Eric Ulken: February 2009 archive
Newspapers' supply-and-demand problem (Why you should quit doing what everyone else is)
February 25, 2009
A lot of bits have been spilled over the apparent absence of a viable business model for news on the Web to replace one that no longer works for print. The ad-supported model doesn't seem to work, but clearly neither do pay walls. There's even talk of micropayments again (hello, 1998!).I'm no economist, but I think the problem comes down to this: The Internet is a single, efficient market governed by the laws of supply and demand*. Because there's surplus ad inventory online — particularly low-grade inventory — prices are falling. But what if the surplus inventory is largely the result of a glut of duplicative content? Would the problem go away if news organizations simply stopped doing about half of what they do and focused on the stuff nobody else is producing? More...
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