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Newspapers Look To Web Sites As Future

Despite posting generally deteriorating revenue, newspaper companies still make lots of money. However, expected growth is the major measure of Wall Street. Realizing this point, James O'Shea, the new editor of Tribune Co.'s Los Angeles Times, adopts an AOL-esque approach to reshaping the newspaper business.

Consolidate print and Web operations into a leaner, sleeker business that reaches fewer people, but does so more effectively. In merging operations and focusing more intently on its Web business, overhead costs will be scaled back tremendously.

The task is easier said than done. While print content in the future will undoubtedly be viewed on a variety of screens (PC, TV, phone), newspapers will suddenly be forced to compete with broadcast media outlets as online video proliferates.

Google founder Larry Page observed at Davos that the newspaper's competitive edge is that the printed word reads better on paper than on a computer screen, a problem that can be rectified he said. If you ask Gen Y, most would disagree.

The move could be viewed as a blessing and a curse, because of the sizable difference in ad rates--a print reader is worth three times as much as an online reader. This would be a painful transition indeed.



Read the whole story at The Hollywood Reporter »

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