The hard truth: Newspaper monopolies are gone forever

..Over the last few years I've regularly been cornered by nervous publishers or broadcasters or journalists or film makers and asked about how I think computers will affect their various industries. For a long time most of them were desperately hoping for an answer that translated roughly into 'not very much'. ('People like the smell of books, they like popcorn, they like to see programmes at exactly the same moment as their neighbours, they like at least to have lots of articles that they've no interest in reading', etc.) But it's a hard question to answer because it's based on a faulty model. It's like trying to explain to the Amazon River, the Mississippi, the Congo and the Nile how the coming of the Atlantic Ocean will affect them. The first thing to understand is that river rules will no longer apply..

..Television companies are not in the business of delivering television programs to their audience, they're in the business of delivering audiences to their advertisers. (This is why the BBC has such a schizophrenic time - it's actually in a different business from all its competitors). And magazines are very similar: each actual sale across the newsagent's counter is partly an attempt to defray the ludicrous cost of manufacturing the damn thing but is also, more significantly, a very solid datum point. The full data set represents the size of the audience the publisher can deliver to its advertisers...

..Now I regard magazine advertising as a big problem. I really hate it. It overwhelms the copy text, which is usually reduced to a dull, grey little stream trickling its way through enormous glaring billboard-like pages all of which are clamoring to draw your attention to stuff you don't want; and the first thing you have to do when you buy a new magazine is shake it over a bin in order to shed all the coupons, sachets, packets, CDs and free labrador puppies which make them as fat an unwieldy as a grandmother's scrapbook. And then, when you are interested in buying something, you can't find any information about it because it was in last month's issue which you've now thrown away. I bought a new camera last month, and bought loads of camera magazines just to find ads and reviews for the models I was interested in. So I resent about 99% of the advertising I see, but occasionally I want it enough to actually buy the stuff. There's a major mismatch - something is ripe to fall out of the model...

Then he starts to go downhill in the same way that most people do/did when they were framing the question wrong. DNA was the best at seeing if the question was framed wrong, but even he apparently fell for it sometimes. Basically he predicts unobtrusive, helpful ads on digital magazines & micro-payments for content.

It's all very well to say that papers should have seen this all coming a long time ago and we can have a great time talking about it. I think the reality is that see it, don't see it.. it wouldn't have mattered in most cases. They aren't Microsoft missing out on tablets carriage makers that should have started making auto parts. They were horse breeders. The fanciest breeders probably though they were safe at first. No Lady is going to travel to London in one of those crazy horseless carriages. Local donkey breeders too. Horseless carriages are hardly going to plow a field?

Content for readers was never the business they were in true. But it was always their core competency. They were never experts in advertising that could have figured out how to keep delivering to their real customers regardless of the medium. Pre web print was a major channel through which one can do quality advertising. Now it is a small channel that one can do poor advertising, one step above mailbox spam. If you are looking for a camera you're not going to look in a magazine.

I've heard that the terms of this deal make the investment more like a loan. Maybe it is. But if Buffet is buying these newspapers thinking they have a long profitable future ahead, I think he's wrong. They're rivers in the ocean, camel trains in the age of railroads, pick your metaphor.

The competing-heterogenous-information-sources model discussed here is actually closer to how the newspaper industry worked. Some of the competing newspapers were large companies, others were smaller or even a single editor/publisher; some were thick while others were barely a few pages; some were dailies while others came out less often; some were morning papers, while others came out in the afternoons or evenings; some relied primarily on subscriptions while others focused on retail or street sales; some were business-targeted while others were targeted at home readers, and still others were targeted at explicit political/interest groups; etc.

Newspapers need to lose the national news, I don't need to read a story 24 hours after it has been disected on the web and cable channels.

I'd also say forget looking for a solution on the web. The answer is mobile with a twitter style continously updating feed of local news and sports.

People don't have or won't take a half hour to read a newspaper but they've got five minutes here and there throughout the day to see what is happening in their local area.

Want total anonymity? Then you can subscribe. Willing to fill out a profile so we can target ads, then your feed is free.

What advertiser wouldn't want to reach twenty something college educated women in Podunk? Fewer, more targeted ads inserted in stream that get better results.

Smaller the market; better the brand. No one else has this and that's what Buffet is buying.

If I'm a local SMB in a small town, chances are that I'm not going to trust some big company with my SEM, SEO, retargeting, and Facebook ads. If local papers can offer these services, they can win local in aggregate better than any other company.

You would think with how word heavy the internet has been, newspaper writers would have thrived.

There are holes that aggregation sites like the Huffington Post simply cannot fill and I do believe that consumers are looking for something more. It may be because the they are becoming accustomed to paying for applications on mobile devices.