July 10, 2012

The future of traditional newspapers according to different experts

Going desperate
More and more traditional newspapers are struggling for their survival. Most of them are not making as much money from their websites as they would like, and the revenues from the physical newspapers are shrinking since more people are reading the same content for free on the web. The result is that the newspapers each day are getting more and more desperate.

One example of a desperate attempt to make more money comes from Dagens Industri - Sweden's largest business newspaper. They redesigned their website and came up with the brilliant idea to cover 40 percent of the screen with ads, as you can see in the picture below. I don't have any problems with large ads, but this ad doesn't move up when you scroll down the screen - it always covers 40 percent of the screen - so it's impossible to read the articles. Will they really make more money when the users can't consume the articles?

Going local
One investor who believes in the future of newspapers is Warren Buffett. He purchased The Buffalo News in 1977, and has recently purchased another 26 newspapers. Warren Buffett loves newspapers, he used to deliver them when he was a young boy to create the basic foundation for the empire he has today, and he reads five newspapers each day. He doesn't believe in the future of all newspapers, only on those who cover what's going on locally in the city where the newspapers are operating. Technological change has caused that newspapers can't anymore cover areas such as national news, national sports, stock quotations, and employment opportunities. They can only cover what's going on locally if they at the same time would like to be profitable.

Another Warren who also believes in the future of newspapers is Warren Stephens - the 442nd richest man in the world. He believes in the future of professional journalists - not the amateur journalists as in bloggers blogging while wearing a pajamas. The expertise of the professional journalists should be worth something in the future since they are the ones who decides what's going to be published in the newspapers, and what's not going to be published. As Warren Buffett, he also believes in the newspapers that act locally. To make more money, Warren Stephens says that newspapers should remove their free content from the web and let only those who have a subscription to the physical paper be able to access it. One should also be able to buy a subscription of the content available on the Internet for a smaller amount of money.

Going global
So if traditional newspapers are going locally, who's going to cover what's going on globally? One of the latest fast growing companies delivering business news is Business Insider - a company you either love or hate. The idea behind Business Insider is to use creative headlines that people can't resist to click on, such as: "We Just Found Out That Millipedes Don't Have 1,000 Legs". They are also writing short news stories, which might be a good idea since people don't always have the time to consume long articles.

Magazines, not newspapers, are actually growing, and more new magazines were launched than closed in 2011. Magazine audience are growing faster than those for television or newspapers. The reason is that articles from magazines are longer-lasting and the readers are identifying themselves closely with the magazines they read. People might also be motivated to pay for the online content from magazines through apps - compared with the news from regular newspapers.

Social news sites such as Digg, Reddit, and Trejdify, might be able to deliver global news in the future when the traditional newspapers are going local. They might be able to aggregate the different stories from the local newspapers and turn it into a global newspaper with aggregated local content.
One of the problems with these news aggregators is that they consists of a crowd, and people in a crowd tend to believe in one thing and this thing becomes almost like a bubble. If someone submits a link with a different point of view, the people in the crowd will probably not vote on that link. Google has a similar problem. The most popular link on Google is the first link - but is the most popular link always the best link?
The bubbles existing in these news aggregators and in Google tend to overlap and intersect. The common view tend to change over time. The members of the crowd are becoming more exposed to new ideas and are often leading the way to a new point of view - before they who are not using the news aggregator. Common media such as regular newspapers are slower since a couple of journalists can't compete with a big crowd. Reddit is the largest social news website and they have like 3 billion viewers each month - how can a regular newspaper compete with that?

Going away
The article "Avoid News - Towards a Healthy News Diet" is written by Rolf Dobelli and the essence of the article is that we as humans are not designed for the types of news we often receive from television and regular newspapers.
"...most of us do not yet understand that news is to the mind what sugar is to the body. News is easy to digest. The media feeds us small bites of trivial matter, tidbits that don’t really concern our lives and don’t require thinking."
This is also the reason to why online newspapers like Business Insider is working. The news items from them is like a candy store where the candy is free, and most of us can't stop from eating the free candy. JP Rangaswami talked about this in his Ted-talk and came to the conclusion that we should treat information like food. Is it really healthy to eat all the free candy?

A short summary of the article by Rolf Dobelli:
  1. News misleads us systematically. Media focus on terrorists when chronic stress is more dangerous
  2. News is irrelevant. If you avoid news and something important happens - you will probably hear about it anyway
  3. News limits understanding. The facts behind the news are not important - what we need to understand is why something has happened - and it is hard to find out exactly why something has happened
  4. News is toxic to your body. We become more nervous by reading panic headlines
  5. News massively increases cognitive errors. "Terrorists are dangerous" when driving a car is more dangerous
  6. News inhibits thinking. News pieces are specifically engineered to interrupt you
  7. News changes the structure of your brain. When we have found an interesting news piece, we can't concentrate unless we read more about the news piece
  8. News is costly. If we don't need news pieces - why are we wasting our time reading them - when we could do something more productive?
  9. News sunders the relationship between reputation and achievement. The people you watch on television are not always the people who have contributed most to our society
  10. News is produced by journalists. Most of the journalists are copying each other
  11. Reported facts are sometimes wrong, forecasts always. Many news stories include predictions, but you can't predict anything in a complex world
  12. News is manipulative. Journalists are not always independent
  13. News makes us passive. We sometimes get depressed by reading about things we can't influence
  14. News gives us the illusion of caring. 
  15. News kills creativity. Some people may not become entrepreneurs because they have read somewhere that 9 out of 10 companies fails
The conclusion is that we don't need all available news items, we only need the best news items:
"Society needs journalism – but in a different way. Investigative journalism is relevant in any society. We need more hard-core journalists digging into meaningful stories."