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:
- Decrease of authority & differentiation
- 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
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.
- Rupert Murdoch on the future of newspapers (vator.tv)
- Newspaper ad revenue plummets! (ceoworld.biz)