Wednesday, April 1, 2009

The Internet Didn’t Kill Newspapers, Newspapers Killed Newspapers

Only a few short years ago, newspapers had a virtual lock on local news content, sports, lifestyle, classified advertising, and local retail display advertising. Many papers were “early” with local portals. They were also the top billing media entities in most local markets.

Fast forward to today. Many, if not most, papers are losing money. Bankruptcies are rampant. Century old dailies are being shut down. Revenues from most local papers’ Internet efforts are paltry.

Two things happened. Papers failed to control their costs (often by failing to deal effectively with their unions). And they failed to develop and implement effective Internet strategies. Remember when many tried to sell subscriptions to their Internet sites? Many failed to realize the simple truth that Internet content is free; ad supported models were the only way to go. Look what happened when most of the classified advertising migrated to Craigslist; gone, and never to return.

Newspapers had the opportunity to reinvent their sales forces and rethink their strategic direction. It didn’t happen. Are radio and TV broadcasters the next to make the same mistake?

News from the Internet Advertising Bureau points to a 10.6% growth in ‘net revenue last year. $23.4 billion in revenue placed the Internet ahead of radio and cable TV, and rapidly gaining on local TV and newspapers.

Newspapers killed newspapers; the Internet could have been the salvation instead of simply the beneficiary. SNL Kagan predicts Radio/TV revenue declines for at least the next five years in a new report. Broadcasting’s leaders need to coalesce around an industry wide strategy to begin thinking like digital businesses with big, local loudspeakers. How about adding this as an agenda item at the next NAB Board meeting?

Those are my thoughts. What are yours?

George