Newspapers -- Finding a New Business Model

There has been a lot written lately about the demise of newspapers. We know that the old business model no longer works. More people get their news and entertainment online. And, fewer people purchasing newspapers means fewer eyeballs, and fewer eyeballs mean that newspapers can't attract advertisers nor can they get them to pay a premium for more eyeballs.
Instead of experimenting with new models, most newspapers just post the news online for free. This makes it even more unlikely that anyone will pay for a newspaper, since the news is no longer news when you receive it in print. To add to their problems, newspapers have decided that the few remaining subscribers should pay what it costs to deliver the newspaper. The San Francisco Chronicle has raised the six month delivery charge for Fri-Sun from $29 in 2007 to $52 in 2008 and now to $117. If they were doing pricing research, they found my price barrier. In order to find a new business model, newspapers have to become NeoMarketeers. They need to ask online and offline readers as well as non-readers to differentiate and separate types of content into the following 4 buckets. And, they need to determine the price elasticity for each. Add this to a demographic and geographic profile, and -- surprise, surprise -- newspapers will have a very nice segmentation on which to build their new business model:

• What I Need to Know
• What I Want to Know [use of RSS feeds]
• What I Didn't Know I Need to Know [education]
• What I Know I Don't Need to Know -- But Want Anyway [entertainment]

I think we need to get the conversation going here -- for the sake of newspapers and for the sake of those of us who still relish holding a newspaper in our hands in the morning.