Jun 272012

Speculation that News Corporation is going to split into two could be the straw that breaks the back of the media industry.

News gathering has always been subsided by other revenues, mainly advertising in newspapers and commercial broadcasting.

Since the rise of the internet, most of that advertising has followed the audience elsewhere and newspapers have only held on because some advertisers are slow to break the business habits of the last 150 years.

Rupert Murdoch’s News Corporation took that subsidisation to another level, with profitable pay TV and movie divisions also subsidising the print operations that allowed Murdoch to reach his position of power.

Should News now split those profitable operations away from the declining print divisions, those in the news media are going to find themselves in an even bigger world of pain as their revenue declines become even more apparent.

We could be seeing the end game for print in News Corporation’s move. The challenge for all of us now is to figure out the journalism model that works in an era where information is a commodity and there’s no guarantees of easy advertising revenue.

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