Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

Good Luck With That - Pew Research Graphs Bezos' Stunning Challenge

Posted by Tom Foremski - August 7, 2013

Many people are hoping that Jeff Bezos, CEO of Amazon, will be able to find a business model that saves the newspaper industry. I wish him the best of luck. Pew Research put together a great post charting the decline of the newspaper, which will most certainly be mirrored in the challenges of a democratic society.

I remind people that, "Special interest groups will gladly pay for the media they want you to read, but you don't want to pay for the independent media you should be reading."

Take a look at some of this data put together by Amy Mitchell, Mark Jurkowitz, and Emily Guskin from the Pew Research Center: What's Behind The Washington Post Sale | Project for Excellence in Journalism (PEJ)

The slide of print ad revenues1

There's not much help from digital revenues — precisely the area where Mr. Bezos is expected to help — the situation is getting worse:

In 2012 for every one digital dollar earned - $15 in print revenues was lost. Things are getting worse: In 2011 the ratio was $1 digital gained for each $10 lost.

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Here is why things are getting worse:

Overall mobile ad revenue is growing rapidly – 80% in 2012 – but as with digital ad revenue overall, it may be a bust for the news industry as technology giants like Google and Facebook move in to harvest that money.

Fully 72% of mobile display ad revenue now goes to six companies—none of which are news producing organizations. 

 

There is a bright spot in local advertising, which grew 22 per cent in 2012:

But two major trends may be pushing that revenue out of the hands of local news organizations.  One is the more sophisticated geo-targeting by major national ad networks, which appeals to national brands like WalMart. In addition, Google, Facebook and other large players are improving their ability to sell ad space to truly local advertisers. 

Google and Facebook are competitors that newspapers cannot hope to compete against.

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Here are some Washington Post specific numbers:

The Washington Post: By the Numbers | Project for Excellence in Journalism (PEJ)

Downward trajectory 0

At least Mr. Bezos is picking up the Washington Post at a bargain price:

Historic Deals of Major U.S. Newspaper Companies | Project for Excellence in Journalism (PEJ)

 

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