The answer, my friend, is blowing in the wind…
Drudgereport.com, one of the top websites in the country is an aggregator of other people’s work.
My friend Jeff Jarvis calls on websites to be ‘curators’.
All of this is great…. but…
But at the end of the day, someone has to make the original content and be paid for it.
Until now, that someone has been newspapers.
But I think we are looking at the end of newspapers, and that is a sobering moment for all of is.
Again, I am going to pimp for Jay Yarrow’s outstanding analysis in the BER, which is, I learn to my amazement, the Business and Economic Reporting program for NYU! So congrats Jay Rosen for doing such an incredible job over there.
The entire newspaper business, now no longer a surprise to anyone, is on life support.
Henry Blodget at Silicon Alley Insider recently did an analysis of The New York Times and found that the company has a negative net worth!
They have $46 million in cash and are owed $366 million from advertisers, giving them $412 million. They owe $398 million in short-term debt, which comes due May 2009, in addition to a projected $470 million in operational costs like salaries and newsprint, giving them a total of $865 million in near-term obligations — $453 more than they have.
This is not a problem they are going to fix by mortgaging their new building.
And this collapse is not limited to The NY Times. The bankruptcy of the entire Tribune group, which include The LA Times, The Baltimore Sun, the Chicago Tribune is almost incomprehensible, yet true.
The newspaper business is not what it was. It is a mess.
The Washington Post is actually supported by that company’s educational division (including the Stanley Kaplan SAT review course). The company’s annual report last year stated that the company took in $2.93 billion in revenue (of a total 4.18 billion) from the educational branch. The paper delivered only $889 million. The paper’s revenue declined 7% while the educational division grew 13%. Without the educational division, I think it is fair to say that the paper would be in the same straits as The NY Times is now.
So the conventional newspaper business model is in deep deep trouble. And if the papers go belly up, who is going to provide the content for Mr. Drudge and countless others to curate?
That’s a good question.
Is news of any value?
I think so.
But perhaps not on paper and ink.
Michael Bloomberg made a fortune with news, but by not putting it on paper and ink. He could have. But he opted instead to lease dedicated terminals that delivered the same information that a paper (or a website!!) might have. Bloomberg understood the value of the news information and a way to package it very very profitably.
In yesterday’s blog, Paul commented:
Business models are thin on the ground. Sure, loads of newpapers are crossing to the internet – it’s a cheap transition to make – but how many are making money from it? Name them.
Well, here’s one. The Wall Street Journal. Since taking over the paper, Rupert Murdoch has started charging for the online service, and now you have to pay $104 a year for the full online service. In the past year, Murdoch has earned $100 million in online ad revenue and another $100 million in subscription fees. That’s almost as much as The New York Times is going to get for mortgaging its building.