Were local newspapers doomed by end of their advertising monopoly?
June 14, 2012 | 9:15 pm
On the Harvard Business Review blog, Justin Fox take a look at the 3-day-a-week downsizing of papers in Huntsville, Alabama and New Orleans, making those the first two major metropolitan areas without an actual “daily” newspaper—but not, Fox predicts, the last. Fox believes that local newspapers were always doomed—not because the Internet is better at reporting news, or even solely because of the Internet at all, but because papers’ advertising revenue stream has been superseded by other advertising streams.
Newspapers flourished in the second half of the 20th century, Fox writes, because they had a monopoly on “the delivery of printed advertising messages into homes in a given city or (better) metropolitan area”. Ads appeared in the pages, circulars came bundled into the newspaper, and the newspapers made a fortune charging for those privileges. But then along came direct-mail advertisers such as chain stores, and of course the Internet.
In the future, Fox suspects, newspapers that want to continue offering the news may have to “effectively become non-profits.” Subscription fees don’t seem likely to be able to bankroll much of a news-gathering operation.
In the end, Fox notes, the days of newspapers’ advertising monopolies are long in the past, and will never come again. And papers that relied on that monopoly are going to have a hard time adapting.