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Dying Days of March Madness

March madness is here! Starting tomorrow we're in for the 3 week long party known NCAA men's basketball tournament. We should probably make sure we enjoy it while it lasts.

As everyone knows, newspapers are a dying breed. The internet killed them. Not because of the ubiquity of news outlets though - although competition for the user is fierce. News is everywhere. It's just you can't make any money with it.

Pretty regularly a reporter or columnist or analyst will come out with an article/ report claiming the fate of the newspaper industry hinges on a paywall. Of course this is all nonsense. Newspaper circulation revenue is always dwarfed by ad revenue. If newspapers converted every online user today to a subscription model, the newspaper industry would be still dying. It's not enough. The ad model for that underwrote what we know as the modern newspaper is broken and it ain't ever getting fixed.

Ok, so what's that have to do with March madness? Well, as goes the newspaper industry, so goes the TV industry. Viewership is dying. Advertisers realize that buying an expensive ad on TV carries no reliably measurable ROI. Other alternatives do - and so the dollars will migrate.

Of course,TV ad revenue is what pays for expensive content like the NCAA tournament - and the NBA, NFL, MLB, Olympics, etc. When the ad revenue goes away, television networks will find themselves in the same spot as newspapers: trying to figure out a way to underwrite the expensive content they distribute. And like newspapers, if they try to rely on circulation revenue (PPV, webcast, etc.), it won't come close to what they make today.

So tomorrow when you're watching the games, and marveling at the high production value and listening to the many overpriced analysts give their thoughts on the minutiae, make sure you enjoy it. My guess is it ain't gonna last.

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Comments (2)

Good post - I was thinking the same thing while watching the super bowl this year.

mike:

Ironically, if TV could figure out how to replicate the superbowl model - the one show where people actually look forward to watching the ads - to the rest of their programming, they would be in a lot better shape. Don't know how you do that though....

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