Last week, Chronicle business columnist Chris Tomlinson wrote about the contradictions in the newspaper business. Interestingly, what he calls contradictions are really an admission of his own confusion about how a free market operates.
For example, he writes
The industry itself was founded on a contradiction. Historically, publishers focused on selling paper more than news. Revenue came from selling advertisements, the journalism was there to entice readers to look at the ads.
Tomlinson doesn’t explicitly identify the supposed contradiction. But apparently, providing news in order to sell ads is somehow a contradiction. But the basic premise is a model that has been used by many industries–provide something very inexpensively (or for free) and charge the advertisers. The Yellow Pages did it for decades and so did broadcast television and radio. That’s not a contradiction. That is just monetizing a business model in the most efficient way. But Tomlinson doesn’t stop there.
He points out another “contradiction”:
The newspaper, revenues and print circulation may be thinning, but our main competitor, the Internet, has driven our readership to record highs.
The free market is a dynamic market. It is constantly changing. The essence of the free market is creating values, and this can happen in countless ways. The Internet has opened up new ways to create and deliver values. And it has given newspapers a way to reach a much broader audience.
In a free market, individuals and businesses can create and trade values as they deem best. Entrepreneurs seek to find better ways to create and trade values. And consumers, always eager to get more bang for their buck, seek better ways to attain the values that they want and need.
There is nothing contradictory about this. Businesses must change if they are to compete. They must adopt new technologies and reach new markets. To claim otherwise is to admit one’s confusion about the nature of a free market. And that is a sad admission for a business columnist.