Years ago, I thought people ended their irresponsible blaming of Craigslist.org for the newspaper industry's declining revenue. I guess not. Eggheads released a study. Hey professors, the year 2000 called, and they want its stupidity back.
First, a blog post from 2007 titled:
2. Newspaper classifieds suck and they have for years. Either develop simple database applications with photos and maps to let your users actually find what they’re looking for, or partner with a good third-party vertical who can. Anything less is a waste of your time.
And now back to present day, August 13-14, 2013.
- Reuters - New Research Looks at Craigslist’s Damaging Blow to Local Newspapers
- Forbes - Sorry, Craig: Study Finds Craigslist Took $5 Billion From Newspapers
- Raw Story - Craigslist has cost U.S. newspapers $5 billion
Forbes, Craigslist money from newspapers? Like stolen? That's imbecilic.
From the Reuters story:
In a new study, Robert Seamans, assistant professor of management and organizations at the NYU Stern School of Business, and Feng Zhu at Harvard Business School, examine the impact of Craigslist, a website providing classified-advertising services, on local US newspapers during the 2000s.
They estimate that classified-ad buyers $5 billion from 2000-2007 as a result of Craigslist entering the market. On the flip-side, local newspapers lost out on billions in potential revenue as readers who historically posted their classified ads in the paper opted to post their ads on Craigslist.
Even the researchers or the Reuters writer recognized that it was the users or public who saved money.
The newspaper industry lost this revenue stream for failing to adapt and innovate fast enough.
I read years ago that the newspaper industry made 65 percent of its revenue from classified ads. It's the industry's fault for relying too much for too long on one source of revenue.
More from the Reuters story:
The researchers also identified several ripple effects across the newspaper industry. They calculated that newspapers relying heavily on classified-ad revenue (i.e., papers with classified-ad managers) saw a:
- 20.7% drop in classified-ad rates
- 3.3% increase in subscription prices
- 4.4% decrease in circulation
- 16.5% increase in differentiation from other papers
- 3.1% decrease in display-ad rates
- Lower likelihood of providing content online
More reasonable quotes exist in this Hacker News thread that pointed to the above Raw Story post.
- "America's newspapers (particularly the big dailies) had been destroying themselves since about the early 1980s; the decline was well-known, and often discussed long before it started to be blamed on competition from the internet in general or Craigslist in particular."
- "It's reasonable to say that they have transformed the market, but saying they have "cost" them anything is an ill choice of words."
- "Alternatively, Craigslist has $5 billion (minus fees for a few categories) since 2000."
- " The headline should say: Technical progress and competition have cost U.S. newspapers $5 billion since 2000, researchers say."
- "Failure to innovate damages industry Dinosaurs."
- "And [Craigslist] saved people countless hours in waiting for their classifieds to get printed and effort in figuring out spacing and setting up their ads."
- "Newspapers forfeit $5 billion badly needed dollars to Craigslist by totally failing to notice how bad they were at their jobs, and how technology has changed information delivery."
- "Let's all sit around and cry about how new technology replaces old business models."
- "Nothing stopping media tycoons from making their own classifieds site."
- "What a horrible headline. That makes it sound like US newspapers were somehow entitled to that $5 billion. In actual fact, the newspapers had the same opportunity as Craiglist to earn (or try to earn) that revenue, and they dropped the ball. Boo hoo, cry me a river. It should, instead, read "failure to adapt to new technology and a changing environment results in $5 billion loss to US newspaper industry"."
- "Cost per inch, classifieds were always a big rip-off. Worse? Obituaries."
- "As others have noted, Craigslist has saved people and businesses at least as much as they've cost newspapers. The efficiency gain alone of Craigslist is likely to have produced a significant net gain for the US economy."
The newspapers' loss is the U.S. economy's gain. By not paying the newspaper industry for ads, the public has more money to spend elsewhere.
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