You know, in all the stories we’ve read over the years about the demise of newspapers, it’s curious that one key, if not THE key fact, is never mentioned. Newspapers, during their glory days..the 50’s-90’s....when they flourished..and virtually minted money and profits..well, dureing that time..they were for the most part..monopolies..Yes, there were a few instances in major cities where there was competition...but usually one or more of those “competing” papers was owned by a huge chain and/or media conglomerate....more than willing to cover any losses. So before we cry crocodile tears over their demise..let’s remember the tyranny of the monopoly..the small businessman who wanted to place a help wanted ad....want 1/8 page in your local paper..it was about $400 in the 70’s...about one week’s wages for the positon being advertised...and they sounded like they were doing you a favor... they killed themselves, because they refused torecognize how the new technologies would impact them....they weren’t tat good after all..they just had the game rigged for 40 years....
Precisely. Monopoly was all they ever had. See my post #17. Think how much capital was required to set up an electronic broadcast system via TV or radio. Think how much capital is required to do the same for an ink-on-paper information distribution system (aka newspaper). And think about mass production of paper and how expensive that is.
Lots and lots of money, which bars most folks from entry into the marketplace. De facto monopoly situation.
And also see this by Jeff Jarvis.
http://www.buzzmachine.com/
Surrendering advertising … killing bundling
I know I’ve prolly posted this link before, but it shows clearly what a monster infrastructure was once required to do electronic telecommunications.
Immense manpower and capital.
That is an important point. There’s an additional point that escapes most notice outside investor circles:
In keeping with their monopoly mentality, many newspapers were held in family trusts. The LA Times, NY Times are two examples. The actual voting shares were closely held “B” shares, and then the other classes of stock were non-voting or had diluted voting rights. The closely-held voting shares of the family trust(s) held sway and were able to keep anyone from buying the paper or buying a majority of the stock in the markets and gaining even a seat on the board.
As time went on, many of the family members had little to no interest in exercising any business oversight of the paper, just so long as their restricted class share dividends were paid to support their lavish coupon-clipping lifestyles. It is only when the papers really hit bottom that the family members would wake up and “demanded to know what happened.”
And what has now happened is irreversible, even if they hire management that literally walks on water. They now find themselves owning controlling interest(s) in buggy whip manufactures.