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Comment by nodata | Hacker News Reader

How could you possibly believe all of the efficiency gains from having a digital supply-chain wouldn't lead to a cheaper product?

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Those gains are MORE than cancelled out by the miserable rates they are charging for digital ads versus print.

Thank about it: even if you read every page of the paper online every day for a month you wouldn't generate anywhere near $18 in revenue. Heck, you probably wouldn't generate that if you clicked on every ad.

It used to be that the cost of the paper roughly covered just the printing and distribution. All the money to actually pay reporters and editors and photographers came from the ads.

So here's a theory. An old adage used to be "I know half my advertising dollars are wasted, but I don't know which half!"

Now that you can get analytics on ad views and interactions, we do know that the interaction rates on ads in publications are terrible. Therefore, they command lower rates.

Is this a case where technology is "cleaning up" an ineffective use of marketing dollars?

Another change for advertisers is that they can get superior targeting online. Why broadcast to everyone when you can target your niche directly?

On a side note, I hate marketing. I want to either be the customer or the product, but never both. That said, I might pay extra for newspapers or media with no ads, only reporting. I want investigative journalists essentially on my payroll. Which is basically public broadcasting (NPR or PBS in the US), but I wouldn't be opposed to a completely private alternative. The issue there is that I'd want to pay an established name, an upstart would have to convince me that they'll provide excellent work.

For sure, that's part of it. But I think a bigger part is that the role newspapers play in society is changing and new media is filling roles that were once their exclusive domain.

Or, put another way, I think Craigslist obliterating the classified ad market has more to do with it than analytics suddenly enabling marketers to see their ad dollars were wasted at newspapers.

I might pay extra for newspapers or media with no ads

I probably would too, but that's a terrible deal for the advertiser: pay us money to broadcast your message to only the cheapest, least engaged segment of our audience.

To play the devil's advocate, a product that is cheaper to produce, doesn't necessarily sell for a lower price to consumers. The pricing could relate to consumer demand for the product, competitors' prices, etc., rather than being a simple function of the price of production. I'm not an economist, and I might be wrong.

I'm not an economist either, but what you say is - for what I understand - the consequence of the whole supply/demand concept. There is no global "value" of things, in the end the only real value is what people are willing to pay for it.

Because I value the product more than I value the distribution channel. If you can deliver me interesting, in-depth reporting, then I'll pay for it and I honestly don't care how you get it to me.

You consider the cost of printing and delivery to be much higher than it really is. You also ignore the elements of the newspaper that used to off-set various costs for you that are disappearing.

In essence, you were never paying for the news, and so unfortunately, you don't have a firm grasp of the true cost.

In essence, you were never paying for the news, and so unfortunately, you don't have a firm grasp of the true cost.

This is such a critical thing to understand. No one understands the true cost, because no one has ever paid for the news, it's always been advertisers. And now, for whatever reasons, advertisers don't want to pay for the digital equivalent, and they don't seem to be coming around.

This correlates to brandnewlow's comment above as well. It would be fascinating to see a news source that was paid for entirely by customers and thus not beholden to advertisers--something like HBO. But it would very hard to sell such a thing, because $15-$30/month for news, historically speaking, seems insanely high.

I know i'm not really adding anything to this discussion by posting this, but I just want to say this thread here is an excellent analysis. If I could sum up the plight of newspapers in a few paragraphs, i would pick this and its few parent comments.

Sounds basically like what Stratfor was trying to do. I don't know what they charged, or if the value was there, though.

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