It is no secret that traditional newspapers are going through a rough patch. If the news of layoffs, closures, consolidations, shut downs and bankruptcies are not enough to convince you that newspaper and traditional media industry is going through a massive sea change, I do not know what would. What is the culprit? The internet. The internet has dramatically changed how people interact with and discover news. Previously people would discover news through specialized blogs or specialized newspaper websites. These post special headache for newspapers because they were not as lucrative in terms of advertising revenue as printed ads. Moreover, a lot of newspapers are localized while the internet has no geographic boundaries. This puts local newspapers in a lot of disadvantage. While they do have the advantage of ready access to local news, the massive spread of local blogs softens that competitive advantage. Be that is it may, newspapers are not going to completely disappear. They will always have a niche. However, many of the revenue bases that provided their bread and butter have gone through such a massive change that the old methods and systems no longer work. That is the hard reality that many newspapers are dealing with. There is currently a massive consolidation of the industry and we do not see that ending anytime soon. Added to the newspaper industry’s worries is the rising share of social networks in how people discover news.
Previously, we discover news by picking up a newspaper or turning on the TV. That is no longer the case. Increasing percentage of the population is discovering and sharing news through social networks. Of course, the number one company in this space is Facebook. When asked which services or websites they use to share news, respondents from a recent UK Reuters Institute survey said that they use Facebook. In fact, 55% of them named this service. Close behind interestingly enough is E-mail. Many observers are saying that E-mail’s importance has been diminished by social networks. It looks like E-mail is here to stay and is not going anywhere anytime soon. E-mail is very easy, very accessible and many people are really set in their ways and attitudes regarding E-mail. Even if somebody is a hardcore Facebook addict, they still use E-mail and there is overlap among these two modes of communication because somebody could come across news update on Facebook and then share it via E-mail or vice versa. Behind E-mail, 23% of respondents said that they use Twitter.
All told, this is yet another important piece of evidence on how social media web 2.0 is shaping how people discover and share information. Google+ is barely a bleep in the radar. It only registered 6% as a choice for sharing news. Considering how pervasive Facebook is in terms of information interchange, it would be very interesting to see how Facebook can effectively monetize this trend knowing that increasing share of their users use mobile devices to access Facebook’s services. As we have reported earlier, Facebook is having a tough time monetizing the increasing mobile share of its traffic base.