Pearlstein: publishers are following the wrong story

Steve Pearlstein, a business columnist for The Washington Post and recent winner of the Pulitzer Prize, writes today about the struggles in the newspaper industry.
He says, "a lack of vigorous competition slowed the pace of innovation and allowed publishers and editors to make decisions about what readers wanted and needed without listening carefully to the readers themselves...there is no way to save the industry as long as the people who own it insist on returning to the days of 20 percent profit margins."
Pearlstein says to survive and prosper newspapers must:
* Have a large enough reader base to support a core of experienced and well-paid editors and reporters. And they need to be large enough to support not only a printed newspaper but also a Web site and a range of news products the company can offer to advertisers.
* Take advantage of combining newspapers and other media outlets in a single region -- "clustering," as it is called in the industry. That doesn't mean readers won't be able to get news and advertising targeted to them -- technology makes that possible.
* Understand that consolidation by itself is not a magic bullet and won't succeed in the long run if the efficiency gains are not invested back into new technology, top talent and product improvement.
For the entire column click here.