The June 2010 issue of The Atlantic has a great article by James Fallows entitled How To Save The News. The article examines the newspaper business, journalism, and the role technology is playing in changing the way we get news.
Hal Varian is Google’s chief economist. He offers the following insight regarding the newspaper business model:
“If you were starting from scratch, you could never possibly justify this business model,” Hal Varian said, in a variation on a familiar tech-world riff about the print-journalism business. “Growing trees - - then grind them up, and truck big rolls of paper down from Canada? Then run them through enormously expensive machinery, hand-deliver them overnight to thousands of doorsteps, and leave more on newsstands, where the surplus is out of date immediately and must be thrown away? Who would say that made sense? The old-tech wastefulness of the process is obvious, but Varian added a less familiar point. Burdened as they are with these “legacy” print costs, newspapers typically spend about 15 percent of their revenue on what, to the Internet world, are their only valuable assets: the people who report, analyze, and edit the news. Varian cited a study by the industry analyst Harold Vogel showing that the figure might reach 35 percent if you included all administrative, promotional, and other “brand” – related expenses. But most of the money a typical newspaper spends is for the old-tech physical work of hauling paper around. Buying raw newsprint and using it costs more than the typical newspaper’s entire editorial staff. (The pattern is different at the two elite national papers, the New York Times and The Wall Street Journal. They each spend more on edit staff than on newsprint, which is part of the reason their brands are among the most likely to survive the current hard times.)
The next time you are close to an Apple store, stop in. Spend some time with an iPad (you will have to wait in line just to see and touch one). Think about your current business model - - think about how customers and clients “engage” with the printed material your company produces. Think about the type of behavior you are seeking from those same customers and clients during this engagement process. Think about the technology and customer/client interface that currently exists - - and how it will change and look in the future. Think about the new world of non-linear reading and learning versus the worlds of linear engagements. Think about your current business model in terms of distribution, engagement, and monetization. Think about how to blend information, knowledge, and data together with an interesting and entertaining experience.
Finally, as you explore the iPad - - think about the number of logging trucks on the road heading south and what happens when old and dated busness models run head on into innovation and changing technology.
Hal Varian is Google’s chief economist. He offers the following insight regarding the newspaper business model:
“If you were starting from scratch, you could never possibly justify this business model,” Hal Varian said, in a variation on a familiar tech-world riff about the print-journalism business. “Growing trees - - then grind them up, and truck big rolls of paper down from Canada? Then run them through enormously expensive machinery, hand-deliver them overnight to thousands of doorsteps, and leave more on newsstands, where the surplus is out of date immediately and must be thrown away? Who would say that made sense? The old-tech wastefulness of the process is obvious, but Varian added a less familiar point. Burdened as they are with these “legacy” print costs, newspapers typically spend about 15 percent of their revenue on what, to the Internet world, are their only valuable assets: the people who report, analyze, and edit the news. Varian cited a study by the industry analyst Harold Vogel showing that the figure might reach 35 percent if you included all administrative, promotional, and other “brand” – related expenses. But most of the money a typical newspaper spends is for the old-tech physical work of hauling paper around. Buying raw newsprint and using it costs more than the typical newspaper’s entire editorial staff. (The pattern is different at the two elite national papers, the New York Times and The Wall Street Journal. They each spend more on edit staff than on newsprint, which is part of the reason their brands are among the most likely to survive the current hard times.)
The next time you are close to an Apple store, stop in. Spend some time with an iPad (you will have to wait in line just to see and touch one). Think about your current business model - - think about how customers and clients “engage” with the printed material your company produces. Think about the type of behavior you are seeking from those same customers and clients during this engagement process. Think about the technology and customer/client interface that currently exists - - and how it will change and look in the future. Think about the new world of non-linear reading and learning versus the worlds of linear engagements. Think about your current business model in terms of distribution, engagement, and monetization. Think about how to blend information, knowledge, and data together with an interesting and entertaining experience.
Finally, as you explore the iPad - - think about the number of logging trucks on the road heading south and what happens when old and dated busness models run head on into innovation and changing technology.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.