Newspaper Survival

February 20, 2007

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In one of my first posts on this blog called Stacking the Deck, I talked about how the loss of classified revenues was hurting newspapers. An editorial in the Wall Street Journal talks more broadly about the business challenges facing newspapers.

The Washington Post, a model of journalistic excellence, has lost 14% of its circulation since 2000. Across the industry, circulation has been dropping for 20 years, and worse, the pace of decline seems to be accelerating. In the 12 months ending in September of last year, the 50 largest papers lost 3.2% of their daily circulation.

Next, the loss of advertising revenue is tackled.

But for newspapers, the challenges are mounting, including advertisers fleeing not only to follow lost readers but also because they believe that newer forms of media can be both more cost-effective and just plain more effective. For example, classified ads, which can represent a third of a typical newspaper’s revenue, can be delivered online faster (instantaneous), more conveniently (searchable) and cheaper (sometimes free via Craigslist). Not much imagination or boldness is required to predict that classifieds could completely disappear from newspapers.

And one of the proposed solutions is turning newspapers into not-for-profit organizations.

Not-for-profit status might be one possibility. Instead of having billionaire moguls as proprietors, we could try to turn them into philanthropists who found nonprofit organizations to buy and operate their local papers.

Eeeeeeeek. Not exactly a vote of confidence is it.

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As Tom Slee discusses in his post The Long Tail 0.2 – Introduction, Chris Anderson sees a long tail in flour.

People often ask me to name some product category that does not lend itself to Long Tail economics. My usual answer is that it would be in some undifferentiated commodity, where variety is not only absent but unwanted. Like, for instance, flour, which I remembered being sold in the supermarket in a big bag labeled “Flour.” Then I happened to step inside our local Whole Foods grocery and realized how wrong I was: Today the grocery carries more than twenty different types of flour, ranging from such basics as whole wheat and organic varieties to exotics such as amaranth and blue cornmeal. There is, amazingly enough, already a Long Tail in flour.

The man responsible for the diversity in flour, spaghetti sauce, and mustard is the food scientist Howard Moskowitz. I learned about Dr. Moskowitz through the wonderful story teller Malcolm Gladwell. According to Malcolm Gladwell in his article The Ketchup Conundrum, Dr. Moskowitz had the following revelation:

They had been asking the wrong question. There was no such thing as the perfect Diet Pepsi. They should have been looking for the perfect Diet Pepsis.

Watch this video [18 min] and remember Howard Moskowitz the next time you bite into a zesty pickle.