Surviving A Segmenting Market

By Phil Robibero on 11/05/2009

It wasn't so long ago that the news and entertainment business lived a fairly comfortable life. Advertisers paid the tab and people got their information from a limited array of mediums. Alas, the days of no surprises were bound to end with the exponential growth of the web. The internet brought in a new era of instant information, community involvement, and democratization. For media executives the worst part of it all was that it was free.

This new avenue of information delivery undercut traditional business. Companies started to partition more advertising money into the more attractive and cheaper internet space. The media industry was on the fringes and was forced to cut jobs and slash sectors in order to stay solvent. Things looked bad, but the bleak environment was ripe for innovation. The media conglomerates wisely embraced the internet rather than distancing itself from it. Hulu, iPhone applications, and VODs were just some of the recent innovations that put them back in the black. The media industry was able to adapt and capitalize on this new environment.

Not everything has been rosy for all sectors.  Recently, the New York Times reported that newspaper circulation had dipped 10% this year.  The Wall Street Journal was one of the few papers that had an increase in circulation because it included online subscriptions as part of the data.  At this point newspapers are still struggling to adapt.  While, these numbers are telling of the paradigm shift in information consumption, it shouldn't be confused with "the death of the newspaper".  Just as media companies in other sectors have been able to survive, so will newspapers and newspaper reporting.

This "death of..." mantra is a misnomer and does not represent what is actually happening to the print market.  The internet is not replacing the print market but rather it is segmenting it.  Print papers must share more market share so that internet news sites can fit into the pie.  The market is becoming more niche and will eventually be what newspapers will become; a niche product.  

The overheads to develop a newspaper are high and becoming an increasing financial burden for newspapers.  To pay for the costs and cut spending, subscription prices will go up with the possibility of single issue papers being discontinued.  Circulation will continue to go down and newspapers will turn in the same way trade magazines work such as Variety. A high priced subscription based model is the only way to keep the newspaper medium afloat and those who appreciate reading from pulp rather than the screen will buy in.  

Additional Photos: "Newspaper", diabetesnewspaper.com]