
In this final part, economics plays the prime role. In our image is a small bank of street newspaper boxes. Not so long ago there was the regular dailies also in this group. You can see the scratch marks of an absent box on the concrete to the left of the nearest (Now Mag) box.
One of the most important influences on the physical circulation is the increasing use of the internet as the primary source of news information. Most newspapers use revenues from the print media revenues to sustain the online version of their news papers.
The challenge is that most newspapers do not understand or appreciate the power of the internet. First it is growing. Second, it is not going away. Third the revenues of generated by the online is not as lucrative per story as the old style print media was.
News papers and news letters are not going to disappear completely but clearly they are going to have to change their format, their information resources and their revenue models to survive. A lot of papers are contemplating turning their online sites to pay sites. It has been tried before. And it has not worked, nor will it work in the future.
Revenues over the internet can only be generated by the numbers of people seeing their stories. Ad revenues depend on the numbers of hits. This is not all that much different in the print media. Advertising rates depend on the numbers of subscriptions per day. It depends on the numbers of eyes that see the page.
The downside of print media is that circulation is an arbitrary number. While online pages and sites clearly get statistics far more precise. One only has to log the numbers of visits or hits to the page in order to determine a rate.
Another challenge to the print media is the ability to gather content. Good journalistic type of sites or printed publishings depend on content. In recent decades, accountants moved to control media companies and the journalistic side of the control of print media has drastically declined.
Bean counters only envisage the area devoted to commercial ads. Ads have become more important to newspapers than the news content than ever before.
Compounded with this is the price of printing. While paper companies are awash in inventory the price of newsprint has not declined. The solution the paper makers use is to close mills to maintain the price.
If you look at the newspaper like the Toronto Sun over the years, the size of the paper has slowly gotten smaller, the advertising content has shot over 60% ad printing, the vendor price of each copy went up. The latter has shed readership. With the delines in readership, ad revenues decrease. Its a vicious cycle with no upside.
Within the next five years in the City of Toronto, two of the three major daily newspapers will close print production due to the costs of printing. News publishers are locked into a vicious decline into a model. They rarely notice that search engines like Google assemble the stories and gather them into a set of links providing readers with a option of which version to study.
So when the traditional news media tries to impose a subscription price, search engines like Google can provide a choice of sources for the same information. At least one of those sources will provide the same story for free. The free link gets more hits and more ad revenues while the priced links decline and get less ad revenue.
What the traditional news media must return to is what was their strength which was the skill of their reporters and writers. So many of these people got laid off, and now work on the internet. Ouch.