Why newspapers are vulnerable, Ctd

ᔥ Harvard Business Review Blog

Justin Fox is looking at the failing model of major newspapers and reasoning that they were doomed all along:

Over the decades, the monopoly dailies saw some signs of trouble: newspaper readership kept declining, and new retailing giants such as Wal-mart often bypassed the papers in delivering ad messages into homes. When the Internet came along in the 1990s, though, they were still big and profitable — and, it turns out, profoundly vulnerable. As the account above should make clear, the challenges that the Internet posed to these newspapers had much less to do with new sources ofnews than new channels of advertising.

If the newspaper companies had been nimble, well-managed organizations (news alert: monopolies usually aren’t) trying to follow Clay Christensen’s playbook for dealing with disruptive innovation, they would have set up separate ventures aimed at exploiting new digital advertising opportunities. Norway’s Schibsted did just that in 1999, and has remained a classified-advertising power. In the U.S., two newspaper chains bought the job site CareerBuilder in 2000 (a third joined them in 2002), and have built it into a successful online/print hybrid.

Not surprisingly, though, the biggest digital advertising successes have been claimed by baggage-free newcomers such as Craigslist and Google. And these digital natives have seen no reason to attach expensive news-gathering operations to their efforts. The Internet has unbundled the various businesses that made up a metro daily newspaper, and there’s no putting them back together again. And since selling news never was a profit center for metro dailies, there’s been no great surge of well-funded digital upstarts clamoring to take over their editorial tasks.