Has the Internet killed newspapers, magazines, music and video?

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.

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Comments

[Craig Newmark]

Don, please help us out, please don't use the wildly exaggerated numbers regarding craigslist and anyone else.

Thanks!

Craig

[Mukund Mohan]

Don
Here is a kicker. When a few leading "newspaper" execs were asked the value of creating an engaged online community the ONLY thing they came up with was

"I guess getting more content from the community could 'help' a newspaper's bottom line by allowing them to get rid of news staff."

http://bestengagingcommunities.com/2007/03/25/media-and-communities-does-rise-of-community-and-social-media-mean-end-of-journalism.aspx

[Juha]

Since "Internet news" offers a multitude of reports on just about any event in a fast and convenient format well... why would anyone with a network connection turn to print for that purpose?

There's the deadline issue too: print takes longer to produce than online. Also, once it's out, you can't do follow-ups to published stories as they develop which is easy on the web.

Longer articles is a different kettle of fish, of course, and I think they will survive the present print cataclysm. That is, until technology like "digital paper" comes along.

My sympathies are with the often very good and dedicated journalists who are getting caught in this technological crossfire, and not the media barons who couldn't care less about readers or the quality of the output, and thus to some extent are responsible for their own demise. Readers aren't idiots, even if the media barons would like that to be the case.

[Doug Karr]

That's like asking "Have automobiles killed the horse, the stage, and the horse-drawn carriage?"

Who cares if the medium dies? We're still getting what we need and we're getting it faster and cheaper.

[Danial Jameel]

That is a very interesting point and one that has been prevalent for several years now. However there is one important thing which needs to be understood and when we talk about newspaper and magazines we have to define its content aswell.
The print media even before the threat of the internet has been going through drastic changes. People were moving away from citizen related information towards Consumer related ones. Time magazine which at one time would not even consider celebrity news had started including such content on it's cover page. Today, Reporters who cover war stories are paid far less than a paparazzi taking a picture of Angelina Jolie's latest affair (it is sad but true). The underlying cause of this trend was not the magazines themselves but the demand of individuals which moved towards mass consumerism.
With the advent of the internet and web2.0, the trends again seem to have changed as individuals have found new avenues to discuss and find content information. Partly to blame is ofcourse the print media itself as most magazines recently are more about glamour and glitz than quality content. The other part ofcourse is the demand by individuals, the internet offers a more interactive way of sharing information and as the web penentrates more globally we will see this trend increasing. Magazines and newspaper have been and still are an essential part of human society. We are curious creatures and information is something we all thirst for since childhood. The print industry was a direct byproduct to fill this need. In the end the medium may change but the flow of information and hopefully knowledge will continue to spread.

Personally I believe The news media on their part should consider the following measures:

1) Provide more than just news content on their websites. Attempt to develop a community. New updates on Reuters, ABC etc are a good start. Allowing Journalists to blog is also a step in the right direction

2) Stop competing on the web arena and actually collaborate online. It might sound strange but having one platform to direct all online users would be much more effective than diverting users here and there. This unfortunately will never happen as such a thing is not present in the DNA of the print industry.

3) Start taking some risks. They have the brand name which gives them an edge over new competitors.

4) Start thinking globally for online content. Reuters and BBC are doing a great job but they need to have more international interactions on their website. It's one thing to send an American to cover a story but entirely different to have local journalists and individuals tell their stories aswell.

5) Maintain values. Alot of big tech-bloggers today consider video, blogs and portals to be the most important aspects online today but I believe that values such as Trust and Honesty rank a little higher than distribution mediums and will continue to play an important role in the coming years.

I will be trying to address some of these issues in my upcoming project www.UReporting.com . Let's see how it works out :)

[Robert Gorell]

Interesting post, Don. We mentioned it today on Blog Buzz.

http://www.webmasterradio.fm/episodes/index.php?showId=56

Newspapers are not "dying" (although it's very fun to say that stuff is). Newspapers are being scaled back in order to progress online. Which, although disruptive, may not be a bad thing so long as the newspaper organizations themselves remain profitable. We need them. Without newspapers, we're at a loss for serious journalism. After all, where would other bloggers get their credible news? From other bloggers?

Of course, that DOES happen, but it's still more opinion-driven. Speaking of which, I recently wrote about Warren Buffett's stance on the "death" of newspapers.

http://www.grokdotcom.com/2007/03/07/newspapers-black-white-and-red-all-over/

It's funny you should ask whether rap is today's disco. Commercialism heavily transformed both genres in serious ways. Suddenly, KISS did a "disco" record, much in the same way that rap-rock bands today promote themselves off of borrowed nostalgia and erroneous "street cred." Such is the state of pop music...

What's the punchline? Disco still exists. So does hip-hop (or "rap," although that does date you ;) It's just evolved into techno and house music--both of which are huge elsewhere in the world and are not being sold properly online or played on the radio in the US. In other words, there are plenty of famous techno and house musicians from America who are huge abroad, but you'd never know it since there is no viable long tail music sales platform.

It's a DISTRIBUTION problem.

Thanks again for the great food for thought!

[DonDodge]

Thanks for the thoughtful comments. Declaring "newspapers are dead", as Scoble did, makes for great headlines, but the truth is newspapers and all Intellectual Property is being disrupted by the Internet. Dead? no. Disrupted? yes.

My point is to step back and look at the larger picture, not just focus on newspapers problems or magazines in the case of Infoworld, but to look at all forms of Intelectual Property that can be digitized and distributed on the Internet. Music, video, newspapers, magazines, and even software, is being disrupted.

You are correct that distribution methods and costs are one of the problems. People still want music, video, and news, but they are getting it from different distribution channels (Internet) that have very different cost structures and business models.

There is plenty of time for the big music labels, film studios, and newspaper chains to react and evolve. The smart ones have already started, the rest will cling to their standard business for as long as possible and slowly go down hill.

The music industry has a long history of selling one or two good songs on a CD for $20. Consumers had no choice but to take the junk with the good songs. Now consumers can buy singles on the Internet and that has radically changed the economics of the music business. Now it is the record labels that have no choice but to adapt.

As part of the Napster team back in 2000 I am proud to have played a small part in the transformation of the music business to provide choice for consumers.

The same transformations are rippling across all IP businesses today...including software.

[american singles online]

After another few months, I still don't think the Internet will kill 100 years of culture overnight, as more and more people work with computers all day, obviously, after work, they would not like to sit in front of the Internet for entertainment anymore. Anyone has experienced with a good set of speakers will certainly know the different between the quality of music and sound...replace it with Internet music or mp3, I don't think so.