2008: The Year Internet Surpassed Newspapers

See this Cnet article by Dan Farber entitled Print News is Fading, But the Content Lives On. Among other things, he presents the result of a recent Pew Research survey that showed the Internet passing newspapers in 2008 in response to the question: “where do you get most of your national and international news?

From Farber’s article:

Most newspapers have figured out that you create content for the Web first and that the print edition is a byproduct of that output. Television programming can be viewed on a TV, PC, smartphone, or digital billboard. But as NBC’s Jeff Zucker said recently, “People had been counting on digital exposure. I had been trying to talk about the fact that even as it grew, it was not necessarily the big growth engine for legacy media companies that were trading those analog dollars for digital dimes. We’re now up to dimes. That’s an improvement. It’s still not a dollar for a dime kind of business that I would like to be in.”

I love the quote about trading “dollars for dimes.” I think it captures the problem perfectly. (Much as the 2000-era quote “selling dollars for 90 cents” captured the essence of most Internet business models.)

I believe we are still very much in transition between Internet and print models because the Internet crowd is getting a “free ride” from the major news organizations. I’m not sure how it’s going to work out in the end, but I’ve learned that Innovator’s Dilemma style transitions can take decades to play out.

First, you need to damage the disrupted badly enough to force them to change, which can take years. Second, you need the disrupted to either go out of business or change before you reach steady state, because there can be a long “free ride” period where the disrupted is enabling the disruptors.

For example, what would Google news be if there were no New York Times, AP, CNN, and AFP? You can only give away something that exists and someone is somehow going to have to pay — either directly or indirectly — for the creation of “free” content.

Only when newspapers stop bleeding and start dying (in numbers) will we be able to see how things look when there is no free ride to enjoy.

By analogy, it’s a bit like the situation in consumer electronics. If I want to get educated on home theatre, I can visit a Magnolia store and speak to a highly knowledgeable salesperson and play with different units. Then I can buy the system at Costco for 30% less. Magnolia has given me a free education, but if it were not for Magnolia, Costco might not have gotten the sale because I might have simply remained a non-consumer due to confusion.

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