Are Newspaper Troubles Just Cyclical Rather Than Fundamental?

from the could-be-wishful-thining dept

While it's been quite natural for many folks to talk about the troubles facing the newspaper industry, it is worth noting that the newspaper business has remained quite profitable over the years. That, combined with a few other factors, has an analyst at Credit Suisse saying that the newspaper business is facing a cyclical slump, rather than as the result of a fundamental problem in the business. Thus, the analyst claims, the business should bounce back, perhaps as soon as towards the end of 2008. One factor in his argument is that troubles in the industry are due to the slump in real estate advertising, and newspaper fortunes should pick up as the real estate market begins to turnaround. While it does seem like pessimism over the newspaper business is overblown, this report is not particularly convincing. First of all, the downturn in newspaper stocks seems to have predated the real estate crisis by quite a large amount -- suggesting that the real estate troubles are only likely to exacerbate other problems. Furthermore, while the report does highlight how newspapers need to become more digitally focused, it's really not as simple as just "going digital." As we've seen time and time again, many newspapers have struggled with the transition, because they still view themselves as newspapers rather than news organizations, and they still seem to take a rather elitist view of themselves as gatekeepers, rather than as facilitators, helping people uncover what's important to them, rather than what the gatekeepers think is newsworthy. So, while we're hopeful that newspapers will figure it out, this particular report doesn't provide much support for the idea that newspapers are managing the shift well.

Filed Under: cyclical, newspapers, real estate, troubles
Companies: credit suisse


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  • identicon
    Sam Erb, 13 Dec 2007 @ 10:25pm

    poof

    Maybe the newspapers are thinking ahead of the curve and know that by the end of 2008 the web with become a DRM'ed, filtered, monitored and DMCA2.0'ed wasteland and everybody will obviously turn back to newspapers and then there biggest problem will be getting the real estate market back to where it was.... just some wishful thinking :D

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  • identicon
    dorpass, 13 Dec 2007 @ 11:24pm

    In one of the latest issues of The Deal, a couple analysts actually thought that newspapers have a sustainable and profitable future as they adjust to using internet

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  • identicon
    Haywood, 14 Dec 2007 @ 3:21am

    Hard to imagine

    Once Real estate advertisers learn to use things like Google Street View and stop walling their gardens on the internet, the likelihood that the will flock back to the newspapers diminishes. I recently was looking for a ranch property, & was amazed at how many places wanted a sign-in just to browse their ads. They even protected to the point that Bugmenot didn't work. Once they get it, like the news sites are beginning to, on-line will be the only way to shop. Right now it is just a source for salesmen to get leads, if I wanted to talk to a salesman I'd have contacted one.

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  • identicon
    danny, 14 Dec 2007 @ 5:31am

    readers?

    independent of real estate ads, conszider that readership counts are heading downward at most major newspapers

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  • identicon
    CHL Instructor, 14 Dec 2007 @ 6:09am

    Newspapers are largely irrevelant already

    I still subscribe to the Dallas Morning News, but primarily because my wife likes it (and they gave us a huge discount for our last renewal). But the things I mainly look for in a newspaper have been pretty much superseded by online source. The help-wanted ads in newspapers have become merely a place for H1-b 'qualifiers' to post, and the for-sale ads have been useless for a long time. Craigslist has made both of those completely obsolete (when I see an H1-b shill ad in Craigslist, I can even flag it for removal!). DMN now 'co-ordinates' with HotJobs.com, but I haven't seen enough improvement in that area to get excited about.

    The front page is stuff I've already seen on the web by the time I get to the paper.

    Even the comics are obsolete. Over half of the comics that I now follow aren't even in the Dallas Morning News (and won't ever be, due to mainstream-news Liberal bias that I'm finding increasingly irritating). The ones that are in the paper and not on the web are ones that I wouldn't miss much.

    About the only things I read in the Dallas Morning News are the local stories (unlikely to make it to global sources) and some ads from local stores. When (not if) those local stories and ads are readily accessible on the wwweb, then the last reason for having the dead-tree history paper dumped in the bushes on my front lawn will be gone forever.

    And that trend is already well under way. Fry's pays a fortune for those full-page ads that they run three or more times/week; much more than enough to keep a website going with real-time information. The last few times I made a local retail non-grocery purchase (I generally stay out of most stores between Thanksgiving and New Year's), I started with an online search for the items I wanted. Local news is more problematic, but the local radio stations are doing a semi-adequate job of filling that niche in a format that is conveniently accessible during my daily commute. And sometimes a radio station will actually warn me about a traffic jam in time for me to avoid it. One of the local stations has started a free subscription service to text-msg traffic reports based on your route and commute schedule -- no reason the paper couldn't do that, but I'd bet money they'd want to charge something for it.


    --
    Legal Requirements to Receive a Texas CHL

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  • identicon
    Anonymous Coward, 14 Dec 2007 @ 12:36pm

    If newspapers only reported what was important to me, they would only print porn and sports results. I would never have a clue what was going on in the world.

    I admire the newspaper industry for looking past my hedonistic desires to learn new sexual technique ... and writing stories on global terror, crack dealing, and other things that are sure to dampen my over sexed life and allow me to focus more closely on violent images and political lies.

    Thank you New York Times !

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  • identicon
    tmaxwellsr, 14 Dec 2007 @ 12:42pm

    Watch the WSJ with News Corp

    too many newspapers see their role as house organs for the Liberal point of view. I think the WSJ,under News Corp, will put a whole lot of hurt on the NYTIMES . Fox News and Talk Radio seem to have few financial issues. Think there is a corelation there? ...... and a message for Newspapers?

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  • identicon
    Yoni Greenbaum, 15 Dec 2007 @ 11:38am

    A new direction is necessary

    Newspapers as I wrote on my blog, editor on the verge, need to examine their core business practices. For too long, they have sought to support their crumpling financial infrastructure by slashing personnel and reducing benefits, this approach has run its course. I firmly believe that new ideas need to be considered, no matter how difficult they may first appear.

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


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