A ways back my father did some very interesting economic research into what happened to the price of drugs when a generic entered a market previously owned only by branded drugs. His findings? The entry of generics actually caused prices of brand prescriptions to rise as people who insisted on the branded prescription were willing to pay a higher price. I was reminded of that research in reading today about the continuing decline in circulation of the big papers. The only one that managed a circulation gain was the Wall Street Journal. The hand wringing continues over this horrible state -- but this is a sign to the papers to make lemonade rather than lemons.
At Piqqem.com, newspaper stock sentiment is about as bad as it can get with all stocks showing bearish sentiment except for McClatchy which is only moderately bearish. The big guns, New York Times (NYS: NYT), and Gannett (NYS: GCI) are both showing very negative crowd sentiment.
So what should the newspapers do to fix the problem of declining circulation? They should accelerate that decline by raising subscription prices substantially, perhaps by 30% of so. This would separate the wheat from the chaff among subscribers, allowing newspaper advertising sales teams to definitely state that these readers really want a newspaper experience and they are willing to pay a premium for it.
Such a move would also force newspaper editorial teams to move away from commodity content (earnings reports, going through the motions journalism, etc) and focus only things that are unique and exclusive -- a much harder task, but one that will bear fruit over the long haul by reestablishing the papers as journalism powerhouses.
The reality is, 70% to 80% of what appears even in the top newspapers could easily be found elsewhere online in multiple sources. Very knowledgeable bloggers in a variety of topics can offer commentary that is often superior to that of the newspaper reporters. These two types of news articles are therefore of little to no value anymore. Charge a higher price and force the papers to perform, force the readers to choose, then re-size the business model to fit the new reality.
Alex Salkever is Director of Research at Piqqem.com, a stock sentiment measurement and voting site. He currently subscribers to two newspaper print editions.











Reader Comments (Page 1 of 1)
4-27-2009 @ 6:22PM
MyKisa said...
finally newspapers report the truth...people are not reading their rags as before
4-27-2009 @ 6:36PM
DICK JENSEN said...
COULD IT BE THAT NEWSPAPERS ARE SO BUSY BEING BIAS THAT PEOPLE FIQURED OUT THEY WERN'T GETTING THE REAL NEWS? THE SAME THING IS HAPPENING TO TV NETWORK NEWS. WHO UIS GOING TO REPORT THE LIES? MAYBE PEOPLE WILL START THINKING FOR THEMSELVES.
4-28-2009 @ 9:05AM
Monty said...
The biggest problem with the newspapers is there is no longer any "news" in them. Super shallow reporting on a VERY limited number of topics (usually the local crime reports) and mountains of ads. Newspapers have to realize that people will buy and read them only if they percieve VALUE...and most of us don't anymore.
4-27-2009 @ 7:31PM
justjayne said...
The Wall St. Journal actually increased slightly in circ. One of the very few that is not a left wing hide all the news unless it helps promote socialism, papers.
4-27-2009 @ 8:21PM
Mr. Freeman said...
I used to subscribe to the New Olreans Times-Picayune. They endorsed Barack Obama. I canceled my subscription. Simple.
4-27-2009 @ 10:04PM
Meanstr said...
Who.s Kidding Who,The way most people are today sitting down to read a newspaper is boring, they must be doing something.I would even bet that most people who watch news on Tv are over Fourty.
4-27-2009 @ 10:06PM
JOYCE1812VA said...
I am one who still LOVES to read the newspaper. the internet, the tv, and radio only give the surface of the stories. who has time to watch tv with the more in-depth news? The newspaper offers all that is wanted and needed.
Newspapers are dying. It is a shame we are losing the newspapers all over the USA. Here in VA, the Richmond Times Dispatch is the big daddy of newspapers. Sadly though the DAILY RTD has increased to One Dollar. If you want the weekly tv guide which is in the Saturday paper, tack on another 50 cents.
I have been reading the Richmond Times dispatch for over 40 years, yet with the increase of price, this reader relies on reading a cast off paper in the afternoon at work.
There is nothing more enjoyable than reading the morning news with a mug of hot coffee. I just cannot get into reading the newspaper online.
