Dave Morgan, the founder of Tacoda spoke at an IAB Mexico event back in September and one of his comments keeps resonating with me. I often discuss this statistic with friends. He said that on average, newspaper costs are increasing 4 percent per year while newspaper revenues are decreasing 6 percent per year (in the United States). Increases in printing, delivery (i.e. petroleum), and labor are driving costs up for US newspapers. Services like Craig’s List, eBay, and Monster are stealing classified revenue from newspapers. And in general, media buyers are moving their budgets to more measurable media like the Internet. So, in about 3 years, those two lines will cross. While these averages indicate a radical change in the media business in three years, the biggest newspapers like the NY Times, USA Today, and the Wall Street Journal are showing flat or single digit percentage growth and are aggressively working to survive and transition their businesses to the digital side. So, behind all of the numbers, the smaller newspapers are most likely hurting the most and probably showing much larger decreases in revenue. How ironic. We live in the age of the long tail where bloggers voices are flourishing and yet the smallest newspapers (who are farthest down the long tail graph) are most likely going to disappear. Ultimately, many community newspapers will disappear and with them many community voices. Which newspapers will transition their businesses to digital platforms successfully and how? Could newspapers transition to become online blogging collectives?In the end, consumers will dictate what media they want and ultimately how media companies serve smaller markets. Young readers read fewer newspapers today than their counterparts did 20 years ago, if any. They turn to the Internet for their news and information. Can local media companies survive or will only the biggest newspaper/Internet brands be the news providers?
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