An increasing number of Americans are getting their news online from sources which are predominantly free. This trend has caused a steady decline in newspaper circulation and a corresponding decrease in newspaper advertising revenue.
If the newspaper industry is to survive, it must modify its predominant business model by:
Serving the Internet news audience. The New York Times appears to be the leader in this effort, having announced two projects designed to provide its content to the Internet news audience. First, the paper announced the testing of an "e-paper" device which will permit users to read downloaded content on a lightweight and easy-to-use electronic device. Second, the paper announced a partnership with Microsoft to develop the Times Reader, Vista-based software which will permit users to read the paper on their PCs.
Finding a way to generate revenue from online news. One of the biggest problems faced by the newspaper industry is the fact that newspapers are not generating revenue from Internet news. A pay-for-online-content model is unlikely to work, given the number of free Internet news sources. However, some papers have begun to recoup lost revenues through the sale of online classified advertisements.
Diversifying. Some newspaper executives have suggested that the industry should partner with Internet search leaders to share revenue or should partner together to compete with existing search engines, particularly in the area of localized search.
It is clear that the newspaper industry cannot thrive unless it adjusts to the changing times. The industry must embrace the Internet as a new means of reaching readers if it is to survive the Information Age as it did the advent of radio and television.
From Will the Internet Kill Newspapers? at E-Commerce Law.
Jonathan D. Frieden is a principal of Odin, Feldman & Pittleman, P.C., a law firm in the Washington, D.C. metropolitan area. His practice includes the litigation of intellectual property matters and other complex commercial disputes and the counseling of e-commerce businesses in a variety of industries. He is admitted to practice law in the Commonwealth of Virginia and runs the E-Commerce Law blog, a regularly updated discussion of news, trends, and legal issues affecting e-commerce businesses.
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