Tuesday, July 1, 2008

Out of Print (Newspapers)?

Most of the things mentioned in the blog entry 'Are newspapers doomed?' by Richard Posner go well with my opinion on the subject (i.e. the online news media taking over the space of the print media). The idea of bundling in his note is well taken although I am not an expert in economics ;-).

"A bundled product is one that combines a number of products the demands for which may be quite different--some consumers may want some of the products in the bundle, other consumers may want other products in the bundle (sports, weather, politics and you name it)...Bundling is efficient if the cost to the consumer of the bundled products that he doesn't want is less than the cost saving from bundling..." The key take away point is that bundled product may be cheaper than the total price of the individual unbundled component.

It is disputable if bundling or specialization the way to go in online media. I put my money on specialization as a start-up option mainly due to the following two reasons.
1. There are much more competitors in the online market than print media.
2. It's easier to aggregate views from many different sources and provide a through view of the news at hand.

As the business grows, bundling may be considered to attract more audience.

Further, he indicates that older generation prefer to read hard copies compared to the younger generation. While this may be true for the current demographic spread (may be due to print media being the dominant source when they were young), I think this trend will also change in the future; when people get used to online news when they were young, they'll probably continue to read online (resistance to change factor comes to play).

Few years ago (when I was in Sri Lanka), every Sunday morning I used to read Lakbima, Sunday Times and/or Sunday Observer (Sri Lankan news papers), but here in USA, I prefer to read news online. I'm not alone, these sources [1, 2] back up the fact that more and more people get information online, shrinking the market for the printed newspapers. I think, among other things, following contributed to this trend.

1. It's much cheaper to circulate information online.
2. Most printed newspapers rely on ads to generate revenue. With the advent of online advertising including free (like craiglist) services, their revenue through ads started to diminish, propelling them to look into alternatives.

I am more interested in the technical challenges in realizing the above trend. A part of my research is directed towards efficient and secure content distribution. Looking at the trend I think my research can make a positive impact in the future in this area; I always want to do something that is useful to people. Who knows, in the near future, you'll see many people reading their morning news through hand held wireless readers!

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