Five Key Reasons Why Newspapers Are Failing

That is true. But GM wouldn't have been in as bad of shape had it adapted to the presence of disruptive competition (Toyota) instead of being defensive in its quest to hold a monopsonistic market share. Actually, GM did start a software business -- OnStar, one of its few recent successes.

 

Um, few back then could have seen the Internet as anything other than a place to chitchat and whack the monkey, The challenge for newspapers was correctly apprehended: how to get a younger average readership. They failed in that, mainly by dumbing down.

 

Ridiculous.
The businesses I mentioned all were natural extensions of what the newspaper companies already were doing, in markets they owned -- but failed to protect.
IBM stayed IBM by going from making business machines to supercomputers to PCs. They didn't switch to selling cheesesteaks. They anticipated the changes in their business model and advanced in those areas. People were warning about interactive TV putting newspapers out of business in the early 90s -- and newspapers just stood and watched as the internet came along.

 

I don't think some of you really understand the business models of eBay or Fandango. It's a little more complicated than putting up a web site. The fact that they and newspapers both appear on the Web aren't really enough to say they are a natural extension. Calling eBay "classifieds with a little twist" is so ignorant of the business itself as to be laughable.

Building business machines or supercomputers or PCs, you are still building computers. Running the types of businesses you are describing and running a news information business are every bit as different as IBM and cheesesteaks.

 

Again, survivor bias. You aren't accounting for all the billions that were spent on Web startups that went bust.

And newspapers did a lot more with the Web than you guys are giving them credit for. You just seem to think that making a successful web business back in the 1990s was as easy as having someone say "Hey, wouldn't it be cool to put auctions online?" and then hire a couple programmers, buy a server and become eBay.

 

And for every craigslist there is an amazon.com or a youtube . . . which lose billions before ever showing an annual profit (if ever).

Amazon lost $1.4 billion in 2000, six years after its founding. It did not show an annual profit until 2004. YouTube still posts staggering losses.

I'm sorry, but newspaper execs are not "clueless" just because they chose not to take such risks.

The internet has been here for awhile. And as recently as 2007 my newspaper made a $173 million profit. The business model still works . . . provided the economy is not in a near-depression and its owners do not saddle it with billions in debt.

Are you nuts?

IBM threw away billions of dollars by letting Bill Gates retain the licensing rights to the MS-DOS an operating system that IBM needed for its new personal computer. They also developed a search engine similar to Google one year before Google came into existence but did not follow through on it.

IBM is successful IN SPITE of its blunders. Just like most newspaper companies.

 

I never said IBM was a perfect company. Businesses make mistakes.
IBM's share price as I type this: $116.80.
Market cap: 153 billiion.
They're doing OK.

 

Okay, you are a newspaper company in 1993.

What intellectual or physical assets do you own that make you better positioned to start a web-based business than anyone else?

 

Newspapers had and still have content.
Content drives everything. Media companies also had access and information.
And I'd argue that newspapers did make technology bets — anyone else remember the CatCue? — but they simply didn't pay off.
Newspaper companies also took strong steps to diversify. Kaplan, TV stations, radio stations, various and mostly failed online ventures.

 

Had being the key word.

It's completely typical today for one of our paper's stories to begin, "Dwyane Wade posted on Twitter that . . . "

Not exactly exclusive information, eh?

 

Kaplan is a big asset to the WaPo these days, but the TV & radio stations, suffering the same problems, are a further drain to a lot of these media companies.

I think Wyman's argument is because of the newspaper industry's relationship with Wall Street, it couldn't take risks. Amazon could lose billions because it was "an Internet company." Newspapers sold themselves as an industry that generated perpetual high returns, so they didn't get that benefit of the doubt from investors and banks.

Rick, it's true that Twoback brings up the successful ventures and ignores the failed ones, but the point is that all of them were natural extensions of what newspaper companies already were doing. Heck, Kaplan is a bigger stretch than Fandango.

 

The thing to remember is that we are in the communications industry. The way we communicate has fundamentally changed because of the Internet. Adhering to that changed culture doesn't mean your selling cheesesteaks.

Sure, doing so would have taken resources away from what newspapers considered their main product, but that's what research and development is all about.

I think this is a pretty good example of how at least one newspaper treated the Web ... http://www.huffingtonpost.com/kevin-naff/culture-clash_b_257830.html