Is There A Case For Optimism In The Newspaper Business?

from the going-private dept

For obvious reasons, the stock market has not been kind to newspaper publishers of late. Their weak performance has prompted many companies to explore the idea of going private as a way of making painful changes to the business outside of the public eye. Last week's announcement that billionaire Sam Zell would buy out the Tribune Co. was the first of what may be a number of similar moves. The natural question, then, is whether newspapers will actually perform any better as privately held entities, or whether the claim that public markets focus too much on short-term results is just an excuse. Either way, any plan to rescue the industry will have to involve a smarter internet strategy than what newspapers have shown so far. As one journalism professor from UNC puts it, newspapers need to realize that there's no going back to the past. These companies will never enjoy the monopolies on information that they once held or the fat profits that came with those monopolies. That sounds really obvious, except that some publishers believe that a return the the past is possible. The alternative to turning back the clock is to embrace the future, which means plunging headfirst into the online realm. It's very unlikely that the internet will prove to be a total substitute for much of the business that the newspapers are losing, but these companies really don't have much choice. The good news is that most newspaper heads seem to be recognizing this, Sam Zell's recent boneheaded statements about Google notwithstanding. A survey of publishers in Europe suggests that many recognize that the internet can complement the newspapers' traditional business lines. By recognizing this, these publishers are making the deeper realization that they're not in the newspaper business, but in the news business, which is where they need to be. For his own sake, hopefully Sam Zell will figure this out as well.


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  1.  
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    Dave Barnes, Apr 10th, 2007 @ 10:54am

    I see both types of ownership every day

    I live in Denver, CO USA and subscribe to both the Rocky Mountain News and the Denver Post.
    The Post is privately held (Media News) and the Rocky is publicly held (Scripps-Howard).
    I think both newspapers are blowing it.
    However, the Rocky seems to be slightly smarter than the Post.

     

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  2.  
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    Hal Clark, Apr 10th, 2007 @ 10:56am

    Go talk to HP

    Sam Zell thinks print news still has a future. HP thinks they need to prepare for a future where digital media is used far more than print media. Someone here is right and someone is wrong.

    In a wispering tone....... Pssst, Sam you need a vocab lesson dude. Its called traffic margin not profit margin!

     

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  3.  
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    C.H., Apr 10th, 2007 @ 11:13am

    How newspapers can survive

    Too much of the modern newspaper industry depends upon the A.P., which is silly and short-sighted. If they want to increase their readership, not only do they need to embrace digital content delivery (and ways to monetize that delivery), but that content also needs to be targeted local content.

    I recently cancelled my local news paper. I could get more regional news by listening to my NPR affiliate, and I could get national news from the internet. My paper gave me no compelling reasons to keep my subscription. In fact, they started to blur the separating advertising and editorial, which drove me away much quicker.

     

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  4.  
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    Casper, Apr 10th, 2007 @ 11:59am

    I am a bit bias..

    I hate news papers. They give you the news later then every other source, they waist huge amounts of paper, they are deliberately inefficient to read, and most of the companies are so horribly managed that to sign up for or cancel service becomes an ordeal.

    Right now there is a news paper being delivered to my house that I did not order. I called them and told them to stop sending it. They keep sending it. I have never paid a bill, I have never been called about it, it just keeps coming. I don't bother to pick them up any more. They stack up for a week and I do one big load to the garbage can. I often feel compelled to wait out in my yard for the delivery boy and chase him off with a stick or maybe pitch rocks at him until he promises never to come back.

     

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  5.  
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    The delivery boy, Apr 10th, 2007 @ 12:07pm

    Re: I am a bit bias..

    Dude, don't shoot the messenger.

     

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  6.  
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    Tashi, Apr 10th, 2007 @ 12:57pm

    I work for a newspaper (which shall remain nameless but it's pretty damn large) and more and more resources are going toward the online platform. The good news is... in the case of my paper, they are very competitive online. They also recently partnered with another huge Internet company.

    More good news... newspapers can focus on and target local demographics with print in a way that is still very advantageous to them.

    Bad news... investors are willing to forgo long term gain for short term profits. This leads to gloom and doom predictions from Wall St. that are way overstated, because people want their money now, long term projections be damed. The funny thing is my paper has always been profitable. Hugely profitable. Sure some tough cuts and tough decisions were made, but they were always way in the black. But for shareholders, it was never profitable enough.

     

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  7.  
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    Casper, Apr 10th, 2007 @ 3:07pm

    Re: Re: I am a bit bias..

    "Dude, don't shoot the messenger."

    If you saw the "delivery boy" you would be right next to me throwing rocks...

     

    reply to this | link to this | view in thread ]

  8.  
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    wifezilla, Apr 10th, 2007 @ 3:10pm

    I got so sick of my local crappy papers that my husband and I started our own. Unlike many of the other area rags, we have this weird thing called "original content".

     

    reply to this | link to this | view in thread ]

  9.  
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    Sramana Mitra, Apr 10th, 2007 @ 3:40pm

    Newspaper Industry Turnaround Strategy

    I don't see why not. You may want to read my article, Newspapers: Industry in Turmoil for an overview of the strategic manueverings going on, and more importantly, should be going on. Regards, Sramana

     

    reply to this | link to this | view in thread ]


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