This is the paradox of journalism in the digital age: Journalism organisations reach more people than was ever possible in the analogue age, but those larger audiences have not translated into higher revenues. Some of this has been almost constant pressure of digital ad revenues since the beginning of the financial crisis, driven by an oversupply of ad space. Digital media offer a dizzying array of choices for consumers and advertisers.
From the standpoint of journalism, like all industries facing the Innovator’s Dilemma, we scoffed at scrappy upstarts but not only editorial ones but more importantly commercial competitors for ad revenue that we didn’t even see as being in our business.
For an interesting view of this, take a look at this piece from The Conversation in Australia, a site that publishes comment on current issues by academics in Oz and the UK. Franco Papandrea writes:
The industry clearly underestimated the threat posed by the development of online competition. Although several newspapers moved early to establish an online presence, the initiatives were largely pursued to complement traditional activities rather than strategic actions to reposition their operations and bolster their competitiveness in the rapidly changing environment.
More recently, once the magnitude of the threat became evident, newspapers have scrambled to restructure in an effort to contain its impact. Their efforts so far have been concentrated in two broad areas: restructuring of publishing operations to re-align production costs with lower revenues; and seeking to convert their online readerships to earnings.
The increasing range of news and advertising services accessible on the internet is changing the relative comparative advantages of established media. The adjustment process is having a significant impact on established structures. The impact on newspapers has had both positive and negative implications.
He says we shouldn’t write off the incumbents, and he’s right. But in an age of disruption, incumbents strengths can quickly become their Achille’s heel as the market shifts.