Saturday, May 30, 2009

The newspaper crisis

Unquestionably, we are not just in a financial crisis, but in a bunch of crisis. Among them, the newspaper crisis is representative for its close relationship to the rise of the Web. In fact, the newspaper crisis is inevitable disregarding the present financial crisis. The financial crisis accelerates and amplifies the newspaper crisis. It is, however, not the reason of the newspaper crisis.

The rise of the Web media causes the newspaper crisis. The young generation news readers are more and more customized to reading news online than on paper-printed media. The online news is not only "free" but also faster in update and more comprehensive in analysis. The financial crisis became the last hay that crushed the old newspaper camel.

I am interested in the lessons we may have learned from this newspaper crisis. A successful business sector must have produced valuable asset for the society. The "valuable" means that the society members may and are willing to consume the produced asset. For many years, the newspaper business executes the goal very well.

In traditional, the newspapers produce three essential types of asset: breaking news, news analysis, and advertisement. In the pre-Web era, it was fairly costly to access the news sources. It was also fairly costly to write an insightful analysis of a news because few eligible news analysts might have enough supporting materials for them to produce the high-quality articles. And there were not many other ways besides newspapers for people to advertise their products or services. All of the facts added compelling values to the information asset produced by the newspapers.

The rise of the Web media, however, significantly decreases the value of the information asset we have just mentioned for the traditional newspapers. The cost to access the news sources becomes much cheaper; hence the newspapers can no longer charge their readers much by claiming unique news resources. All kinds of supporting materials for information analysis become freely accessible; hence the newspaper can no longer charge their readers much by claiming unique analysis. At last, the Web becomes a more popular and cheaper place for people to put advertisement; hence the newspapers can no longer charge their readers as well as the advertiser by claiming unique market. Therefore, the elapse of the glory becomes inevitable to the newspapers since the entire value of their produced asset has been decreases definitely. This newspaper crisis is not about the greediness of human nature, it is not about the poor execution of the business, and it is not about a normal economic cycle. The newspaper crisis is about the unchangeable fact of the value decrease of the asset that the newspapers can produce.

So here are the lessons learned. The cost of the raw information generation is minimized. The cost of static analysis over the raw information has been cheap. The cost of posting advertisement has been cheap. If the Web has decreased the value of nearly all the information asset in the traditional mean, what should we do to produce new type of information asset that can be charged decently in this new Web age? This is thus the real question the newspaper business should consider instead of believing the problem be solved by simply producing online newspapers.


Kingsley Idehen said...

It's been a while!

The URI is the new medium of value exchange, its the canonical unit of data access and data conduction.

Quality data covering people and events, combined with editorial context is what newspapers have provided for eons. The need for the aforementioned remains, but the medium of value exchange is no longer the rectangular unit of printed matter we know as the "newspaper" :-)

Same applies to the Movie, Music, and Radio industries :-)


Yihong Ding said...

Hi kingsley,

Surely you are right. URIs are the units of information online. However, it is still the human brains in contrast to machines that add the real chargeable values to the produced information asset. The problem is what formats of the information asset we should produce. I believe that this is also a fundamental question for monetizing the Semantic Web technology too.

As you said, the same concept is not only for the paper-printed newspapers, but also for the other traditional medias such as Movie, Music, and so on.