Why Newspapers and Magazines Fail

What’s wrong with the newspaper business? And the magazine business for that matter? The problem has been well-known for some time – newspapers and magazines have been swamped by free online content, much of their own making, driving down print circulation rates and advertising dollars alike. Young people don’t read newspapers any more. Aggregators (e.g., The Huffington Post) bundle free content, further cutting profit opportunities for content providers. It’s a real mess, isn’t it? In response, the industry turns to “micropayments” (tiny fees customers pay for content whether they like to or not) and “tip jars” (whereby customers donate money to content websites), if you can believe that.

I have two very big problems with all this.

First, where is it written that any business – even newspapers and magazines – has a right to make a profit? If I open a restaurant, and nobody wants my food, I lose money. That’s how it works. You publish a newspaper or magazine that customers don’t value, you lose money too.

Second, there’s the big excuse. That’s the one that goes: because people don’t read newspapers any more, what can we do? It’s the customers’ fault – they don’t read any more! Imagine another industry whose leaders say they can’t succeed because people don’t like their cell phones, or software, or shoes any more. People do not read newspapers because the industry no longer gives them a reason to do so. Don’t blame the customer for a failure to innovate and create something they want.

Why doesn’t any one talk about new ideas, new business models, to resuscitate the industry? There are no guarantees when you try something new, but the alternative is crystal clear – layoffs, downsizing, and bankruptcies.

Here’s one little idea to consider. Why do people go to the movies when there is television? Some may remember that in the earliest days of TV the movie studios fought tooth and nail to keep the TV barbarians away from customers. It didn’t work, and they were forced to come up with something else. People go to the movies because of the experience, the aesthetic, the community. The movie business is not without its struggles, but it’s still here six decades after TV came on the scene. Give people a reason to read a newspaper or magazine rather than go to ten different online sites. There is much to be learned from considering the experiences of other industries that went through similar traumatic transitions. Rather than invent new ways to force customers to pay for content, why not invent new ways to give customers something they care about and can’t get anywhere else? If that happens, they will pay, and be happy to do so. No guarantees, but a big step up from the embarrassing world of micropayments and tip jars.