In the beginning of the news industry, advertisements were the largest income source for newspapers. This was the way production costs like printing were paid for. However, one website changed the future of how news is gathered.
Craigslist started in 1995 as an email distribution service that was sent around one’s network, which has now spread to a multimillion-dollar company, completely online. The popularity of postings regarding furniture, jobs, discussion forms, community news, etc., essentially put the company in control of the pathway of the journalism industry. With Craigslist in place and its growing popularity, people opted out of advertising with newspapers. Craigslist is a site that the public could post on for no or low cost, while newspaper advertisements could cost up to thousands of dollars based on outlet, location and sizes.
Prior to Craigslist, people and organizations would advertise in a paper everything Craigslist offers. This generated a large source of income for newspapers and well as an increased amount of readers for a physical newspaper. The need to discover what the community has to offer made the population feel more inclined to read newspapers. Within a newspaper company, people were hired specifically to sell and organize ad sales. While this is somewhat still in place, advertising branches in newspapers have downsized due to the lack of ad spaces being filled. MinnPost wrote, “But classified ads were the foundation under the entire edifice … the telemarketers in cubicles, shunted off in unglamorous corners of the newspaper building, were the ones who kept the lights on.” Meaning that those in charge of selling newspaper advertisements kept the publications financially afloat.
Many have debated, including Craig Newmark, the creator of Craigslist, that Craigslist is not the one responsible for the decline of sales for the newspaper industry. Many argue that the general public lost interest in the physical form of news, making that the cause of the decline. However, Forbes.com reported on a study done about the subject and wrote, “Craigslist took a giant bite out of newspapers’ revenues – some $5 billion between the years 2000 and 2007.” Whether or not Craigslist is the sole reasoning behind the loss of sales from newspapers, it is clear that there has been a significant amount of money lost due to the website.
Keep an eye out for my next piece in this three-part series, which looks at the reckoning of the newspaper industry and initiatives to go online.