After reading Warren Buffett’s remarks in the Wall Street Journal (“Buffett Sees ‘Unending Losses’ for Many Newspapers”), I am amazed by some of the prognostications rattling around the media about the future of newspapers. Besides Mr. Buffett’s remarks, I heard Ken Doctor (Outsource.com) say that “all newspapers” were looking at 20 percent loss in ad revenue this year, while he was being interviewed on NPR yesterday.
The truth is somewhat less simple. There are more than 2,000 newspapers currently operating in the US. Of these, less than 200 are bigger metro dailies owned by chains. These are truly in trouble – big trouble – due to loss of classified (auto, real estate, and recruitment) and department store ad spending. The status of the other 1800+ is far different. Most of these are smaller newspapers serving suburban, rural, or small town markets. In many cases, they remain the premier local media channel in the markets they serve, since many don’t have local TV or big radio. These papers have seen some erosion in ad revenue, as have all “offline” media. However, they have not seen the dramatic drops played out in the larger markets. For the most part, they never had much of the revenue that’s gone in the first place, so they don’t miss it. Additionally, since they are (still) the premier media outlet, they continue to get the levels of ad revenue they got in the past (or something close to it).
Mr. Buffett, Mr. Doctor, and many others blithely condemn the whole on the basis of evidence relating to the few. Moreover, they forecast a future that is a continual replay of the recent past. Neither position is logical or reasonable. Short answer: these guys are wrong.
Tags: classifieds, dailies, ken doctor, local media, newpapers, offline media, wall street journal, warren buffet
1. Loss in the classified area has crippled many more than metros.
2. Circulation is down across the board. (Forget ABC numbers, we all know readership is down even worse)
3. They are still the premier media outlet because the world has flocked to a new paradigm. It’s called the Internet.
The facts are that the revolution that is happening has just not trickled down to the local level, but no one, and practically no industry is immuned.
Short answer: You are also wrong.