The imminent death of newspapers has gone from apocalyptic to commonplace to cliché with Internet speed. And rightly so: the whole business model is gone, destroyed by the fact that the Web can deliver text 100,000 times less expensively than pulp.
Put that way, it shouldn’t come as a surprise that the internet is changing business models – after all, that’s roughly the same change in cost that the combination of papermaking and Gutenberg’s press made possible. The thing is, people don’t really understand, even yet, what this change means.
I’m tempted at this point to include equations, but I’ll resist. So think of it this way: the New York Times spends ten million dollars to deliver about as many readers as Glenn Reynolds at Instapundit can for a thousand bucks. This has a lot of implications, but the biggest one is simple: it costs almost nothing these days to become a publisher, so lots of new publishers are coming into the market.
On the other hand, the number of readers really hasn’t changed. So, it’s like pouring the same amount of water from a tall pitcher into a wide flat baking dish; you’re going from a world where you can have lots of readers, but only a few outlets – the tall narrow world – and moving to one where there are lots more outlets, but where you inevitably end up with fewer readers for each. The conventional name for this, in Internet-speak, is “the Long Tail”, but most pundits are taking it from the wrong end. They don’t realize that, as the costs of entry are lower, readers inevitably migrate to the new sources, leaving fewer for the big outlets.
It’s not stopping, either. Newspapers are the first to go, because they depend primarily on classified advertising, or what might be called “nearly classified advertising” – such as the display ads for jewelry and perfume in the Style section of a newspaper. Magazines are already feeling it as well. Look at a copy of Newsweek or Time next time you’re out. They are still hampered by the fact that it’s expensive to print on physical paper. Meanwhile, their virtual competitors can deliver “impressions”: people who see the advertisements, for far less, and provide content that’s literally up-to-the minute. In response, many magazines – especially trade magazines that don’t require glossy images – are already moving to web-only very.
What then? This won’t stop. Advertising-paid television is on the same track. I don’t have any use for broadcast TV any longer, I depend on cable. And I’m one of millions. And I know people who get all their television from YouTube or Hulu, by Netflix and by download.
To some extent, the television networks are protected by the relatively high cost of production. But that won’t last. Last night I was watching Ed Driscoll’s piece “The Red Queen’s Race“. Ed appears to presents it in the sepia-toned set of a Victorian mansion, but in fact he shot it entirely in his home studio. The whole “set” is digital. Steve Green shoots his PJTV segments in his basement. Mine are shot in my office. And blip.tv gives you access to an amazing variety of original content, made by semi-professional creators who will only get better with experience.
We’re only a few years – two to five is my guess – before the networks are in the same position as newspapers and magazines are today: their expensive, capital-intensive business model on the brink of destruction.
If you follow some of the debate about all of this, it sounds like this is the end of the world as we know it. And, in truth, it is. Newspapers, printed in bulk on cheap pulp paper, distributed to the front door every day or in the mail once a week, are dead media walking. Network television, with gigantic audiences and complete dominance of an hour of the evening (like Milton Berle had when I was a kid) is already dead. And the networks are still alive, but mortally wounded.
It’s not all bad, though. This revolution has already made more variety, and more diverse content, already available. And new talents and new voices will be more easily able to get at least an entry into the market. Frankly, if that requires some traditional media forms to die out, it’ll be worth it.
But that won’t be much comfort to those who work in those dying industries. Just ask medieval scribes how they felt about Gutenberg.
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