If the major reason for the American daily newspaper industry’s demise were its stories contained too many dangling participles, then the industry could more easily comprehend its situation than instead hearing that the reason was it had violated the Principle of Supply & Demand.
The understanding of economics, particularly media economics, has never been its strong suit, except if the topic is how many tons of newsprint to buy, how many points a major stock market dropped, or how cut expenses to match revenues. Most newspaper publishers, editors, or journalists tends to equate economics as solely the science of government financial policy, household spending, Wall Street speculation, and petroleum pricing. They don’t understand or have forgotten that a major branch of it is the behavioral science of Microeconomics – the study of how individuals make decisions to allocate their time and activities.
The main paradigm of microeconomics is known as rational choice theory or rational action theory, which states that individuals choose the best action according to their preferences and what constraints of supply, demand, time, and access face them. In it now lays the demise of American daily newspapers as we know them.
How did the American daily newspaper industry violate the Principle of Supply & Demand by failing to adapt the industry’s core product to a radical change in consumers’ supply of news and information during the past 35 years? To understand how, both start and end at the roots of the newspaper industry.
Start in the European city of Strasbourg during 1605 when the world’s first newspaper began publication. It used a technology developed there 164 years earlier by the metalworker Johannes Gutenberg, who had invented
Some modern critics of newspapers say the industry is leaden and ‘doesn’t think outside the box.’ They probably don’t realize the historical irony that underlay their criticisms. The core of Gutenberg’s technology was a box containing lead type whose impressions could print innumerable copies of the same thing. In that core is the inherent limitation that it produces the same edition for everyone. Although in the 19th Century steam and later electrical power speeded Gutenberg’s technology and the introduction of offset lithography during the middle of the 20th Century eliminated its use of lead, the analog technology used to produce today’s daily newspapers is still Gutenberg’s. Indeed, today’s analog printing technology still has the same limitation that it had in Gutenberg’s days – it produces the same edition for everyone.
That technological limitation delineated the newspaper industry’s editorial and advertising practices during the past four centuries. Because each edition had a finite number of pages and was printed by analog technology had to produce the same for everyone at once, newspaper editors had to select stories according to two criteria: