Kinsley makes the crucial point in regard to the various calls for news organizations to institute a “micropayments” scheme for content: Nobody pays for content now, and newspapers don’t make any money selling content!
Yes, you buy the newspaper, but the paper is selling it to you at a loss — the newsprint costs the newspaper more than you’re paying, let alone the actual reporting, etc.
The real problem newspapers face is increased competition, Kinsley says:
If the only effect of the Internet on newspapers was a drastic reduction in their distribution costs, publishers could probably keep a bit of that savings, rather than passing all of it and more on to the readers. But the Internet has also increased competition — not just from new media but among newspapers as well. Or rather, it has introduced competition into an industry legendary for its monopoly power.
Just a few years ago, there was no sweeter perch in American capitalism than ownership of the only newspaper in town. Now, every English-language newspaper is in direct competition with every other. Millions of Americans get their news online from The Guardian, which is published in London. This competition, and not some kind of petulance or laziness or addled philosophy, is what keeps readers from shelling out for news.
He’s optimistic: The hometown rag will die, but at the big papers, “competition will keep the Baghdad bureaus open and the investigative units stoked with dudgeon.”
