A day does not stroll by that someone, somewhere remarks on the murky waters ahead for the newspaper industry. Shel Holtz (Blogger over at A Shel Of My Former Self and Co-host of the always excellent Podcast, For Immediate Release – The Hobson And Holtz Report) says, "new media don’t kill old media." It would seem like Google CEO, Eric Schmidt, is thinking a little differently.
Check out this quote from the Los Angeles Times article, Google CEO Schmidt: Hollywood Will Do Fine On The Net; Newspapers Not So Much:
"The outlook for newspapers, on the other hand, is ‘bleak,’ and Schmidt said that’s ‘a tragedy,’ in part because ‘investigative reporting is so important for democracy.’
‘The optimism is that there are more people online than ever, older businesses will discover how to monetize and we will all get through this,’ said Schmidt, explaining that Google’s impact on the world of classified ads had been part of the problem for print journalism. ‘I would love that to be true. The evidence does not support that view.’"
All this comes hot on the heels of the news that Google now takes up to 77% of all search ad share (up two percentage points from last year). You can read more about that here: CNET -Google’s Search Ad Share Now Up To 77 Percent. I might as well also link you through to their earnings (which were also just released) – The New York Times – Google Earnings Are Below Forecasts, And Shares Fall.
I had lunch today with a fellow Journalist (yes, I do still consider myself a Journalist – it’s a hard habit to break) and we had an interesting talk about the challenges that newspapers face. Society clearly has a need for this medium, but readership is down, salaries for journalists have not moved up in forever, there are more and more writers, but less and less space, the overall ad revenue ain’t what it used to be, and the industry leaders are heavily leveraged on staff, machinery and infrastructure.
Things have to change, but how?
I love reading my morning newspaper. I even love the weekly flyers from the electronic shops. I wish the paper was thicker and I wish more advertisers could pull ROI from advertising in newspapers. I’m not sure why the publishers don’t leverage the digital channel to really push their content "out there" and engage their readers with a real multimedia experience. I know some that are trying… and we all know many more that are failing miserably.
I would love your thoughts on this news item too: The Toronto Star – Profit Sags 36 Per Cent At Gannett:
"Gannett Co., the largest newspaper publisher in the United States, has reported a 36 per cent drop in second-quarter earnings as the newspaper industry’s woes caused a sharp decline in revenue.
Profit was $233 million (U.S.), or $1.02 per share, down from $366 million, or $1.56, a year earlier, the publisher of USA Today said yesterday… Revenue fell 10 per cent to $1.72 billion."
I can personally attest to the fact that there are some pretty progressive and brilliant minds at many of the leading newspapers trying to figure this all out. I’m hopeful that they’ll be able to uncover newer business models sooner rather than later.