Document Type

Article

Publication Date

December 2008

Abstract

This short essay (7,000 words) discusses the business strategy of American newspapers and, in particular, the New York Times. The essay describes the business model of the NYT has having moved, in its content and marketing to readers, from a daily newspaper tailored around the news justified because it happened, to a magazine of commentary and analysis on the front page, and finally, under pressure of the economics of web advertising, to a collection of online communities of readers organized by a writer. Reporting of new facts not already in the information stream is expensive; opinion equals commodification; newspaper as collection of blogs has a competitive advantage only in cocooning communities of like-minded readers. The magazine and online communities models of newspapers only really work under the 'information economics of the leisure class', drawing on Veblen's models of leisure and conspicuous consumption in which the 'news' is not valued for its factual accuracy, timeliness, relevance, or newness, but as a marker of status. Notably, in the financial crisis, readers otherwise happy to take the NYT merely as a status and opinion marker have started to worry once again about the quality of its factual reporting on business and economics - thus leaving behind, for this purpose, Veblen-economics. The essay concludes on a personal note; the author concluding that there is no point being the last out of town subscriber to the print edition of the NYT, when the newspaper itself has discounted the nature of its offering to fit the economics of online advertising - the author concludes that he should treat himself precisely as the Times does - as someone picking it up online for free.The essay does not address the issues raised by recent proposals to allow newspapers to become nonprofit ventures, but they are present by implication, because the essay goes to the heart of the changing business model of newspapers, as newspapers - on economic, not political grounds - leave behind news as traditionally understood in favor of a model of group solidarity and what Cass Sunstein described as group think cocooning. Veblen-economics is not a convincing account of a charitable purpose for newspapers, although these issues are present by implication and not written out in the essay. The essay is the extended version of a short op ed, A Requiem for My NYT Subscription, also posted to SSRN.

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