The blogosphere is aflutter with the woes of the newspaper industry. I think most papers won’t make it, with the printed newspaper becoming as quaint as home milk delivery.
Newspapers are really in two different businesses that got fused together: content and distribution.
The Internet is replacing proprietary distribution (i.e. printing newspapers). The content side can’t stand alone because of increasing non-newspaper competition, and (I suspect) value subsidy from their proprietary distribution (e.g. what you paid for getting the news at your doorstep was subsidizing the newsroom).
Remember AOL: the Internet killed the dialup business, and they didn’t shift content fast enough to be compelling without a captive dialup user base.
Cable companies & TV networks are next: as bandwidths increase, users are starting to get their video on-line, instead of through proprietary cable and TV networks. Over time, the “cable networks” will feel like the old TELNET network, and get disconnected like copper phone lines.
What’s the next business to have a proprietary distribution model blown up by the Internet?
i dont disagree with your points but maybe you missed the bioggest point of all — what killed newspapers was simple: craigslist
for decades and decades, classified ads were the huge franchise-underwriting cash cow to end all cash cows. imagine the revenue per page! and no news or reportage at all on the page!
take away that firehose of free cash flow and newspapers were dooomed
its no surprise that the two newspapers arguably the strongest now (if any can be said to still be strong) are NYTimes and WallStJournal — the two papers that never had classified ads.
as for the inevitable transfer of video viewing onto TCP/IP networks, well, its easy enough to say that’s true. because it is. but the pace and timing of the ultimate switch is, i think, grossly exaggerated in the blogosphere and digerati media. according to recent studies, plain old TV viewing still wildly — wildly — dominates peoples media consumytopn habits (literally dwarfing TCP/IP video consumption. moreover, plain old TV viewing time has INCREASED in the last few years, despite the small but staedy growth of TCP/IP video viewing………
Steve: thanks for the thoughts.
I agree with you on the pace and timing of switch to video. When we started Open Market in ’94, we worked out a pretty clear picture of how eCommerce was going to evolve.
We were mostly right, except for predictions on timing, which were probably off by a factor of 3-5x. I’d say it took a solid decade (1994-2004) for eCommerce to become a material sales channel. And even so, here today, most commerce is still offline.
I’d bet on a similar timeline for Internet video: probably 7-10 years for it to become “material”, relative to existing video/TV consumption.