No, Craigslist is not responsible for the death of newspapers

26 Comments

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

26 Comments

insider

Online advertising on content sites is not working. Every news site I know of is failing in selling ads online. But why buy the cow when you can get the milk for free? Don’t give the milk away for free. Every newspaper in the nation should go dark on the Internet for one month then come back with pay walls. The problem with the media business today is that it is run by media people, not business people. Whose bright idea was it to give away for free online what you had charged for in print?

Janet DeGeorge

The internet did not kill newspapers, the internet is SAVING newspapers. Craigslist is an online shopper, an all ad product. Newspapers had been dealing with free shoppers for a hundred years, nothing new there. What Craigslist took was the private party market which was only about 5% of classified revenue. The first huge drop in classified revenue was in Recruitment from the Dot Com bust and competition from Monster.com. NAA failed to bring the newspapers together in a product to combat Monster like other countries did. However, NAA did give us a 1999 program called Classified in Crisis outlining exactly how the internet would disrupt our business, years before Craigslist. AOL, then the online leader, went to several large newspapers trying to get them to see how classifieds and the internet were a perfect match as far back as 1992 and to set up partnerships with them. But at the time, it was like a foreign language to us. What killed the bulk of the classified revenue …the recession. Never before had every classified category been so decimated. Auto, Employment and Real Estate, where the real money was. But with recession over, newspapers can rethink their print/classified strategy and take back their classified market. It is happening all over the country, heck, even Salt Lake City dominates over Craigslist. . What keeps all newspapers from getting their market back? Lack of elbow grease.

Jim

Sorry Terry. I did not see your comment before I posted mine. Craigslist’s impact on classified advertising was more than financial. It taught the consumer how to use the internet at a much lower price than using the newspaper. Craigslist was just the beginning. And don’t forget, Craig only charged for employment ads in the classified space. That’s 4 billion in pretty much only help wanted. The other types of classified advertising were free and wouldn’t show up in the stats, but certainly did damage to the newspaper classifieds’ revenue.

Jim Stoch

Craigslist did not kill newspapers. Newspapers killed newspapers by not seeing the internet wave coming to crush them. Craigslist did, however, kill classified adverting. We saw Craigslist’s growing popularity and solid results beginning to take hold in 2002. By 2006, the San Francisco Chronicle reported that Craigslist had cost SF Bay Area newspapers over $50 million in lost classified revenue. The only area Craigslist charged for was for job postings. Selling items, real estate, cars was all free…and advertising on Craigslist worked. Plus, in the Bay Area, Craigslist charged $75 for a job posting, much cheaper than a help wanted ad in the local papers…and those worked very well.

Some day, one will be able to read in marketing textbooks how the internet changed the face of advertising and how Craigslist took on the huge newspaper industry classified business and won.

Tom Foremski

Craigslist, using the Internet, took away billions of dollars from the US newspaper market. If Craigslist hadn’t done it, then some other web service would have done it. The Web made it possible to cherry pick classified ads and not carry the cost of supporting a news desk.

What’s amazing is that Craig Newmark is constantly asked to comment on journalism and the newspaper industry. I’ve known Craig for many years, he lives close by and I like him a lot but he has no training in journalism, or has spent any time studying the newspaper business. He has never claimed to be an expert on journalism or newspapers. Yet people continue to ask him to speak at conferences, panels I’ve been on, and many other public appearances related to media, PR, and newspaper demise. That’s not his strength, he’s a software engineer.

Patrick J Scanlon

In print we made our money by making our readers lives more convenient via classifieds (private party in particular). We made it easier, and more effective, than a reader placing a sign on their front porch telling the world they had a frig for sale. We rented them the traffic we had in print. In exchange they gave use a small amount of $. Additionally, papers were often a monopoly and therefore never had to actually compete with anyone. So they ended up taking $2 from you, $10 from him, $ from her… and all those added up to a “real” revenue stream.

How? By doing something old fashioned and putting the customer first – and trying to find ways for us to make our readers/customers lives more convenient/better/…

Jamie Patterson

I have been reading newspapers every day since I was 12 years old. I have quit reading newspapers now that I’m in my 50s. The hateful hypocritical trivia that passes for news is of no interest to me. My mood has improved and my wife says that I am happier now. I am more trustful and less fearful of others. Life is good! Newspapers do not cover new products in this technological world. They do not help me to live a better life such as how do I landscape to use less water. ( I know! Look it up on the internet because the newspaper is useless!). They do not have cooking sections or travel sections. Newspapers spend their money to hire talking heads to complain and rant to get a reaction from their readers. By inflaming their readers newspapers hope to have readers “tune in” everyday for the latest ranting episode from their columnists. Newspapers today are simply following the talk radio business model.

