Little more than a glance at the new economics of news

Strange to see Scout Analytics' latest infographic on the disparity between online and print news revenues getting so much coverage. It's obviously true, but it's also just a fairly superficial restatement of a small subset of the known facts.

Is online news worth less than offline news because less time is spent reading it (both absolutely and relatively), because of anchoring at "free" and because of commoditised online ad rates? Well...sort of. Partly. It's true as far as it goes.

First, this isn't about news.

Newspapers didn't make money because they reported the news. That reporting the news happened to be the way newspapers attracted a mass audience they could then resell to advertisers is closer to the truth, and of course the news itself wasn't ever the commercial sweet-spot; that was local classified ads, which long ago moved decisively online.

Second, newspapers were so profitable because they operated a gateway monopoly; one of the only ways for advertisers to reach an informed, affluent, mass audience in each city. That online display ads are running at commodity prices is an effect, not a cause, of the transformation wrought on that monopoly by the web. Now advertisers can reach the old newspaper-reading audience across thousands of different sites the power of suppliers to dictate price has gone.

And finally...digital has exploded media, fragmented it, turned albums into tracks and cable subscriptions into episodes and bundled newspapers into individual stories. Music has done, finally, a reasonable job of dealing with the commercial reality of that fragmentation. TV is still denying it (see Forrester's now six-year old Kubler-Ross paper for a brilliant analysis of what's going on there). News has still to even accept what has happened. No publisher is making any concerted effort to monetise their news output at the level of the fragment or the individual story. Publishers are still trying to drag readers back to a central site to show them ads (or in a handful of cases building subscription paywalls), in both cases clinging to the model of monetising a bundle that digital has utterly and decisively unbundled.