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Summary:

Craigslist is once again being blamed by some for the decline of the newspaper industry, since it allegedly siphoned off billions in advertising revenue — but this ignores all of the other factors that combined to disrupt the newspaper business.

Maybe it’s the rash of newspaper sales recently — including the acquisition of the Washington Post by Amazon CEO Jeff Bezos and the sale of the Boston Globe to local businessman John Henry — but there seems to be a renewed interest in assigning blame for the rapid decline of the newspaper business, and one name tends to get the majority of the criticism: namely, Craigslist, the free classified-advertising service that some say killed newspapers.

In a recent piece for The New Republic, for example, Alec MacGillis accuses Craigslist founder Craig Newmark of hypocrisy for helping to put together an ethics guide for journalists, a project that Newmark has been working on — and also helping to fund personally — for some time now, along with the Poynter Institute. The New Republic writer argues that this kind of commitment is pretty rich coming from the guy whose service allegedly killed newspapers by sucking the lifeblood out of the print advertising market.

The internet killed newspapers, not Craigslist

Classified local newspaper advertisement and computer mouse

MacGillis seems even more incensed by the fact that Craigslist used to make money by charging for the posting of adult services, although what that has to do with anything isn’t really clear (the company shut down its adult listings section in 2010). Perhaps the point is that the site took money away from entities who produce valuable journalism and other beneficial pursuits — which would make sense if it wasn’t for the fact that most newspapers produce plenty of their own disposable and low-brow content, and have since before the internet came along.

“Ethics for journalists! How wonderful. Are those ethics different than the ones that allow one to make $36 million per year on prostitution ads, thereby making it easier to give away for free the classified listings that were a major source of newspaper revenue? Just checking.”

Leaving that part of his case aside, MacGillis’s argument that Craigslist killed newspapers is absurd, and always has been: as anyone who has followed the industry knows — and as Dan Mitchell points out in a piece at SF Weekly — the printed newspaper business has been decimated by the disruptive effects of the internet itself, and the unbundling of the tasks that a newspaper traditionally performed, something Clay Shirky, Emily Bell and Chris Anderson did a good job of outlining in their “post-industrial journalism” report last year, and something disruption guru Clay Christensen has also described.

Was Craigslist a part of this phenomenon? Of course it was. Newmark’s site, which he set up to make it easy for his friends and neighbors to post items they wanted to sell, took advantage of the internet and the social web to become a huge force in classified advertising, and there’s no question that had an effect on the advertising that went to newspapers. But Craigslist wasn’t the only online provider of free ads, by any means, nor was it the only disruptive force that ate into newspaper ad revenue — the entire internet arguably falls into that category, including a little company called Google.

Craigslist is just a scapegoat

The same problem appears in a new study from NYU’s Stern School of Business, which looks at Craigslist’s impact on the newspaper industry and concludes that it siphoned more than $5 billion from the classified advertising market over a period of years — which, according to the study, caused newspapers to implement a range of steps including boosting their subscription prices and putting up paywalls. But just as MacGillis does, the study looks at Craigslist in a vacuum, as though it was the only site on the internet that had any kind of disruptive effect on newspapers, which clearly isn’t the case.

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The reality is that the decline of print advertising rates and the resulting effect on newspaper revenue would likely have occurred with or without Craigslist, driven by the explosion of webpages and ad providers and the advertising industry’s increasing desire to focus on digital markets, not print-based ones. And those factors were arguably compounded by the newspaper industry’s focus on dumping commodity news content onto the web without approaching it as a separate market, the way web-native providers did.

Blaming Craigslist for the death of newspapers is like blaming Napster for the decline of the record industry: it makes for a convenient scapegoat, especially when the members of the market that has been disrupted don’t want to focus on how their own mistakes and ignorance helped push them off the cliff.

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This post was updated on Thursday to reflect the fact that Craigslist used to charge for adult services but has since shut down that section of the service.

