Cow had some thoughts on newspapers competing in an online world, in response to
Michael's Blog. She is reproducing them here.
The entertainment industry has always been curiously behind the times in providing ancillary content that the customer wants: ie the Star Trek conventions of the 1970's put on not by the content originator but by entepreneurs. The same reluctance of the entertainment industry to provide products led to a black market of photos, scripts, items from movies/tv, with all profits accruing to third parties.
Just as high-quality movies and television shows can't be produced by the general public though, neither can newspaper stories be produced by people sitting in front of their computers. SOMEBODY must actually go out and GET the news, photos, interviews, etc. This is the actuality the bottom line that cannot be substituted by someone creating a site in front of their computer.
With the cost of admission covering costs of movies, and the cost of advertising covering costs of television, the obvious model for newspapers is to either raise admission prices (price of printed or on-line newspaper) to emulate the entertainment industry and thus cover the cost of production, or develop other streams of revenue.
Newspapers could integrate to be web communities with messages, posting boards for every story, etc. But there isn't an easy way to make money off this except in the same way newspapers always have: sell advertising around the edges of the content, whether printed or online.
Developing ancillary products (analogous to the photos, conventions, dvds of the entertainment industry) and selling them successfully to its online community would open an entire new horizon for newspapers. Think, for instance, of the millions of dollars action figure licensing brings: all that is needed to translate this to the newspaper model is the cult of personality...develop the good-looking, charming or otherwise attractive reporters, then market their looks instead of just their written output.