Newspapers and the Internet. Next, TV Stations?


Clay Shirky wrote a brilliant treatise on the Internet’s effects on the newspaper business. It nicely summarizes how newspapers got into their current state, and advocates a from-within-the-revolution way of thinking about what’s happening to information.

It has many money quotes. Here’s one:

If you want to know why newspapers are in such trouble, the most salient fact is this: Printing presses are terrifically expensive to set up and to run. This bit of economics, normal since Gutenberg, limits competition while creating positive returns to scale for the press owner, a happy pair of economic effects that feed on each other. In a notional town with two perfectly balanced newspapers, one paper would eventually generate some small advantage — a breaking story, a key interview — at which point both advertisers and readers would come to prefer it, however slightly. That paper would in turn find it easier to capture the next dollar of advertising, at lower expense, than the competition. This would increase its dominance, which would further deepen those preferences, repeat chorus. The end result is either geographic or demographic segmentation among papers, or one paper holding a monopoly on the local mainstream audience.

If you’re interested in this area and read just one blog post today, read this one.

I’ve been thinking about the television business model a bit since Fisher Communications laid me off. I’m far from understanding it all — no pun intended, but I only know what I read.

Local television affiliates, like Fisher Communications, are next in line to be demolished by the web.

An interesting case in point is Fisher’s current dispute with DISH Network. If you’re interested, a web search will turn up a lot of commentary. Fisher wants DISH to pay more money for the privilege of carrying of Fisher’s stations on their network, and thinks its pricing should be akin to premium cable channels.

The salient point is that although Fisher’s stations are now unavailable to DISH subscribers (of which I am one), ABC’s content (“programming”) is still accessible. If I wanted to watch ABC’s shows (which I don’t, but that’s a different problem, but let’s say I did…) I could, through a few different methods.

The local Fisher station, KOMO, doesn’t have any local programming content of interest to me. Local news broadcasts are a joke, because I don’t want to wait until 6:00 pm to find out what happened today — I have syndication fees and twitter and web surfing for that, and they’re immediate. If KOMO has local content beyond their news broadcasts, it’s so inconsequential that I don’t even remember what it is. So why should I care if I can no longer watch KOMO? In fact…I don’t. After a couple of days of minor concern, my wife and I no longer remember what KOMO looks like.

As Internet technologies continue their progression, users will experience more and cheaper bandwidth, greater ease of use, and more connectivity. What happens to television affiliates in the next couple of years? They become road kill.

I’m still puzzled by Fisher’s demolishing its Internet division. (Disclaimer: I may be too close to clearly evaluate their decisions. As I was discussing with a friend last week, I’ll stop looking for closure on this.) It’s not a recipe for facing up to the future. It is what failed company leadership looks like.

A hat tip to Joe for the article.

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