Then again I am an avid book reader and will not and do not listen to books on tape. Call me old, call me a fuddy-duddy, but the comfort of reading a newspaper cannot be replaced by online news, let alone tv news.
4-27-2009 @ 10:12PM
Allen Kephart said...
I think the problem is that a lot of people are reading and getting their news online. In a way, the newspapers are stabbing themselves in the back because many of the same articles in the newspapers can be read on the newspaper sites.
4-27-2009 @ 10:26PM
pphleabis said...
I disagree. I have subscribed to the WSJ for over a decade. Six weeks ago they raised my subscription rate from $22.00 a month to more than $31.00 a month. I cancelled. They called back four weeks later and offered a subscription for $8.25 a month. I knew they would. I am loyal and felt betrayed by the rate increase. Offer discounts to loyal customers, don't gouge the people who's loyalty built your business.
4-27-2009 @ 11:58PM
Metropolis Daily Pla-nuts said...
"Very knowledgeable bloggers in a variety of topics can offer commentary that is often superior to that of the newspaper reporters." Yeah, like the half-wit right-wing nuts on this message board!
5-03-2009 @ 1:13AM
William Bischoff said...
I have always enjoyed having a newspaper delivered to my home. I may not ALWAYS read it
on the day I get it, but I can go back and "catch up" when I have the time to do so. I love it when there are papers representing BOTH political parties in the cities in which I live. I love the classifieds. Getting the local birth, death and marriage announcements in a hard form allows me to fill in some of my genealogy research with the actual confirmation and details from the newspaper. The ONLY PROBLEM I have had recently is the cost of getting the paper delivered. I have had to stop my subscription and buy individual papers when I can. I hope NONE OF THE NATIONS BIG PAPERS CLOSE.
4-28-2009 @ 5:42AM
paul said...
My local rag cut back on content to save newsprint. Big time. The one thing they didn't cut back was the sports section. since the big cut-back the sports section has been a minimum of 6 pages and a maximum of 10 pages. I am not a sports fan. nevertheless I perused the content and found tables and lists of scores,standings, etc. with fonts so small I couldn't read them. I wouldn't care about 3 pages but 6 to 10 pages is dumb to say the least.
4-28-2009 @ 7:55AM
Ron said...
The News-Press in Ft Myers had become so negative and sensationalising the negative that the editor recently apoligized for their content.
It's too late for me, I've cancelled it. I want the news, love to read the paper but negative news all the time is a drag.
I guess rose colored glasses are better
4-28-2009 @ 7:47AM
mdwitkowski said...
its about time they fall, tv media is next and then on to the college bias.
4-28-2009 @ 7:57AM
mark said...
Its about time they fall,next is tv media and then onto college bias!
4-28-2009 @ 8:00AM
Steve, Toms River, NJ said...
Newspapers are more interested in shaping opinion than reporting news in a balanced, un-biased fashion; the former is NOT the role of any "news source." I for one, do not want the opinion of some inexperienced "ready to save the world" stringer (and their equally inept editors); I just want facts without spin. Tell the story, don't create one! Newspapers and broadcast news stations seem more interested in their own personal agendas or in reporting trash and titilating, i.e. gossip, "entertainment news," and all the other trash they feel call for headlines. Besides, most of these so-called professionals don't even know how to spell no less write a cohesive sentence!
5-07-2009 @ 8:35AM
Kendall said...
Newspapers are dying for many reasons. However lets be very clear in terms of what this means. There is no doubt that newspapers have failed to carryout their role in a democracy, particularly the crumbling one in which we live. They have failed miserably in this regard and will suffer their rightful burial. At this point it should be common knowledge and quite apparent that Blogging has taken on the new means for information and analysis that the so-called mainstream media can't do because they are censored and owned by you know who. There is one party line and one party line even though there are 2 political parties. Make no mistake about the demise of the newspaper, it is a sympton of greater disease which is attacking this deomocracy. You know? they actually talked about this on Morning Joe today and what it means to possible political corruption. Ya think people would have caught on soon and connected the dots re: the erosion of freedom in this country.
Be strong...the best is yet to come.