The Harsh Economics of the Digital Transition

Moneybox
A blog about business and economics.
March 5 2012 8:18 AM

The Harsh Economics of the Digital Transition

Brian Stelter summing up a Project for Excellence in Journalism report: "On average, for every new dollar the newspapers were earning in new digital advertising revenue, they were losing $7 in print advertising revenue."

The good news is that the basic cost structure of producing and distributing a digital product is lower. Servers and bandwidth are cheaper than paper, ink, trucks, gasoline, and drivers. But the basic dynamic is unforgiving. You can really sort of see the business problem if you flip the question on its side. As a reader you could be afflicted by the problem that you have extra time to devote to reading online, but can't find enough interesting content to fill the hours with. Alternatively you might find that you don't have enough time to read all the available stuff that seems interesting. Most people are, I think, much more beset by the latter problem than the former one. And that's a huge problem for people in my line of work.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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