Thursday, May 13, 2010

Can News Be Saved?

Hal Varian, Chief Economist at Google, has a fascinating new blog post on the economics of newspapers.

He writes:
[N]ewspapers have never made much money from news. They’ve made money from the special interest sections on topics such as Automotive, Travel, Home & Garden, Food & Drink, and so on. These sections attract contextually targeted advertising, which is much more effective than non-targeted advertising

In the past, advertising from the profitable sections cross-subsidized the news operations, since everything was delivered as a bundle. But online, users interested in the special interest sections bypass the news pages and go to focused websites.

So how will news be supported in the future? Unfortunately, Hal doesn't have a clear answer and neither do I, but I'll endorse his recommendation of experiment, experiment, experiment. In time, a business model will emerge, though it will almost surely look very different from what we have now.

No comments:

Post a Comment