Newspaper Business: News Was A Loss Leader

Howard Weaver wants newspapers to play offense against Google and others, but Chris Tolles, CEO of news aggregator Topix.com says he’s been trying Weaver’s plan for a while, and there’s no bucket of gold to be found in it.

The problem, it would appear, is that newspapers don’t sell news. They sell advertising space and pair it with news as a loss leader to keep the eyeballs. And while that worked in print, it doesn’t work on the web. Web users don’t click on ads on news sites (perhaps for the same reasons they don’t click ads on social network sites).

Yes. The news in a newspaper was a loss leader, though it’ll probably make you feel better to think of the sports and entertainment that way. Television overtook newspapers as the primary news source in the 1970s. And in 2008, newspapers fell behind internet sources. The economics of it now are that news printed on bad paper are less of a loss leader and more simply just a loss. (It’s hard to know if the poor performance of newspaper websites is a result of this or if it reflects other failings.)

Those worried about what will happen to the public sphere after the death of newspapers should take a look at this 2004 study comparing television vs. newspaper front pages: newspapers had twice as many lifestyle and crime stories as the evening TV news. The public sphere has long needed better nourishment.

Mashable‘s Josh Catone thinks NPR is the future of mainstream media. Their audience is way up, and it’s a well proven example of the crowdfunding model. My local affiliate provides some of the best local news around.