Microsoft blogger Don Dodge puzzles over the failure of newspapers to focus on local search, "one of the last great online markets up for grabs."

They better do something. As Dodge notes, in the past six years the circulation of the Sunday San Jose Mercury News has declined 15%. But this is a lagging indicator; the real story is the decline in revenue from help wanted ads, from $118 million per year to $18 million. The newspaper business model has been to rely on advertising to subsidize both news gathering and circulation, charging the subscribers only a small portion of the cost. Indeed, advertising is itself content, with many subscribers more interested in the grocery specials, real estate ads, and department store sales than in the filler in the news columns.

Classified has been a particular cash cow, and if that is going the whole model collapses. One response is to build up online ad revenues, but, as Dodge points out, a newspaper brand is pretty much local, which means that national advertisers are unwilling to pay much.

Another alternative would be to charge for content delivery. An SJMN that charged, say, a dollar per Sunday for access to its fare, and bore none of the costs of physical distribution, might well be a viable entity. $300K per Sunday alone, x52 weeks, is $17 million, and if you add $50K per weekday you get about $33 millon, which could support quite a few reporters, especially if you add some revenue from local search.

Here is where the hara kiri comes in. The SJMN is partner of Good Morning, Silicon Valley, a blog on the tech world. GMSV has many virtues; it is well-written, irreverent, and quite entertaining. It is also totally against any assertion or defense of IP rights, focusing its contempt on all who differ from its Free-Culture-Movement stance that the Lord will provide, or perhaps the government.

It is, in short, doing everything it can to commit suicide by undermining the only economic model that might work -- the idea that GMSV, and the Mercury News, are positive economic goods and that those who enjoy them should support them.

We will come back to this principle eventually -- there is not a lot of choice -- but it may well be over the mouldering corpses of GMSV and the Mercury News, which, in a kind of poetic justice, will then be cited to prove the necessity and morality of the sale-of-content model.

posted by James DeLong @ 9:59 AM | Media: Video, Music...

Link to this Entry | Printer-Friendly | Email a Comment | Post a Comment(0)