The biz model needs innovation

Chris O'Brien, a veteran business reporter for the San Jose Mercury news wonders were the innovation is in newspapers' business model.
Earlier this month, he was one of the Mecury reporters who waited for a call to see if he still had a job. That call never came, which means O'Brien has now survived six rounds of buyouts.
He was part of a group that has worked to bring innovative practices inside his newspaper, but what scares his most is lack of creativity for newspapers' business model. The model, he says, is dying.

What we have is a business model problem. Even as our audience has exploded, our revenues have cratered. It's hard enough for newspapers to experiment with their content. But playing with revenue models is the real third rail. Almost all the money still comes from print. Which means ads. But all this fails to impress advertisers. For the dollar they pay us to advertise in print, they pay a dime to advertise online.
What truly surprises me is what I see (or don't see) happening outside of newspapers. Even the most innovative minds I know will describe their dazzling vision for new content, and then insist they will pay for it because this content will optimize things for advertisers. This is true for countless Web 2.0 companies. Even Facebook, for all its hype, can't seem to figure out any other business model than some twist on selling ads.
Is this it? Is this what we're stuck with? Why is there all this energy around reinventing the content and almost none being directed toward reinventing the business models? It represents a failure of imagination.

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