Tuesday, August 25, 2009

Reader's digest files for bankruptcy

A sad news indeed.
I remember being a fan of RD as a kid. But it has succumbed, to the rise of internet, more than recession. Print media has been struck real bad by the free content on th enet.

And there is no looking back. I dont think there is anyway that people can be coaxed into reading, and paying for, something that they can read on the internet for free.

The younger generation, the ones who have seen computer from an early age, are often more comfortable reading off the screen than from a printed version. Add to that the ubiquitous nature of free content, you know that the print media is fighting a losing battle.
The only way print media can tide over to the profit side is by providing content on the net. Right now, most media houses have free content on the net.

But this is not sustainable - because it requires the same amount of effort to produce content for the net, as it does for printing. The first thing that media houses must realize s that popularity is not revenue. You might be the most popular news agency on the internet - but that does not give you anything. Sure, you can find some advertiser on the web - but arent there too many websites vying for the same set of advertisers? The law of diminishing returns sets in very soon in such a market.

The only way out for the media houses is to have a free and a premium section, where the free section drives the masses . And the premium section catering to specialized news requirements.

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Abhishek Kannur said...

Sad indeed! I was once a fan too.

I am not sure about the sustainability of the premium and the free section. Depends on the USP here I guess, which for RD should be... what?

Chris said...

And so I suppose Google will be opening a Baghdad bureau now that they've displaced print media producers? Yahoo will send writers and photographers to cover the Super Bowl? Your premise, which is that free content online makes print unsustainable, seems to assume that the content just appears spontaneously for distribution online. It doesn't. It's created by professionally trained journalists, writers, photographers, illustrators. Then it's laboriously refined by talented editors. If print dies then the content dies with it. But it wont. Print media will stop foolishly giving away product to online distributors. And when that happens it will be the portals who are obsolete.

Ankit Ashok said...

@ Abhi :

Ya, the premium and free sections will only work if the service is able to provide special content - or at least appear to be so (USP selling, precisely)

I believe RD's the closest that it has to a USP would be the win-against-all-odds stories. I think the reason RD finally went down was this - It catered to a large variety of audience, but lost a USP in the process.

Ankit Ashok said...

@ Chris :

Your comment actually is a reiteration of what I have already written in the post. I did say that "it requires the same amount of effort to produce content for the net, as it does for printing."

My premise is that in the war for print, media houses are just providing free content on the net - and this expense is coming out of the print revenues. So now the customer has an option of reading news from his/her favorite news channel free and hence decides to discontinue paying for it. The media house on the other hand is taxing its existing customer to pay for this guy to read his news free.

This revenue model is unsustainable. And ya, exactly as I wrote later, print media MUST stop foolishly giving out all content for free. And thats where I think a free and premium news concept can generate revenues.

Abhishek Kannur said...

Yes, it was win-against-all-odds stories! Exactly the phrase I was looking for :D

Ankit Ashok said...

@ Abhi :

:) great minds think alike.