I remember a few years ago Warren expressed his dismal view on Newspapers future (in his annual shareholder letter). A few days ago Redstone (the controlling shareholder of CBS and Viacom) said something similar in an interview.
“The reason we have not gone to newspapers is because its a slow growth industry and I think they are dying. I’m not sure there will be newspapers in 10 years. I read newspapers every day. I even read Murdoch’s Wall Street Journal.”
I am a newspaper reader. I subcribed to Barrons and WSJ (paper format). Both my wife and I preferred the paper format, because we can mark on it, and it seems to me I think more when read something on paper (vs. computer). Lately I am seeing some interesting phenomena: the WSJ gets thinner and thinner; sometimes I did not receive the paper.
Business problem of newspapers
Newspaper business was caught in a perfect storm in my mind: as more people get news online (via a piece of paper), Google Ads and web advertising in general is taking away a lot of advertising dollar from traditional print media (newspaper and magazine); auto and housing sectors, which made up a large piece of newspaper Ad pie, are losing money left and right; last year the soaring of commodity cost (from oil to paper) with declining subscriptions, increased the cost of running a newspaper. Other costs, hiring journalists, and labor union are pretty much fixed cost for the newspapers. Also keep in mind, many newspapers had large debt, which put them into undesirable position in this credit crunch (I remember Chicago Tribue filed bankrupcy a few month ago).
How about the online business of newspaper? After all, they can do the display ads or google ads themselves, right? But in this area, they are no longer the local monopoly. Basically they serve as an agent or a distributor for Google (double click) or Yahoo.
What’s the future for newspaper?
I cannot imagine the days without newspaper. Maybe I am too old fashioned. Remember 10 years ago we all used landline phone. Now almost all of us go mobile. We can get news from Google, Yahoo or MSN.
Also, if some newspapers survive (in the cyberspace), maybe we can get them from iPhone or Amazon Kindle? Save the trouble for printing/delivery?