Boston.com has an excellent piece on how newspapers underestimated the impact of the web and wasted many chances in embracing it. It ironically presents a fascinating case study of itself.
I love boston.com website. I read it daily to follow my favorite boston sprots teams. It is great to see them being brutally truthful about their past faliings. I hope they make a successful transition into the new world and be around for a long time to come.
Other media industries better learn from this. I see the same mistakes being committed by music labels, movie studios and TV networks.
Over the past 15 years, The Boston Globe and other major US newspapers have seen changes in technology and consumer habits upend their business model. (John Blanding/ Globe Staff)
Months before The Boston Globe launched its own website in 1995, a brash young entrepreneur named Jeff Taylor visited the newspaper’s headquarters in Dorchester to offer its executives another foothold in the emerging digital world.
Taylor sat across the table from a team of Globe executives, including members of an unrelated Taylor family, the one that had run and held a controlling interest in New England’s dominant newspaper for more than a century before selling it to The New York Times Co. in 1993.
He described Monster Board, his fledgling venture in Maynard that sold help-wanted ads online. Jeff Taylor proposed the Globe put up $1 million for an ownership stake that would give the paper a chance to put its lucrative classified advertising business on the Web - a step that might have cut into its revenue in the short term, but offered a chance to take the franchise national.
The answer was no. Sharing the newspaper’s nearly $100 million a year in help-wanted advertising didn’t make sense. “Our grandfathers would roll over in their graves,” Jeff Taylor recalled being told. Soon after, he sold his business to the advertising giant TMP Worldwide. It expanded into Monster.com, a website that in 2000 generated more than $500 million, marking the beginning of the end of newspapers’ near-monopoly on classified ads.
What happened that day highlights the predicament the Globe and other papers have faced over the past 15 years as changes in technology and consumer habits upended their business model.
For decades, advertisers relied on newspapers to post job openings, sell homes, and unload cars because the medium reached a broad audience. But as more people migrated to the Internet, websites like Monster.com, Craigslist, and Cars.com popped up to specifically target those customers. Newspapers were slow to recognize the power of the Internet to erode, then splinter their familiar and almost effortlessly profitable business model. And though they’ve now built a significant Web presence, newspapers’ online ad sales haven’t grown nearly fast enough to offset the precipitous drop in print advertising. Nor do online ads command as much money as ads in the paper.
Newspapers were “spectacularly slow” to capitalize on the changing trends in technology and advertising, said media analyst Alan Mutter, a former editor and widely quoted commentator who now blogs on the industry’s woes.
“The newspaper business was a victim of its enormous success,” Mutter said. “Because their revenues continued to grow up to 2005, about 10 years after most people heard about the Internet, they put very little effort and energy into trying to imagine how the world might change and what their position would be in a changed world.”