Revenue Growth in Media

http://www.nytimes.com/2011/09/19/business/media/in-e-books-publishing-houses-have-a-rival-in-news-sites.html?_r=1&pagewanted=2

Summary: With the introduction and mass popularity of the internet, media is changing rapidly. Newspapers papers in particular have been sorely affected, since news can often be accessed online for free, either from news sites themselves or free blogs. Having seen a massive decline in sales of their print editions over the last few years, newspapers have been seeking new ways to earn revenue. One market they have begun to carve a niche in is the e-book market.

Newspapers, news organizations such as Fox News, and blogs such as The Huffington Post have begun to package together new material or previously free material and sell it in e-book format. This creates a whole new source of revenue for the companies, or allows products which previously incurred a loss now will turn a profit.

The use of reporters in writing e-books is also changing the wage structure of the news industry. Traditionally, reporters will be given an advance sum and sent off to report in the field. By using e-books, rater than using the advance method, the reports share in the profits earned by sales of the e-book the company will be publishing.

However, the field is relatively new, and certainly not without its share of problems. One of the largest is sales - in the article, deputy editor of the New York Times Pamela McCarthy puts the sales of special edition e-books in the thousands. This problem is related to another problem faced by the news media's niche: advertising. There are lots of e-books, but while a print book can be advertised simply by having a stand in a bookstore visited by hundreds of people each day, an e-book requires much more investigation by the potential customer. Letting people know how much there is, and what individual companies are publishing, is difficult (though far from impossible).

Opinion:

Are e-books the new path ahead for news companies? Yes - they may very well be the turning point for companies such as The New York Times or The Washington Post, a paper which has been hemorrhaging money for some time now. A new source of revenue, one with significantly less costs than most new products, will likely help turn these companies around.

Expansion into technology is how media has grown since the start of the digital age. Companies like Amazon, based online, have overthrown traditional booksellers. Barnes and Noble has survived, due in no small part to its introduction of the Nook (an ereading device which has proved a serious competitor to Amazon's kindle). News has moved online, not only in the form of digital platforms for traditional news organizations, but digital-only websites and free blogs. Even TV and Movies have become digital, with Netflix now streaming movies straight to computers.

If traditional news companies want to survive, they too will find ways to compete and earn revenue in the digital marketplace, besides simply putting their content online. While the Wall Street Journal has survived rather well by putting its content online and charging for the full product, this is partially due to the specific business reporting that the Wall Street Journal specializes in. Companies like the New York Times have to compete with other, more broad-based news reporting organizations like the Washington Post and USA Today. If one of these companies were to simply offer their services online at a charge, readers would flock towards one of the other free sites.

e-books are an excellent new area in which the industry can earn a profit. By offering these books for a small price on e-readers, they offer a whole new product that has the potential to be a major area of growth.

Issues with this idea were brought up in the article. However, neither of the cases against the viability of e-books is an insurmountable barrier to the success of the programs. Sales are comparatively small, but the concept of news organizations selling e-books is as well. When the concept becomes more common and public knowledge of the practice becomes more commonplace, these products' sales will increase accordingly. The problem of advertising is more complex. Although traditional advertising methods may be used, their effectiveness with e-books has yet to be determined. A possible solution is for newspapers to devote a greater amount of advertising space to their own e-books, which may increase sales of those e-books enough to offset advertising money that otherwise could have been earned from selling that space to other companies.