"Today’s newspaper becomes tomorrow’s news-integrator" says Columbia professor

It is one of the best five articles I have read this year on the future of the newspaper industry (even if I don't share the main conclusions). Entitled "bad news for news", the article is published by the Financial Times and signed by Eli Noam, a well known professor at Columbia University in New York. Please find below the main excerpts of an article I recommend reading.

"Newspapers have been the central medium for politics, culture, and business since the 17th century, but this may be changing... The information industry is becoming among the most unstable of business sectors. In the past these dynamics led to most American cities having only one newspaper, which could therefore charge fairly high prices for advertising and subscriptions to support their editorial costs. But now, another generation of technology undercuts this stability.

... What then can newspapers do? Like other businesses in trouble, they must focus on their core competency, which usually is local information. Cutting costs by cutting local newsroom budgets is therefore myopic.

Second, they must actively plan for a paperless future... Such transitions are gradual; but they are also inexorable. Managing the transition will not be easy. Online and print newspapers depend on each other symbiotically. Print needs online for the future. Online needs print for the present, to subsidise it financially and intellectually.

Third, they must customise. The traditional newspaper provides averaged-out content to a multiplicity of readers. What it needs to do is to serve the increasingly differentiated readers’ particular mix of interests..."

"... Producing such rich news will be complex and expensive. Realistically, no single news organisation will be able to provide the quality and quantity of information needed through its own economic and editorial resources. To gain such diversity of information then, the news organisation will be forced go far beyond its internally produced content. Publishers will have to rely substantially on other sources: traditional syndicated and wire-service content; specialized magazines, trade journals, newsletters, and books; blogs and other community sources; TV news providers; and many free-lance journalists, investigative reporters, pundits, and editors. In short, they will have to become ?virtual.?

This will lead to two archetypes of news organisations: first, specialist content providers - some of them operating from offshore - and similarly specialist marketing, production, and advertising operators. And second, semi-virtual integrators who bundle, pick and choose their content and service elements from these specialists, validate its quality, add some of their own, and shape the overall character of the product.

... The problem for traditional news organisations is that this type of virtual integrator function can also be done by others.... It is not clear what the competitive advantage of established newspapers is in such a virtual model. They are too big for the specialist shop model, and too expensive or low-tech for the integrator model.

... Are people drifting away from news? Not really. What people are drifting away from is paying for news. And that will be hard to reverse beyond the most powerful or specialised of news brands. It?s happened to music, and now it is beginning to happen to newspapers. Yes, the technology will create many new tiny news media. But the overall result will be more media concentration - a lot fewer but more comprehensive mainstream news organisations as the integrator of most information. First, the paper element of their operations is beginning to vanish. And then, the news part, too, will become unsustainable. Today?s newspaper becomes tomorrow?s news-integrator."

Source: Financial Times