Robert Scoble declares newspapers are dead. PaidContent says InfoWorld Magazine is dead. TechMeme has collected lots of blogger stories on the subject. Disrupted maybe...but not dead. Napster disrupted the music business and YouTube is disrupting video. Anything that can be digitized is being disrupted by the Internet.
I wrote about this a year ago in "Are newspapers and magazines dying?" Here is the killer quote from that blog post;
At its peak in 2000, The Mercury News had a Sunday circulation of 326,839 subscribers, according to the newspaper. Last September, the company counted 278,470 Sunday subscribers, a drop of about 15 percent. Revenue from the company's help-wanted ads fell to $18 million a year from more than $118 million, according to the paper. The newsroom was whittled to 280 people from 404, a 30 percent decline.
The music business is dying. Last week we heard the record business is off 20% from last year continuing its 7 year decline. Did Napster kill the music business or is "rap" todays "disco"?
Is Microsoft dying too? I don't think so, in fact Microsoft is growing revenues about $4 Billion per year, on track for $50 Billion this year. But, the software business is certainly changing. Open Source software and advertising supported services like Google are changing the way software is used and paid for. Microsoft is making the transition to ad supported businesses like Live Search, subscription based services like Office Live, and transaction based businesses like Zune music. There is still a big market for traditional software sold by license. The key is to manage the transition and be flexible in pricing models.
Intellectual Property that can be digitized; music, video, news, and software is being disrupted by the Internet. Business models that rely on controlling IP and charging high prices for its use are being challenged by free IP, supported by advertising fees and service contracts.
Business moves in cycles. Nothing lasts forever. The great companies adapt while the average ones fade away and die. The newspaper business is changing and the Internet has dramatically accelerated the evolution. Craigslist, the online classified ad site, was
largely responsible for a contributing factor to the San Jose Mercury News losing $100M in classified revenues. Napster changed the music business forever. YouTube is disrupting the video business. Linux and Open Source is changing the software business.
UPDATE: Craig Newmark, founder of craigslist, is one of the nicest guys you will ever meet. He is a humble guy who lives by the motto "give everyone a break" and that is the whole idea of craigslist. It was never his intention to hurt the classified ad revenues of the newspapers, and I know he feels badly that craigslist may have had that unintended consequence.
Evolution or extinction? Some businesses are totally destroyed and replaced by new alternatives. The internal combustion engine rendered the steam engine obsolete. The automobile replaced horses. Music, video, news, and software are not going away. But the usage model and business models are quickly changing. The Innovators Dilemma explains why entrenched market leaders usually fail to make the transition to the new technology and business models.
Giants die hard. As hard as it is to build a start-up company from nothing, it is even harder to kill a giant business. IBM, Ford, Goodyear, and many other American business icons are not the giants they once were but they are still players. New leaders will emerge. Music, video, news, and software is not dead, but history tells us the entrenched market leaders will not survive even though there is plenty of time to make the necessary changes. It is just the natural order of life and business.