Will Buckley

As a digital rights activist working on behalf of artists, I am more than familiar with the back and forth, but am somewhat surprised by the need to write a lengthy article in defense of Craigslist.

The reality is, for a number of reasons, we are at risk of losing printed materials, whether it be newspapers, magazines or books. If you’re like me and don’t want to
see printed works disappear, then support them.

If you want to keep our culture alive, contribute. Because if you don’t it will surely disappear.

William Buckley Jr., Founder FarePlay

Jamie Patterson

Other than the New York Times, can you name a newspaper that provides culture in a positive uplifting way on a daily basis?

I do not want to keep alive the culture of hate and fear that I see in newspapers. I would also like to see the culture of gloom and doom go away too.

Rick Hake

Newspapers need to focus on local news, and those of us who enjoy holding the paper and reading in over a cup of coffee to start our day need to face the fact that we will have to pay more.
For decades newspapers have depended on Advertising to carry the bulk of the costs of production. Advertisers have found they can get for a lot lower costs with their own websites. Craigslist is a poor excuse to blame for newspapers loss of ad revenue. It is not even a reliable source to advertise.
Newspapers will have to charge more for copy with little of no ads, and focused local news. For our newspaper this means we will stay a weekly, and won’t be spending any money seeking advertisers. If they want to be in our paper they will have to seek us. Even then only our back page will have ads, and they will be business card ads from local businessmen.
A lot of the demise of papers in our part of the country has to do with liberal bias from the very heavily dominated left wing press. We have a large following begging a for more conservative voice, and we intend to continue to provide that, but it will be more on the price of a magazine.
Rick Hake – Editor
Apple Rogue Times
Grants Pass, Or

lundefische

To Terry’s comment that Craiglist has a $5B impact in a $133B local ad market from 2000-2007, I would contradict and say that $5B can in fact destroy the larger market, especially in offering free services in what was once a $25 local posting (except for HR ads). Free internet free services “creatively destroyed” during this time period. While Craigslist is to be noted as one reason revenue declined (and I’m not blaming them any more than I would blame automobiles for destroying the buggy whip market) there were so many other factors. The principal fault lies with the newspapers. I remember in 1998 that we all discussed how in fact the newspapers could stay alive, what new services could be offered. I was close to a company that Larry Schlang had created (with the WashPost) called IntraActive that would provide the type of services that people would actually (continue) paying for. But instead many of the newspapers stayed free online without innovating (i.e. burying their head in the sand) or set up a paywall without offering much else (i.e. thinking linearly), and some like the NYTimes and WSJ benefitted at the expense of local papers (I’m in LA so thus I saw the LA Times take a dive) and even offered multimedia and other things to make the paid online subscription more of a value equation. I’m actually very excited to see what Jeff Bezos offers up for the WashPost, perhaps a new type of Kindle subscription, but maybe a new type of leadership that will include newgen journalism. None of us want journalism to go away, and while online surfing and tweeting is amazing it is all bells and whistles to the central core to the main course of great journalism. Whether it’s to late for many of the regional presses or not will be because of passionate leadership and technological reinvention. It’s never too late but many won’t survive — that much is certain.

Scott Jensen

Sorry, but you’re wrong. The Internet didn’t kill newspapers. Speed killed newspapers. Yes, the Internet is faster than newspapers but so is 24/7 cable news networks.

Back when the only national TV news was the “morning news” and “evening news” on the broadcast TV networks and their affiliates, they weren’t really challenging newspapers for news consumers but COPYING the way newspapers fed news consumers. Twice a day (morning and evening) both newspapers and broadcast TV fed news consumers. In fact, people would read their morning newspaper while eating breakfast while the “morning news” played on their TV sets in the kitchen or dining room. Same thing happened in the evening with dinner for many households. If anything, newspapers had a leg up on broadcast news because people’s newspapers were waiting for them on their doorstep when they woke up or arrived home. TV news was almost a supplement to newspapers. It provided the moving visual for what they read in their newspapers.

That all changed when CNN came along. Now TV news WAY out paced newspapers. [The concept and even the phrases “morning news” and “evening news” started to then fade away … except on broadcast networks who still to this DAY have such programs and mindsets.] With CNN, you could always catch the news. ALWAYS. Not just at home but at work, in waiting rooms, at airports, EVERYWHERE. And all of this happened LONG before the Internet became a reality for the public.

