The days of scoring record profits - year on year - for traditional publishers may be coming to an end. It doesn't mean that they will not make any money. It just means that they will make a lot less money than what they anticipated.
There's nothing new in saying that. Countless Blog posts, magazine articles and newspaper pieces have been written about the death of the newspaper (with the magazine industry playing a close second). Smart and engaging media pundits like Jeff Jarvis and Jay Rosen have built their professional careers on deconstructing the new state of affaires when it comes to the publishing industry (I've given my own perspective on it in this space on numerous occasions). There are many mitigating factors as to why this shift is happening and the Internet is not the lone culprit. Everything from innovation to indignation on the part of the publishers have played key roles in the current dismantling of how the masses consume news. The truth is that you can blame the overall decline in people reading print as much as you can blame the Internet for the shifting landscape.
The bottom line is that the traditional media publishers have given the majority of their content away for free online for so long that their ability to turn it into a pay model is a tragically long shot.
That reality was driven home on September 25th, 2009 when Silicon Valley Insider - Business Insider published the news item, People Won't Pay For News Online. As part of their "Chart of Day," here's what they stated:
"Asked what they would do if their favorite news site suddenly began charging, 74% of respondents said they would 'find another free site,' according to a Harris Interactive study commissioned by PaidContent UK. Only 5% said they'd pay to continue reading... We wonder if studies like this will put any kind of damper on Rupert Murdoch's plans to charge for access to much more of News Corp's online news and entertainment content - from celebrity pics to the Wall Street Journal."
What's left to figure out is how big of a market that 5% is.
It seems to be the one major part of the equation that no one wants to really look at or acknowledge. That 5% (which could be more) may well be a significant amount of money for new publishers... and that's the point. No traditional publisher is going to stand up in front of their shareholders and say, "well, we made 52 million dollars last year, but because there are simply fewer people willing to pay for the news, we're only going to make 15 million next year," with smiles on their faces. That being said, for many new media publishers that 15 million might be more than enough to keep a newsroom gainfully employed with profits to spare.
Are traditional media publishers ready to make a lot of money, even if it is a lot less money than they are used to?