Many Europeans are used to generous benefits from the government, benefits that are now unsustainable in an era of cheap foreign goods. Newspapers are used to generous profits from advertisers, profits that are now unsustainable in an era of websites like Craigslist. The result of this irrational subsidization is a public used to getting things for free, things that wouldn’t be free in a truely free market.
The EU constitution is being rejected for a lot of reasons; poor leadership, stench of elitism, fear of American capitalism. The last reason is the same type of problem facing the newspaper industry. We want our news cheap not because we think information should always be free as in beer but because newspapers prices have always been low due to the advertising subsidy. Advertisers have always just had to take publishers on their word that their distribution numbers weren’t inflated (think about all of those small newspapers thrown at houses that nobody reads, they’re there to get ad dollars).
So the challenge for the newspaper business and much of Europe is to figure out how to get people to forget what they know and re-examine the value of information and of costly benefits. It seems pretty clear that in the next 10 years as the Internet gets faster and HD video camera prices plummet that the amount of content is going to explode. Most of that content will be low quality, some of it will be better than anything we’ve ever seen. So the role of the newspaper is to provide a way to avoid all of that newfound crud. Google news can’t do it yet, Blogdex can. A successful newspaper of the future is going to have a bigger op-ed section filled with the latest, highest ranked opinions found on Blogdex.net. Maybe the entire paper version of the paper goes op-ed. Why print real news if it’s just going to be outdated and lack animations and videos compared to the web? Internet aggregation on paper. Mmmm, just had a business idea.
I use the term “irrational subsidization” because the newspaper business of old was dysfunctional due to two factors.
- Advertisers had no way of really knowing how effective their ads were other than from informal surveys nobody fills out “mention this ad”. Compare that with Google’s Adsense. Night and day.
- The other more obvious reason is the lack of an Internet which enabled wealth to buy public perception and therefore power. If you owned the media business you could start wars, take out politicians, businesses, etc. The big theme I’m seeing is this: Money can’t buy power like it used to, maybe we’ll have to re-examine what that means for the wealth divide and progressive taxation.