Newspapers Aren’t Doomed; It’s Their Business Models

I read an interesting – if somewhat out there post by Henry Blodget over the the weekend in which he calculated what the New York Times’ finances would look like if offline business disappeared – second-quarter revenue down 40% to 50% and a EBITDA loss of $64-million.

It’s certainly an entertainment read with some thought-provoking ideas but the concept Blodget seems have missed is newspapers don’t appear to be disappearing any time soon. The reality is millions of people are still reading newspapers, while total newspaper circulations is being buoyed by the growing popularity of the free dailies such as Metro.

My theory is newspapers continue to be an efficient, convenient and inexpensive vehicle to consume information – much like books have maintained a place in the media landscape even though “superior” technology such as e-Books have been trying to seduce readers for years. Think about how easy it was going through dozens of stories in yesterday’s New York Times versus the much effort involved to browse through the same number of stories online.

Right now, newspapers are a better consumption tool, although some people will argue that more user-friendly RSS tools could change this situation by personalizing content delivery. As well, the future of how newspapers, magazines, books (and photos) are presented and consumed could be turned upside down by technology such as Microsoft Photosynth, which has huge potential to radically change how people access and read information online. (For more about Photosynth, check out Blaise Aguera y Arcas’ video presentation at TED2007.

If you let your imagination run wild with the idea of Photosynth (and you need to watch the video to grasp this idea), the Web could begin to replicate the offline newspaper experience by giving readers the same kind of consumption experience. Rather than forcing you to click around a Web site (and even the most well-designed are still far from navigation-friendly), Photosynth – based on the TED demo – could let you browse through an online newspaper in much the same way as a paper-newspaper. That would be both cool and useful.

Of course, even if the technology to consume newspapers becomes easier/better, newspaper publishers still have to change the economics of how they operate. The silver lining, however, they could still have paper-based newspapers as part of their portfolios…along with the Web, blogs, podcasts, video, etc.