Journalism and technology

The newspaper industry is a declining industry across the world. After the arrival of the internet, newspaper circulations have plummeted and many of the well-known names are struggling. This is when the ‘product’ of newspapers can reach a much wider audience with technology. So what explains this anomaly? I think there are several reasons — Disintermediation, increased reach and ease of replication.

Newspapers were the intermediaries or the gatekeepers (as Amit Varma says) of the content. They were the only way a reporter or a writer could reach the audience as the cost of production was very high. Also newspapers was one of the only ways to reach the masses (along with TV/radio). So they were intermediaries for the advertisers as well. Technology enabled reporters/writers to directly reach their audience through Substack and other social media. Targeted advertising using Google/Facebook also made newspapers redundant as intermediaries. This disintermediation is one of the main reasons for the problems faced by advertisers.

Technology increased the reach for all newspapers, which proved detrimental to the smaller newspapers in small towns/cities. Smaller newspapers, irrespective of their quality, had a captive audience. For a reader in a small town, there was no way to get large newspapers such as NYT or Washington Post. Technology gave access to the top content for the readers in even the remotest part of the world. So the weak, smaller newspapers were weeded out. In spite of the wider reach, the larger newspapers could not translate it into higher revenue for the reason mentioned above as well as because of zero marginal cost of production.

Technology enabled content to be forwarded or shared easily at zero cost. Ideally this should translate to high profits similar to the software industry. But similar to the challenge faced by Music industry due to Napster, newspapers have not been able to monetize the increased reach.

Considering this, will subscription model be the future for the newspapers? Or the whole news industry will become decentralized with citizen journalists breaking the news and opinion writers sharing pieces on Substact? I would still bet on the first option as the readers would still prefer some organization providing credibility.