Extra, Extra

This just in: the Internet is really, really popular.

Interested but not surprised that Jay Mariotti handed in his resignation from the Chicago Sun-Times after 17 years at the paper. (Okay, maybe a little surprised -- he's walking away from $2 million a year, apparently.)

The rationale delivered by Mariotti sounds logical enough: print journalism is getting creamed by the Internet, and he doesn't want to go down with the ship. Fine. But does anyone believe that he doesn't already have something else in his back pocket? To repeat: $2 million per year. One doesn't walk away from cheese like that, no matter how dismayed one may be about the state of one's industry. He's got to have something else lined up already -- if not, well, he must be awfully confident about his resume'.

Anyway, I'm interested, but not surprised. The newspaper industry is in dire straits these days. Just across the street from Mariotti's old haunt, the rival Chicago Tribune is in a pitched battle for its own survival, as new owner Sam Zell is attempting to sell the Cubs and Wrigley Field in order to raise cash for the heavily-leveraged newspaper operation. Here in Florida, many dailies have already inflicted massive job cuts, including the Palm Beach Post, the Miami Herald, the Tampa Tribune, and the Orlando Sentinel, to name but a few. Surely, no matter where you may be as you read this, the same thing is happening in your market as well.

Why?

Saying "it's the economy" or "it's the Internet" is convenient, but what is it that makes the newspaper business so much less viable, and suddenly?

In my view, two words: timeliness and distribution.

Timeliness is obvious. The Internet is quite literally always on. As more and more credible journalistic outlets pour their resources into online news gathering, we will reach a point (if not already) where there is, for all intents and purposes, zero lag time between the event and the reporting of the event. Printed newspapers, by definition, can never compete with that.

Personally, I like reading a hard copy of the newspaper, if only so that I can scan headlines, move from one story to the next quickly, double back and re-read something I skipped. Online newspaper sites don't afford that quick flexibility, particularly if one has a slow connection. However, as the technology improves and the creative catches up with the technical -- I'm still waiting for a major daily newspaper to come up with a one-webpage format that gives readers a method of scanning more than just headlines all at once -- that 'ease of use' concern will fade.

Newspapers are well aware of the immediacy of the Internet, of course, and have been blasting full-speed towards moving the bulk of their resources to their online divisions. Every columnist and reporter in the country is now compelled to blog; every major paper in the country is pushing its website in print. The problem is, they're still a few years behind, and still moving too slowly.

Consider this nugget from the Silicon Alley Insider last summer: as of August 2007, the "total monthly online revenue for the entire public newspaper industry amount[ed] to approximately 15% of Google's monthly US revenue."

Why? Because Google was there first, and had plenty of time to ingrain itself into our minds as the first-choice source of finding information on the Internet. Only when it became apparent to the print industry that no amount of indignation or disbelief could stem the public stampede to the Internet did they (the papers) decide to jump in. Thus, they're so far behind the curve, they can barely see it from here.

Which brings us to distribution. From this laptop, I can read almost any newspaper in the world, instantly. The cost to me is my Internet connection -- which is zero if I'm at work, a manageable monthly bill if I'm at home. Those newspaper websites themselves are maintained via a server -- a large initial investment, but not prohibitive -- and a staff, which can vary in size, but can be "doubled up" with the newspaper's print division as a cost-saving move. There's nothing to stop a print editor from doubling as an online editor, for example.

Point being, when you calculate the total cost of me reading a story online, factoring in my time, my Internet connection, my computer, the newspaper company's server, the staff required, and the like, economies of scale dictate that it comes down to pennies per minute, or per story.

Now -- compare that to reading a story in print. I buy the newspaper: 25 cents, or perhaps $1.25 on Sunday. How much energy was required to run the presses that printed all of those papers? How many employees work the press? How many trucks were required to carry those papers to distribution centers, and how much gas did they use? How much gas did the newspaper carrier use to deliver that paper to my house?

The newspaper model suffers against the Internet model primarily because of distribution (which itself is related to timeliness). Printing and delivering all of those newspapers creates a massive cost; any slippage in sales, advertising, or subscriptions sends the print world over the edge. Which is happening right now.

So how can newspapers keep up, other than layoffs and pushing web traffic?

The answer is out there, but I don't know enough about distribution systems to guess. There's got to be a Long Tail-type solution, something along the lines of Amazon or Rhapsody, but I'm not sure what it is. I do believe, however, that newspapers are not dead.

The model simply has to change. I can't blame Jay Mariotti for deciding to bail instead of waiting for the newspaper industry to figure it out.