Clay Shirky on Newspapers

I was just talking with a friend about the decline of newspapers, now Clay Shirky has published an excellent article on their downfall, Newspapers and Thinking the Unthinkable. Some choice quotes:

If you want to know why newspapers are in such trouble, the most salient fact is this: Printing presses are terrifically expensive to set up and to run. This bit of economics, normal since Gutenberg, limits competition while creating positive returns to scale for the press owner, a happy pair of economic effects that feed on each other. In a notional town with two perfectly balanced newspapers, one paper would eventually generate some small advantage — a breaking story, a key interview — at which point both advertisers and readers would come to prefer it, however slightly. That paper would in turn find it easier to capture the next dollar of advertising, at lower expense, than the competition. This would increase its dominance, which would further deepen those preferences, repeat chorus. The end result is either geographic or demographic segmentation among papers, or one paper holding a monopoly on the local mainstream audience.

Local papers have always baffled me and this explains their existence and why they are going away in the face of the internet.

The newspaper people often note that newspapers benefit society as a whole. This is true, but irrelevant to the problem at hand; "You’re gonna miss us when we're gone!" has never been much of a business model.

To watch the 'unthinkable' unfold from the newspaper side watch this video put together by people from the Rocky Mountain News on the shutting down of their paper [via Timothy B. Lee]. While touching that good people are losing their jobs, the whining about bloggers and the constant splicing in of shots of the printing press is disturbing, the fetishization of newsprint, showing that even though they are dead center in the middle of the storm, they still don't understand what is happening around them.