Why the iPad can’t save newspapers
Spoiler alert: It’s a revenue model issue, specifically, print advertising versus online advertising.
Some have noted that it could make sense, from the perspective of circulation economics, to induce newspaper readers to switch from print to iPad. That well may be true: The savings on circulation marketing, printing, and delivery costs would be significant. Such inducements could take the form of discounts on iPad purchases. The Times has actually experimented with an analogous program using Times Reader and a Samsung netbook, offering $100 off the hardware to new non-print subscribers to the software.
But newspaper economics are not limited to circulation economics. In fact, most newspaper revenue comes from advertising. And one of the most important realities about the state of newspapering these days is that online advertising revenue, on a per reader or per impression or any other relevant basis, lags so far behind print revenue that it seems destined to never catch up—never to come even close.
Thus, it has been clear, for perhaps three to five years, that any sudden conversion of all print readers to Web readers, while greatly reducing costs, would reduce revenue even more, deepening losses at unprofitable papers and throwing those that remain profitable into losses—losses that would likely be impossible to reverse except through huge further expense cuts, especially in newsrooms. The downward spiral in product quality would be accelerated, likely leading to fewer readers and more cuts.
And this is a pretty major stumbling block. Every time the otherwise quite insightful folks at Buzz Out Loud start in on how it’d be great if newspapers would just stop worrying about paper, they forget about advertising, causing me to yell at my car stereo while I’m driving.
(From The Daily Beast, which I’ve somehow managed to avoid stumbling across until now.)
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