- They failed to confront their brutal realities. The internet age brought a whole new landscape for people to get their information. Recently, with the arrival on smart phones connected to the World Wide Web, people don't -- and won't -- need to go far to access information. With newspapers, people are confined to getting the latest news the next day. How will you compete with real-time news, when you're sending information a day late? More importantly, how will you compete with free information that's distributed online as it happens?
- Newspaper revenue model stinks. The newspapers of course make their change on ads displayed on their papers. These could be classifieds or display ads. Why does this revenue model stink? It reminds me of the World Wide Web 1999. Think about the unfocused, untargeted banner ads flashing on websites. Google's targeted ad listings through their search results, also known as AdWords, crushed that banner advertising craze. The newspaper companies are still in that 1999 mode, with their untargeted advertising. Yes, it's doing okay now because local search (e.g. Google Local) hasn't been adopted by the mainstream just yet. Once the average Joe does adopt it--and it will happen--watch for a major shift in advertising budgets.
- The forgot the dreaded question: "What business are we really in?" If executives had posed this question early, they wouldn't be attacked by seemingly harmless "hobby" sites such as Yahoo, Craigslist, and eBay. Newspaper companies such as the New York Times or the San Jose Mercury News need to take a hard look at the railroad industry -- and what happened to its fate. The railroad companies, thinking it had a monopoly on getting people from Point A to Point B, forgot its real line of business: transportation. Executives were seemingly too stubborn to accept that fact; the car industry soon took them by storm. It's never recovered since, and it never will. The same thing is happening to the newspaper companies. It won't happen anytime soon, but it's heading there: Newspapers will become obsolete. The industry needs to realize what business it's really in: information. Once executives understand that, they'll be more prepared to run their companies -- instead of making faulty acquisitions and firing thousands of workers.
Posted on January 08