Saving Community Journalism: The Path to Profitability

Saving Community Journalism: The Path to Profitability

Saving Community Journalism: The Path to Profitability

Saving Community Journalism: The Path to Profitability

Excerpt

It has been a little less than two decades since the Internet revolution began, and yet the change to the news landscape—and the business model that supported it—has been seismic. In the 1930s, economist Joseph Schumpeter coined the term “creative destruction” to describe how a new technology makes one industry obsolete while creating the opportunity for another to subsume or replace it—which is exactly what is occurring in the news business today. In purely economic terms, resources flow away from the aging industry (in this case, newspapers) to a vibrant successor or successors (search engines, social networks, blogs, or portals). Something of an optimist, Schumpeter believed that creative destruction was capitalism’s way of “reshuffling the deck” and renewing itself.

The recent experience of other industries that have faced creative destruction—from software companies to financial service providers—leads to this unmistakable conclusion: newspapers, both large and small, need to re-create themselves for the twenty-first century. If they do not develop a plan for confronting and accommodating today’s very intrusive and disruptive technological innovations, they risk being lost in the “reshuffling of the deck” and going the way of black-and-white motion pictures and other outdated media forms, consigned to the periphery with severely diminished prestige, influence, and profitability.

Newspapers, of course, differ from other industries in two ways: their traditional business model and their historic mission. In contrast to other manufacturing or retail industries, which make a profit by selling directly to customers, newspapers have traditionally acquired readers at “below the cost” of producing a paper and then made a profit by selling access to these readers to local advertisers.

Because the creative destruction wrought by the Internet has undermined the traditional business model of news organizations by siphoning off both readers and advertisers, the critical and unique historic mission of . . .

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