The New Economics of Newspaper Competition

Numerous newspapers over the country are going bankrupt.  At the same time, some, such as the Times of London, the Wall Street Journal and the New York Times, are planning to raise access fees.  How to explain this?

Newspapers in several metropolitan areas across the country have gone out of business or become solely web-based "papers," due to competition from the world wide web.  This is probably in large part due to the fact that for most people the WWW has become more efficient, higher quality, and free (as far as the marginal cost is concerned, once you've already subscribed to an internet provider), as a system for obtaining your daily news.  In other words, we are no longer willing to pay for just information, since we have a much better source, the WWW.


But now that informations/news has become abundant and easy to obtain, the need has shifted to needing a source to make sense of all this information overload.  This is where magazines have the comparative advantage.  We are willing to pay for high quality analysis, but not information.  And since the desire, if not sheer need for meaningful and discerning analysis of this sea of information has become more acute, magazines that deliver this are well-poised to increase their market power.  This is being manifested in their ability to raise prices without losing readers.


Which newspapers will thrive?  According to this line of reasoning, the ones which become more like magazines, and provide quality analysis as oppossed to just news/information.  Perhaps there is a gap between the weekly analysis that a magazine such as Time, Newsweek, Fortune etc provides and a need for real time, daily analysis that newspapers can provide.
But this perspective implies then that the boundaries between newspapers (such as the WSJ, NYT, Washington Post, LA Times) which offer quality analysis and magazines (such as Newsweek, TIME etc.) are set to blur.