Yesterday, the New York Times ran a story that described the paper’s strategy as trying to be the Last Man Standing.  Nicholas Carr today picked up on that in his post on newspapers today and writes:

Make sure you have enough cash to ride out the storm, trim your spending, defend your quality and your brand, expand into the new kinds of products and services that the web makes possible and that serve to expand your reader base. And then sit tight and wait for your weaker competitors to fail.

He goes on to say

Once you radically reduce supply in the industry, the demand picture changes radically as well. Ad inventory goes down, and at rates go up. And things that seem unthinkable now - online subscription fees - suddenly become feasible.

This argument is based on the idea that the removal of geographic boundaries has created a vast oversupply of news relative to demand.  While that is certainly true and while it is an important part of the problem, there is another part that this analysis completely ignores: The unbundling of content.

In the age of a physical, expensive to print and distribute newspaper it made perfect sense to get political, economic, culture, sports etc coverage all from one source.  It would have been cost prohibitive to get it from many different sources!  But this was an entirely cost induced form of aggregation.

With the web, however, the point of aggregation is shifting to the reader, with the help of intermediary services such as Google Reader, Techmeme and many others being built.  I can get my sports coverage from say ESPN, my politics from say Politico, my economics from say a variety of blogs such as Becker-Posner, and so on.  In fact, I wrote a post a while ago where I titled “Who Will Be My New York Times?” where I talk specifically about this.

Therefore I don’t believe in the Last Man Standing strategy for a broad paper that covers the whole gamut.  That kind of supply based bundling does not make sense going forward.

I do, however, agree with two parts of Carr’s piece.  First, micropayments as a salvation as proposed time and again (most recently by Walter Isaacson) won’t work for the reasons he lays out.  Second, I believe that there is a future for subscription services but it is much more likely to be for deeply focused offerings.  Imagine someone who is an expert on biotech.  They could use a free blog to build an audience and reputation (and SEO juice) and then offer a paid subscription with more in-depth analysis or with a timing advantage on a subscription basis.  Such a business could be extremely profitable because the focus will help keep the cost low even if this person were to employ analysts to help gather data.