Newspapers & Craigslist

As everyone talks about the death of newspapers, i’d like to remark on one of the majors elements in this death spiral: Craigslist.  To me the two major killers of the newspaper are:

  1. Decrease of authority & differentiation
  2. Lack of classified revenue

First, the decrease in authority and differentiation.  Every web site and publication needs to be an authority on something, anything.  Newspapers in the past were authorities for:

  • local news
  • international news
  • sports
  • entertainment

Over the past 8 years, they have no become the authority for only one of those: local news.  International news is dominated by CNN, Reuters and others who focus explicitly on that area.  Similarly, sports is dominated by ESPN and Fox News and Entertainment has a variety of outlets that provide much more in depth coverage and reviews than newspapers ever did.    This decrease in authority minimizes the importance of newspapers to readers.  For most categories listed above, it’s a nice piece of reading material to have but by no means necessary.


The second piece is Craigslist.  In 2000, newspapers pulled in $20 billion in revenue from classifieds. That went to $10 billion in 2008.  So, in 8 years revenues for newspapers got chopped in half (stats here).  Where did this money go, most of those services are now free on Craigslist.   Craigslist took $10 billion out of the industry and pocketed about $100 million of it.  To be exact, Craigslist is pulled in $80 million as of April ’08 (stats).  Who knows what that will be for 2009 but prob at or around $100k.  With a  staff of 28 people so that’s pretty damn good.

Imagine that, a staff of 28 people is decimating an entire industry.  That is the true power of the internet.

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New Media – What Will It Look Like

Toby and i have been debating and discussing what new media will look like.  His post today inspired me to lay down some of my thoughts. A lot of my thinking stems from this article in The Atlantic and Fred’s Post about his reading habits.

The Atlantic post described how the NY Times is dead.  With $1 billion in debt, a $400 million dollar loan due in May and only $46 million in cash on hand, it is going down.  Even with the $250 million it got yesterday, it cannot continue to exist the way it is.  No newspaper can.  My beloved Star Tribune declared bankruptcy last too and that’s the beginning of the trend of all papers.

Why are they failing?  Because the business model is wrong.  They are trying to do too much.  They cover things that are commodities.  It’s as if every online music service tried to build an mp3 store to compete with iTunes and Amazon.  They don’t because those work great.  Newpapers try to cover every story: national and international news, sports, entertainment, etc. The local newspaper doesn’t need to cover most of they reports on today because their paper is not going to be the place where the public finds that information. When user’s get online, all of this news is available in other places, for free and in a better, deeper format.  For instance:

  • National and International news: this is covered by AP, Reuters, and
  • Entertainment news: this can be found online (RottenTomatoes) or from national news and reviews from individual columnists (Ebert)
  • Sports: and bloggers will cover this

If a paper is covering any of these on their own, it is a losing proposition.  What’s left? The only thing is see is local news. I think local papers should focus on local news because everything else is a commodity.  Even bloggers will be able to fill the gaps left by major journals.

Toby talks in his post about the Huffington Post which i think is a piece of the puzzle but it’s only interesting because they are trying to be a news portal.  And i agree.  In my mind, most “papers” will shift online and instead of reporting the news, they will be filtering it. And if they don’t, they will die.  They better hurry up too, becuase places like the HuffPo are trying to get there first. You can already see how this is happening.  Filters are already part of people everyday lives the same way a paper used to be.  Technology aggregation and filtering is done at Techmeme, sport aggregation and filtering at ESPN, and news filters like CNN can replace almost any newspaper’s news coverage.

I’m not the only one who thinks this way.  More evidence came yesterday when ESPN announced a partnership with TrueHoop to place NBA blogs in their site because they know that they can’t cover everything.  You can see how techmeme is the “paper” of choice for Michael Arrington from TechCrunch.  He writes:

Image representing Techmeme as depicted in Cru...
Image via CrunchBase

TechMeme is another four-year favorite. It is the blogosphere’s daily newspaper, and one of the sites we use most often in seeing how stories develop.

Will papers become local news sources?  I think that’s all that’s left for them.  But they better hurry up because local blogs like and are already attacking this niche and doing a better job than they are.

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NYTimes is the only legit map

I’m at work and trying to figure out who’s winning the election and what i notice is that every site is different.  Some have called over 15 states already whereas others have only called 2.  How can this happen?  It can happen b/c lots of sites are just making the news up.

The NYTimes however has a map that is reporting county by county and showing that reporting in real time.  This is real facts and you can see the actual information as it comes in.  Sure, they are way behind Yahoo, CNBC, CNN and BBC in results but they happen to have the real deal.  That’s where my browser’s going to be for the next few hours.

County by County
County by County
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World Peace? We're Closer than we think

During my trip to Maui, i brought along the book “The Post-American World” by Fareed Zakaria. It’s a good read (not done yet). One part i really liked at the begging was when he was talking about how war and organized violence have declined substantially over the past 60 years – and dramatically over the last two decades. This was news to me. He writes:
The general magnitude of global warfare has decreased by over 60% [since the mid-1980’s], falling by the end of 2004 to its lowest level since the late 1950’s. Violence increased steadily throughout the Cold War – increasing sixfold between the 1950’s and early 1990’s – but the trend peaked just before the collapse of the Soviet Union in 1991 and the extent of warfare among and within states lessened by nearly half in the first decade after the Cold War.
To that Harvard’s professor Steven Pinker argues, “That today we are probably living int he most peaceful time in our species’ existence.”
This seems so contrary to what i feel everyday due to the constant news of terrorism, bombings, airline accidents, etc. Zakaria addresses this saying:
One reason for the mismatch between reality and our sense of it might be that, over these same decades, we have experienced a revolution in information technology that now brings us news from around the world instantly, vividly, and continuiously…. Every weather disturbance is “the story of the century”. Every bomb that explodes is BREAKING NEWS. It is difficult to put this all in context because the information revolution is so new. We didn’t get daily footage on the ~2 million who died in the killing fields of Cambodia in the 1970’s or the million who perished in teh sands of the Iran-Iraq war in the 1908’s
But now the deaths of ten, because they are seen up close, make the world seem more and more dangerous. When, in fact, the opposite is true.