these 'utilities' (because that is a really good way to think of the mature industry companies) can argue for a higher return is if they in fact were to innovate, which would require a short term lower rate of return for perhaps a period of time with higher returns achieved later if the innovations bear fruit. But to extract the return before any innovation is the travesty.

Banking had its own problem. Can banking really innovate? They argued yes and proceeded to create all these 'new products' and this supposedly justified the outsized returns. But it turned out to be mispriced risk.

Once any product has paid for its innovative investment should fall to a commodity level rate of return that should be no more than 5% to 10%. It can only be higher through government monopoly protections or the harvesting of excessive equity.

You are missing the point which is that print media, instead of investing in the technologies of the future and the ad revenues that would come with it, engaged in wealth extraction as the parade passed them by. Who was in a better position to exploit the burgeoning electronic demand for information than traditional media, particularly print media? Again the problem was wealth extraction ahead of investment.

...of the future that suddenly allows a daily newspaper to out compete ebay and craigslist for classified ad revenue? What's the magic fix that gets ad buyers to put the display ad back up onto its pedestal in a fragmented media market that increasingly has transnational catchment areas? Even if one unchains the daily from delivery of product on paper - something that has only recently become viable, they're still toast compared to their competitors. The "solution" [really resolution] is to a very large degree not about technology - it's about the middle of the market basically being killed. Even with the zippy doo da technology that's [maybe] finally about 18 months out [been 18 months out, I've been repeatedly assured, for something like 5 years now] I have the distinct feeling that what one is going to see when the dust settles is a literal handful of viable national papers and a lot of stuff that's not much above the community free paper, with very little that's much good in between. Notably that means that the majority of major NA markets are going to be served by one paper that's a ghost of its 80's self. The question at this point is really where it is that journalism is going to live, because a lot of it that used to live at the major market dailies isn't going to find a home there anymore.

More concretely to the point of the original assertion, where exactly was the wealth extraction in the Toronto newspaper business? I don't doubt it's happened in a lot of markets, but I don't see it in this market and I have a feeling that it is far from being a universal explication.

“The absence of any US-Iran bilateral channel...may have the perverse effect of reinforcing Iranian interest in progressing in the nuclear realm so that the US will be forced to take it seriously and engage it directly." ~ Richard Haass

...developments that I've seen over this period pretty consistently indicate that the guys with the good general alternative model that they've already established somewhere have a big advantage over local initiatives when trying to set up competing products. Doesn't seem logical, but that's how it's worked out in a number of markets. As an example, the various chained freebie papers (e.g., Metro out of Northern Europe) generally seem to have triumphed over the local competition, unless the local competition had been previously established - and even then, they not uncommonly felt the increased competition quite significantly and I suspect actually occupied somewhat different niches (e.g., weekly entertainment vs. daily commuting). I just don't see a lot that gives me confidence that the typical metro daily could generally have out competed something like craigslist. Undoubtedly there are some, but I'd bet a good deal that they're the exception rather than the rule - look at all the challenges they had just replicating the typical paper online.

It's easy to say with hindsight that these guys could have done something else and clearly should have done something else, but I don't know how damning the criticism is at the end of the day. There were an awful lot of attempts to monetize alternative forms of delivery - they just didn't work. The readership just wasn't having it for a whole range of reasons and now, frankly, they're going to reap what they sowed.

“The absence of any US-Iran bilateral channel...may have the perverse effect of reinforcing Iranian interest in progressing in the nuclear realm so that the US will be forced to take it seriously and engage it directly." ~ Richard Haass

I run a small publishing company serving a dedicated local market place. I compete against national brands which supply information on a national basis and which emphasize online access. I started databasing my information in the 1978-1982 period and created an internet product emphasizing local info to compete with the nationals who, by the by had always competed in my market. Maybe that alerted me to the threat they posed, but frankly the potential of electronic information was so obvious and so exciting at the time that I would have moved down that path regardless of competition.

It was obvious to me what was happening and I had scant resources to manage. But we compete successfully. I am not applying hindsight.

Local newspapers had a virtual monopoly on local ads. That they failed both to invest in their futures and to understand that those local ads were as important as information as were the news stories which, after all, are mostly pr releases to which some "objective" gloss is added, and that they were not just a source of revenues is simply pathetic.

Yes the will reap a scant harvest from their lack of investment.

...daily doesn't, small size and nimbleness front and centre, I would say judging from your experiences. There's more to it than that, I'm sure (clear product vision, smarts, early start etc.), but as an example the number of things I've heard my friends talk about that were judged to be impossible to implement because of moribund labour agreements is pretty large (roughly as distressingly large as the number of things that management boned, I'd say).

The guys that I talk to definitely never failed to understand that local ads (classified and display) were critical - in spite of their attempting to keep them, those ads went away and nothing that they were able to do kept them successfully. From where I sit, that suggests they got out competed pure and simple.

Me, I think it's all a pretty thorny set of problems and more than just the other guys were too stupid to see what was going on; folks have been telling me what was going on for years - their papers just couldn't come up with anything that was better that still fit into their business model. Seriously, what does the local product that's better than craigslist, that a metro daily could have developed, implemented and not ultimately lost market share to the established transmarket competitor look like? I (apparently like much of the newspaper business) am having a failure of vision. Even at this probably too late date, if you've got insights I'd very, very much love to hear them. Similarly, what thing gets the major ad buyers to turn away from the [to my mind spectacularly false (but probably not a lot more false than the traditional buy, in fairness)] promise of cheap buys of tuned impressions targeted at particular demographics?

I just have a tough time ascribing all this simply to profit taking and lack of investment. I certainly saw lots and lots and lots of money invested in trying to head off these challenges [at least in theory] over the last decade or so. From where I sit, as an outside observer and dedicated consumer of product, it wasn't a lack of willingness to spend to try and find solutions so much as it was the extreme difficulty of finding something that fit in with the rest of the enterprise.

“The absence of any US-Iran bilateral channel...may have the perverse effect of reinforcing Iranian interest in progressing in the nuclear realm so that the US will be forced to take it seriously and engage it directly." ~ Richard Haass