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Jan 12, 2010

No ads cause newspapers' nightmare on E-street

Can the e-reader save newspapers and quality journalism? In a word, no.

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Can the e-reader save newspapers? The frenzy of news over the past few weeks about a slew of new electronic reader devices, many of which will hit the US market in coming months, has created an impression that the nightmare confronting newspapers and journalism could be resolved by replacement technology.

Yesterday, for example, The Australian editorialised that an e-reader “revolution is on offer”, which is “yet further proof of capitalism’s extraordinary resilience and creativity”.

Fine, but could e-readers save newspapers and quality journalism? In a word, no.

As we at Crikey have been banging on about for a couple of years, the dilemma that is upending the economics of quality newspapers — and therefore quality journalism — has been created by the demise of a century-old business model that is funded chiefly by advertising revenue. It’s all about advertisers, not readers, deserting newspapers because they have found more effective online media to reach their consumers.

So unless new technology devices can recapture the lost advertising revenue that is migrating from newspapers — which seems most unlikely — they will not produce the revenue that pays for quality journalism. Get it?

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2 thoughts on “No ads cause newspapers’ nightmare on E-street

  1. DMH

    Nice piece. I think some form of advertising will find it’s way onto e-readers you’re right but the guilty of all newspapers – the advertising crack that they will never get back, even on e-readers is classified revenue. That’ money has just gone and the newspapers companies are still adjusting to this loss.

    Still what’s bad for the ‘business” of newspapers is probably actually a good thing for the profession of journalism. Having worked for both magazine and newspaper publishers what always struck me as odd is the cost base that sits around the newspapers is huge and to all intents and purposes irrelevant to the actual process of delivering the news to consumers. Insight managers, readers’ offers executives, customer event managers – pretty much most of the marketing, non sales-related commercial roles, business development and strategy roles are completely extraneous to requirements of producing a paper. They are they’re to grow the business of the newspaper but the cost/benefit the newsroom sees as a result of this is minuscule. In many cases these roles can be replaced for free in the digital realm. Who needs insight managers when you have real-time analytic courtesy of Google for example?

    The iPhone and Kindle have shown that people are willing to pay for content. That’s a good thing. Even if people are only willing to pay 10 pence/cents for a newspaper that has no advertising, just content, in the right level of numbers it will pay for an editorial team to produce and disseminate the news. For sure there will be casualties but if journalists are worried about the loss of news they need not be but people who are in the business of running newspapers should be looking for new careers.

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