What newspapers can learn from Netflix
July 28, 2011 | 10:35 pm
Sometimes I think you can make e-reading news out of just about anything. Ken Doctor, author of the book Newsonomics, has taken a look at the recent Netflix price hike in an article on the Nieman Journalism Lab blog, and compares Netflix’s attempts to shift customers to digital streaming and away from costly physical media to newspapers’ attempts to move customers on-line and away from costly print media. (Mathew Ingram also has a piece analyzing Doctor’s analysis on GigaOm.)
Doctor’s piece is long and involved, going into detail on Netflix CEO Reed Hastings’s strategy. It also discusses newspaper publishers’ own strategy, which has to date involved gradually increasing the price of hard-copy newspapers and, more recently, starting to charge for content on-line. However, the process of moving print media on-line is complicated by the other part of newspapers’ business model, which is advertising. Print advertising is still considerably more lucrative than the on-line version (and advertising accounts for 70% of newspaper revenues worldwide), and publishers are going to have a hard time making up the difference in revenue from mere subscription fees.