Then finally CNN got competition from Fox News Channel and MSNBC. And CNN clearly viewed them as a threat as CNN then rolled out Headline News. No talking heads. A straight cable news channel that essentially repeated itself every half hour. But with FNC and MSNBC as competitors, people finally had choice and, I believe, that brought even more people to watching cable news. I know many friends who flip between these three news channels whenever a commercial breaks comes to one. Eventually expect to see an app for smart TVs that does just that. When one cable news channel goes to commercial break, it flips the TV to another cable news channel and possibly back to the original one when it comes back from its commercial break … or not. Maybe it will just flip when the “new” channel goes to its commercial break. Maybe the app will even DVR the other news channel(s) to payback what it hasn’t shown yet while the original news channel is on commercial break and then viewers will use their remote control to fast forward through that DVRed content to what they want to watch.

Read interviews with the people who run cable news networks as to who they see as their competition. It isn’t newspapers. It is the Internet. They race each other to get the news to news consumers. What are newspapers today? They’re trying to fill the role that newsmagazines once filled.

Remember newsmagazines? TIME, Newsweek, and US News & World Report held their own for decades against newspapers by supposedly giving more depth to the news … or at least taking a little more time to reflect on it and writing more words about a news item than what newspapers gave the news. But Newsweek and US News & World Report no longer exist. Newsweek was sold for ONE dollar plus the assumption of all its liabilities. Both now exist only online but they’re insignificant news sources. When was the last time you heard them breaking any news story? As for TIME, ever pick up a copy of it lately? I mean literally physically pick it up. It is so thin that it is essentially what would pass as a Sunday supplement (e.g. Parade) in newspapers these days.

Now newspapers are trying to become the newsmagazines of our time. Can they? I believe it is their only hope, but … no, they won’t be to do even that. Unlike newspapers, the Internet gives a reporter unlimited space to write whatever they want. Oh, and that reporter is actually called a “blogger” today. You know those writers on the Internet who actually fact check what reporters on TV news report as well as fact check what politicians say. Dan Rather, we’re talking about you, bud! Yeah, you!

The death knell for newspapers will be when environmentalists finally lose their fear of attacking them and start going after them. And when the tree-huggers do, newspaper printing presses around the world will grind to a halt. The neo-pagans will demonize newspapers as scourges of the environment since people can get their news online and on TV which neither require the chopping down of a forest everyday to provide news to the public. The Gaia worshipers will also demonize anyone subscribing to, selling, or advertising in newspapers as just as bad. How long do you think any supermarket chain will continue to carry newspapers once environmentalists start picketing their entrances for selling them? Selling newspapers is practically a public service by supermarkets these days and not a profit center. Once one supermarket chain gives into the eco-totalitarians, they’ll move to the next chain and the next one. Meanwhile, environmentalists will start going after people who subscribe to newspapers which environmentalists can easily spot by the newspaper mailboxes affixed to the poles that hold up their US Post Office mailboxes. How soon do you think people will, out of fear of having their mailboxes being attacked by tree-huggers, cancel their subscriptions and take off their newspaper mailboxes? And think about how fast local advertisers will stop advertising in their local newspapers when the neo-pagans start picketing their businesses for doing so.

What Gigaom should do is start talking to and reporting on environmentalist groups who are showing signs of losing their fear of newspapers and who are beginning to think about attacking them. Posing such questions to their leaders and see where they currently stand on such a shift and approach. Maybe this is still too early. Or maybe it is just about to happen and Gigaom can get a jump on other online news sources in reporting on it first. Either way, it would be interesting to know what such eco-leaders think about such an idea.

Laird Popkin

Exactly. The newspapers’ problem is that they lost their gatekeeper control over the distribution of news. There used to be one newspaper per city, and that newspaper distributed news, classifieds, ads, etc., as one business, with the news attracting readers who were monetized by the classifieds and ads. Now, with the internet, those are independent businesses, and the newspaper isn’t a gatekeeper.

So blaming Craigslist is missing the point – the internet enabled startups to bypass the newspapers and take their classified revenue, and Craigslist just happens to be the most successful, but if it hadn’t been for Craigslist it could have been any number of others that they could blame instead. eBay certainly comes to mind. But the real “culprit” is that the internet eliminated gatekeepers.

Newspapers, Record labels, TV, it’s happening to all of them. TV’s just happening a bit more slowly because video files are large, and the internet isn’t as good at moving video – the economics of broadcast video genuinely are better than unicast video, so it’ll take longer for internet bandwidth to drop in price enough that broadcast will completely lose the platform advantage. Then they’re just making money as trusted brands, not as gatekeepers.

So the smart newspapers decided they were brands that people trust as sources of news and embraced the internet. The local newspapers are screwed, if all they did is reprint AP stories and cash checks, because they’ve not earned a relationship with the reader that the reader values.

Ron Larson

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.

Reed Anfinson

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.

albert

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.

td

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.

Hanna Perkins School

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.

Hanna Perkins School

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

Edwin Warfield

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.

Sharon Hill

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.

Terry Garrett

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.

garrettrayj

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.

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