Newspapers are one of the most common items in our lives. We read them, we use them for packing boxes, some people wrap their presents with them, and we train the dog to get them for us. Why, after all these years of profits, are newspaper companies losing circulation?
The newspaper industry has enjoyed a high level of inelasticity of demand for many years. There is a high amount of cost that goes into starting a newspaper company. There is usually only one newspaper company in a small town or city. It would seem that newspaper companies would have a monopoly or at least an oligopoly. I believe that has been the case for hundreds of years.
Thanks to the information super highway, we now have a much larger market for news and information. The cost to print something on paper is far too high compared to the almost free cost of publishing something online. Nobody wants to pay for information or intellectual property anymore. Nobody wants the inconvenience of finding their paper every morning or wasting time training the dog to do it. Also, I don’t like to get my hands black with the ink from the pages.
The argument can be made that the quality of the reporting has decreased since the birth of the internet, but I don’t think that will stop it. I can’t see how any newspaper company can survive when the competition can create a similar product for pennies on the dollar.