Economies of Scale

How can old media (such as newspapers) compete in the digital age?

Perhaps by seeking to take advantage of serious economies of scale.

News International has recently opened a new printing press in Hertfordshire which covers an area the size of 23 football pitches - and offers quieter and faster (70,000 papers per hour) production of both broadsheets such as The Times and Sunday Times, as well as Britain’s favourite tabloid, The Sun. In addition, the headcount of people needed to run the new plant is 200 - compared to 600 with the old facilities. It is perhaps the least labour intensive printing facility in the world.

Will this bring down the price of these newspapers?

For those who say newspapers are in decline, this £650m investment suggests they may be around for some time to come…

Issues for consideration include: if content moves (free to source) online, how do publishers recoup revenue from a private good turned public good?