Thursday, April 08, 2010

Is The Newspaper Industry Dead? Probably Not If It Is For Free

We talked about the potential fate of the newspapers in the advent of the internet [see Creative Destruction: Newspaper Industry Headed For The Dinosaur Age?], where traditional newspapers represent as the "old industrial age economy", which currently suffers from "creative destruction" from the transition to news based on the web or the "information economy'.




Nevertheless, this interesting commentary and picture from the Wall Street Journal Blog,

``If Ben Bernanke drops newspapers from a helicopter, will it save the beleaguered publishing industry?

``Probably not. But the plucky Hong Kong newspaper The Standard is using a cartoon drawing of such a fantastical occurrence to brag about the paper’s circulation, now above 200,000.

``In a so-called house ad (called that because the house, the newspaper, couldn’t sell the page to a paying advertiser), Chairman Bernanke tosses copies of the Standard from a red helicopter over Hong Kong’s skyline. The headline on the paper “WORST LIKELY OVER.”

Free newspaper will probably not end for as long as the other sources of revenues outside subscription -particularly advertisements- will be able to cover the costs of maintaining these prints, overhead and distribution.

However, competition from the web and the TV for ads will be tight as to render the sustenance of free news as suspect.

Importantly, the diminishing role of newspaper is likely to reconfigure the flow of information which is likely to impact the distribution of power held by the mainstream via mainstream news.

As Professor Gary North projects (bold emphasis mine),

``Printed daily newspapers are doomed. On-line daily paid-subscription newspapers are also doomed. Conclusion: the Establishment is about to lose one of its three major instruments for shaping public opinion: newspapers, the TV networks, and the tax-funded schools...

``The era of Establishment control over the flow of ideas is ending. That era rested on the high cost of entry. Now anyone can enter. The mammoths are in the par pits, with their huge buildings, huge staffs, and huge debts."

So creative destruction in media is likely to also affect the distribution of political power.

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