A Journalism Glut

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16 Dec 2008 04:49 pm

The Economist joins the debate:

I think [that Felix Salmon and James Surowiecki] miss something about the current market for news, namely, the fact that it's glutted. Technology hasn't just changed the demand for newspapers, it's also changed the supply of information. News used to be an oligopolistic business, now it's just about perfectly competitive. Barriers to entry are minimal, and plenty of suppliers are happy to provide content at next to nothing. That's a recipe for a big drop in price, and any organisation built on market power and rents is sure to fail in such an environment.

Does this mean that news, as a business, is dead? Not necessarily. Some papers will survive by selling things other than news—reputation, say, or exclusivity. Others will hang on until the print market shrinks enough that profitability is possible for a handful (or fewer) of national papers. Survivors in both groups are also likely to capitalise on the demand for news products that remain scarce—especially investigative reporting.

(hat tip: Tim Kane)

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