Publishing newspapers with fewer pages and moving from daily to less frequently is not going to save that industry. Record labels thinking that they're going to save themselves by releasing fewer CDs every year are kidding themselves as well.
They created this demand from the public, and it's going to be a hard habit to break.
Today was another rough day for the media. Tribune Inc., the publisher of the Chicago Tribune and the Los Angeles Times (they also own some other newspapers and several television stations) declared bankruptcy. This news comes hot on the heels of last week's announcement from Gannett - the largest newspaper publisher in the U.S. and the parent company of USA Today - that they are laying off more than 600 employees across its 85 daily papers.
Some might think it is way too late for that industry to save itself. Some say that these companies are going to have to come up with more innovative ways of delivering the news. How are these companies expected to grow record profits from publishing less pages, less frequently? The train of thought around this strategy is that they will be able to charge a lot more per copy and fill the fewer pages with more valuable and unique content. Do you really think that the more voracious news junkies are going to pay more for something smaller that is delivered less frequently? Do the publishers really think that this specific segment will be more profitable than their current one?
Cutting costs is not revenue generation.
The first thing any major corporation does in a scenario like this is cost cutting. They think that by trying to do the same things they have always done with less people and resources is going to change their current situation. This creates a vicious downward spiral. Instead, there needs to be a more serious focus on figuring out either an entirely new business model or what they can realistically expect in terms of profits by keeping the status quo or subtracting from it.
The Pulitzer Prizes (the awards for journalism, literature and musical composition) announced today that it will consider entries from online-only publications (do they have much of a choice?).
The music industry has been making similar moves, and it won't be long before other industries try the same thing. They're going to cut the amount of product they put into the marketplace as they cut staff and mask it with a PR spin like, "this will give us the ability to focus more attention on the more meaningful projects."
The other side is to embrace the digital world. It's hard to fault some of the publishing and music companies here. The problem is, we're probably kidding ourselves if we think that by embracing Twitter, Blogs and MySpace, that these two industries are going to be able to change much or find the record profits they were realizing in the days before the Internet changed everything we know about the news, journalism and how information spreads.
One thing is for certain: the current model for online advertising is not sustainable.
There is simply going to be way too much inventory with not enough interested advertisers. The future of media online is not going to be from generating revenues from selling a banner ad on top of their content. It's going to have to get a lot more targeted, relevant and interactive to both the consumer and the advertiser. It's going to have to move away from the current style of banner and display advertising. It's not something obvious, and it's going to be something that both publishers and advertisers are going to have to work very hard at together if they both want to have a sustainable future.
Do you believe that their current strategy of "less is more" is going to return the same kinds of dividends for them?