No News Isn't Good News

Apparently, a Democrat, Senator Ben Cardin, thinks that the newspaper industry of America can be saved by giving the newspaper companies a non-profit tax status (See Full Story). This just shows how out-of-touch our lawmakers are when it comes to taxes and businesses. It also exposes the fact that Democrats, too, think taxes hurt businesses. Something that a Democrat like Cardin wouldn't otherwise admit.

First, for the clueless Ben Cardin, I have a surprise: Those newspapers who are in jeopardy of going bankrupt or who have gone bankrupt are already non-profits because they aren't making any money. Because of this, they aren't paying any taxes. Paying taxes is not the problem.

Simply speaking, the problem with the newspaper industry is their business model. A model that, in essence, hasn't really been changed since the days of Ben Franklin; except for advertising.

The nation's newspapers are losing money because they are still operating with a massive printing and distribution infrastructure that can't compete with the low costs of delivering news vis a vis the Internet. Today, even though the population has grown, circulations have fallen off and have left them holding a big bag full of expensive printing presses, distribution trucks and all the supporting labor that is greater than their current levels of circulation.

First, I think they need to make a move to completely abandon paper for their news. The process of printing the news on paper is just too expensive.

Using the Internet is the first step. In the past, attempts to charge for Internet news distribution have failed. That's why I think they need a two-tiered system of distributing the news. They need to provide a free cursory news service that is expanded upon by a fee-based service. Think of the cursory service as being the sample candies being given out at a candy store to promote sales.

The in-depth, fee-based news could provide expanded news and commentary (the op-ed's), and even expanded want ads, obituaries, and expanded sale ads and coupons. The sale ads actually have a large audience. The monthly price should be reflective of the lowered operational costs. They should also give people an opportunity to read the online, fee-based news at a pay-per-view rate that is equivalent to buying a newspaper at a newsstand.

I also think that the industry can help itself by collectively developing a cheap, effective hand-held electronic reader that is akin to today's eBook devices (See Wikipedia Overview). The price target should be under $30. This is important because many people can't be tied to a PC for their news. They need the freedom to read the news on a train or on a bus or while having their breakfast coffee, or whatever.

The device should have the ability to download the complete news in just a few seconds. It should support public and private WIFI and should have a USB port to download from a PC. The power should come from a standardized and easily replaceable source like AAA batteries that are either rechargeable or replaceable.

Now, the only problem with all this technology is that the poor won't have access to the information. For this, I would suggest that the news companies provide gratis news kiosks at libraries and other public buildings.

Certainly, this plan of action won't save those companies that are currently in bankruptcy and may completely go under. However, I think something like what I have outlined above could be the savior of the industry. That's just my opinion.