The Post Register is partnering with the Eastern Idaho Entrepreneurial Center on a task so daunting that, should we succeed, we are contemplating taking on world peace as our next project.
Indeed, the name of the email group for this project is “whirledpeas” (“world peace,” get it?).
What could possibly be so fraught with peril? Essentially, EIEC’s assignment, in collaboration with our staff, is to find a business model for the Post Register that includes journalism, advertising, the Internet, people under the age of 35, and the potential for profit. So far, this combination has proven toxic. Our main attention will be to handheld devices.
“The brief history of the Internet,” writes British author and thinker John Lanchester, “is dominated by wishful thinking about turning internet traffic into revenue; companies that have managed to do it are vastly outnumbered by those who have learned the cruel new information era twist on ‘if you build it, they will come.’ The modern form of that now runs: ‘if you build it, they may well come, but only as long as it’s free.’ That is why, as Warren Buffett observed, the internet is probably a ‘net negative for capitalists’.”
Succinctly, here’s the problem:
1. With some exceptions, people pay precious little attention to most Internet advertising.
2. People under the age of 35 have grown up with the unfortunate and blatantly false assumption that real journalism can be delivered to their electronic devices for free.
3. Good journalism is expensive and can’t be done using “community journalists,” by rewriting press releases or by steam-of-consciousness blogging.
What you have here is a recipe for the ultimate disappearance of real journalism.
So far, there remains enough interest by readers and advertisers in the old-fashioned, printed-on-dead-trees form that it’s still profitable.
The Internet is the greatest, most efficient medium for exchanging data the world has ever seen, by an infinite factor. Unfortunately, as both Lanchester and Buffet make so clear, it’s not a great business tool. For every high-publicity success story, there are a thousand failures that go unnoticed.
Some newspapers have thrown in the towel when it comes to the Internet. In early 2011, the Newport (Rhode Island) Daily News set its annual price for print and online to $157, or a dollar a month above the print-only fee. But online-only access is $345 – a price that Publisher William Lucey III told Columbia University researchers “is more of a deterrent.” The amount was based on a scenario in which, “if everyone wanted only a digital product, this is what it would cost.”
Even Google loses money on every single venture (YouTube, owned by Google, loses $500 million a year), save one – targeted Internet advertising. This works not because Google’s ads are any better than others, but because there are, quite simply, so many of them. They scale on a global level – anything less than that doesn’t have the volume to work.
So newspapers have become hybrids, using the profits of print to subsidize experiments online. Based on current trends, at some point a good share of print readers will have quite literally died off, not to be replaced by the generation raised during the Age of Entertainment.
There are several potential outcomes:
1. Young readers will eventually migrate to print.
2. Young readers will be willing to pay some sort of reasonable but significant subscription fee for information provided by real journalism sources.
3. We will find a model that requires significantly less revenue to generate a profit than current models, and we’ll be able to generate enough revenue through a combination of advertising and subscriptions (or some heretofore unrecognized revenue source) to be sustainable.
4. Real journalism will become the realm of the non-profit and daily community newspapers will become a fond (or not so fond) memory.
To be clear, none of these scenarios is imminent. Predictions of the end of legacy media – newspapers, television and radio – have been wrong now for going on 20 years. They continue to be wrong. We’re talking about a transition that is likely to take anywhere from 10 to 25 years, maybe even longer.
Meanwhile, what to do? We hope to have the answer by the end of the winter term at Brigham Young University-Idaho and Idaho State University, whose students provide the resources for EIEC. If we’re successful, expect the end to all world conflict within six months of that.