How Ray Kurzweil is killing the printed newspaper

Okay, best to come clean at the start, Ray Kurzweil is not actually killing the printed newspaper, but his talk of exponential growth in the fields of computing power and storage (and more) have gotten me thinking more specifically about this.

The future of the printed newspaper is something I’ve dealt with a couple of times before (see here and here).  But recently I’ve greatly reduced the time I believe it will take before a news organisation will distribute its content on paper.  I used to think it would be about 20 years (when the printing presses finally pack up and it is not worth replacing them.)  Now I think it will be within the next 10 years. Why?  Read on:

– demand is dropping away:  August 2009 ABCs show The Guardian down 2.5% compared to last year, which is approx 7000 copies a day.  The Times dropped 17,000 a day, the Independent 30,000 a day and the Telegraph 39,000 a day.  Sunday papers: 12% year on year decline for The Observer and a scary 26% decline for the Independent on Sunday.  Any sales increase comes from DVD give-aways.  This is an industry where success is judged by not losing sales as quickly as your competitors.

– one step to reduce costs is to reduce the number of pages printed (the cost savings can be substantial), but how much can you do this before damaging the core product, therefore reducing demand further?

– increasing the cover price whilst delivering less will hit demand sooner or later when people realise that value for money is getting distinctly worse

– companies like News International and The Guardian have invested millions in new printing presses in the last few years in a bid to make a printed paper look modern – going smaller format, full colour, mainly in response to the Independent going tabloid.  This is spending money to stay still (or to slow the rate of decline) whilst they try to figure out what the next step is.  This is hugely distracting to the process of looking to the future but better than not having an industry

– the exponential rate of improvement in computing and the subsequent reduction in cost give people more options for where to get news and the devices used to consume it.  As a result, the devices will become far more powerful and will most likely change their form factor too – augmented reality glasses with ubiquitous internet access, anyone?

– probably most important is that advertisers are going to get fed up with the limited options for their adverts.  The best a newspaper can do is to send different ads for different editions so that they end up in different parts of the country (some have to be different because of differences in, say, bank holidays or shop opening hours.)  It’s limited and imprecise, hard to measure and not interactive in any way.  The improvements in technology will allow (and are allowing) greater targeting of audiences, better feedback and broader types of ads with greater interaction.  In general, what is not possible with today’s technology will be possible in a year or two’s time, so the impact will only get worse.  We are already seeing advertising revenue decline, leading to a remarkable change in financial performance in the last year – something that cannot be explained solely by the recession.

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