Post and thumbnail images courtesy of Flickr user Zarko Drincic and Shutterstock / Feng Yu

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  1. thank u for stating the obvious. =)

  2. I’d go even a step further and say that newspapers killed newspapers, not the internet. When the laws against media consolidation were repealed in the 90s many media outlets (papers, radios, etc.) were bought out by profit focused types who bleed them dry. There’s a market for quality journalism, but closing bureaus, reducing coverage, gouging customers on classifieds, and filling up the pages with nothing but spam is not how you seize it. It’s not that the news people didn’t adopt the web fast enough and it ran over them, it’s that they had zero resources to put towards it because short term profit was the priority. Say the internet never happened… other independent competitors would have sprung up and put the old players out of business regardless.

  3. The National Association of Newspapers reports classified sales of $133B from 2000-2007. According to the NYU study Craigslist displaced $5B in sales for that period. As a negative impact of under 4%, that’s hardly a compelling case to say CL killed newspapers.

  4. I don’t think that everyone that is saying that Craigslist killed newspaper classified revenue is “blaming” Craigslist. Newspapers are to blame for the death of newspaper classified revenue. Craigslist was, after all, a long-time coming and newspapers failed to take note, and failed to “be” Craigslist when they had every opportunity to do so. They had the audience and the huge sales staff.

    1. Great point, Sharon.

  5. Edwin Warfield Thursday, August 15, 2013

    Market fragmentation started before the internet – the alternative press provided a more cost effective vehicle, the biz journals took the B2B dollars, the unions stifled innovation, the public markets cried for higher margins….. this was before the internet.

  6. Hanna Perkins School Thursday, August 15, 2013

    You are right: Craigslist alone did not kill the newspaper industry. What did? Disruption in many forms. Fast changes in reading habits, marketing models, online display advertising, social media, search engines AND online classifieds are all parts of that disruption, and they are all (duh) internet-related.
    From where I sat in the media business in the first generation of the internet, nothing did more damage than Google Adwords and the concept of paid search. But that’s just one man’s direct experience.
    Dinosaur-style management played a role too – no question about that. It still is.
    People will always try to over-simplify bad news to find a single culprit. In the case of newspapers, if you insist, that culprit is the internet.
    Now go try to argue that Craigslist doesn’t exist because of the internet. Until you can do that, you can’t write Craiglist out of the story of the destruction of newspapers.

    1. Speaking of the internet: oops. I wrote the previous content while logged in on a different Twitter account. I am not Hanna Perkins School; I am @bobrosenbaum

    2. Thanks — good points.

  7. Nothing killed newspapers. They died of natural causes. The main one being the change in readership literacy, and interest in citizenship. The growth of faith-based reality has made made fact-based news reporting of less interest to more people. This is the result of the ebb of democracy. It is worth noting that among the the various forms of human governance, democracy is historically the most fragile, is based on a high degree of commitment to learning by its citizens and is the shortest lived. The decay in journalism, which is one of the essential pillars of democracy is died to the decline of that form of government not to any trivial media forces. The fact that we now live in a corporate socialist state (too big to fail anyone?) explains much more simply why real journalism is fading than any discussion of its various manifestations and implementations such as newspapers, blogs, etc.

  8. No Craigslist is not responsible for the death of newspapers. $5B is too small. but if blame-goating is the game, consider this:
    from 2004 to 2012 google’s adv revenue increased by 40.6 B to 43, while newspapers’ dropped 26B to 22.

  9. The internet did severely damage newspaper revenue. The decline of newspaper actually started before the internet as investment companies took profits and laid off reporters. Circulation was dropping prior to the internet, as has been pointed out, for a number of reasons. But newspapers aren’t dead; they have not been killed. We are still very much alive and in thousands of communities across the country still the single source of deep community reporting.

    One other point – the internet is not a portal for a thousand Googles, a thousand Craigslists, or a thousand Facebooks. It is a medium for goliaths. Even if one newspaper, or several, would have developed any of these models it would not have provided a platform for competitors; it would have crushed them in the same fashion.

  10. You can’t blame newspapers for failing to produce their own Craigslist before Craiglist and owning the classified market. They could not have done so simply because it would reduce their own revenue. Yes, in the long run that would have been smart. But there is no way in heck that they would have been able to convince owners/managers to take that hit.

    So, they became helpless victims, trapped by their own business model. There was simply no other viable outcome in the long run.

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