and city budgets would be closer to being balanced.
Maybe newspapers should bully cities into massive subsidies. Can papers threaten to leave town?