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The Fate of Newspapers: Farm It, Milk It, Or Feed It

Posted by samzenpus on from the end-of-an-era dept.

Hugh Pickens writes "According to Alan D. Mutter, after a 50% drop in newspaper advertising since 2005, the old ways of running a newspaper can no longer succeed, so most publishers are faced with choosing the best possible strategy going-forward for their mature but declining businesses: farm it, feed it, or milk it. Warren Buffett is farming it, and recently bucked the widespread pessimism about the future of newspapers by buying 63 titles from Media General. He is concentrating on small and medium papers in defensible markets, while steering clear of metro markets, where costs are high and competition is fierce. 'I do not have any secret sauce,' says Buffett. 'There are still 1,400 daily papers in the United States. The nice thing about it is that somebody can think about the best answer and we can copy him. Two or three years from now, you'll see a much better-defined pattern of operations online and in print by papers.' Advance Publications is milking it by cutting staff and reducing print publication to three days a week at the New Orleans Times-Picayune, thus making the Crescent City the largest American metropolis to be deprived of a daily dose of wood fiber in its news diet. Once dismantled, the local reporting infrastructure in communities like New Orleans will almost certainly never be rebuilt. 'By cutting staff to a bare minimum and printing only on the days it is profitable to do so, publishers can milk considerable sums from their franchises until the day these once-indomitable cash cows go dry.' Rupert Murdoch is feeding it as he spins his newspapers out of News Corp. and into a separate company empowered to innovate the traditional publishing businesses into the future. In various interviews after announcing the planned spinoff, Murdoch promised to launch the new company with no debt and ample cash to aggressively pursue digital publishing opportunities across a variety of platforms. 'If the spinoff materializes in anywhere near the way Murdoch is spinning it, however, it could turn out to be a model for iterating the way forward for newspapers.'"

6 of 167 comments (clear)

  1. subscriptions - shooting themselves in foot by kevinroyalty · · Score: 5, Interesting

    my local paper i only want on sunday. in attempting to subscribe for sunday only, they say "no, you have to take it friday/saturday/sunday". i say "sunday only, or i don't subscribe". they wouldn't budge. guess what i decided :) on the occasion i want a sunday paper, i go to the local gas station which is not far from my place and pick up a paper. i won't be shedding any tears when they fold (ha!)

    1. Re:subscriptions - shooting themselves in foot by Anonymous Coward · · Score: 5, Interesting

      My pet peeve is how they keep treating loyal subscribers worse than new subscribers. I don't understand why either: They practically incentivize canceling your subscription. It's the same with mobile phones.

    2. Re:subscriptions - shooting themselves in foot by kevinroyalty · · Score: 5, Interesting

      I think you viewed my comment with too wide a brush. let me try to explain. i used to be a newspaper carrier back in jr/sr high school (5.5 years). my customers asked me for newspaper subscriptions like "i want sunday only" and "i want wed and sun only". this was fairly common. when i'd call the newspaper and tell them the amount of papers to deliver each day, they didn't care how many per day, and complied with no issue. the end result: customer happy, me (carrier) happy. i made good money for the short amount of time i worked each day to do that job. so with that knowledge and that now we are 25+ years in the future, i don't see why i can't have the subscription option i want. as a customer, if you want my business, you need to 1) listen and 2) deliver what the customer wants, or they move on and you don't have them as a customer. you get enough of that and you go out of business. the whole point to this, is that the newspaper wants me to subscribe based on THEIR schedule and for me to pay for 3 newspapers a week, when i WANT only 1. Here Mr Newspaper, take my money. No, we want 3x the money and you get 2 more items you don't want. no thanks. no wonder newspapers are dying. Kevin

  2. I guess they are milking it here by Anonymous Coward · · Score: 5, Interesting

    Where I live (Vancouver, Canada) both dailies are run by the same company. They print the same stories and have the same pro-corporation slant. One of them uses smaller words and dumbs things down a bit, but they are basically exactly the same. As a cost saving measure and as an ultimate sign of cheapness and laziness, these papers reprint, annually, the exact same stories word for word. The editors are told what their opinions are and quietly promotes whatever rubbish the owner tells them to. There are so many "special information supplements", info-marketing inserts, infomercials, and advertisements disguised as news articles that it just has to be illegal.

    Tell me why I should care if these papers die. As far as I'm concerned it can't happen soon enough.

  3. It's the tragedy of the commons by Anonymous Coward · · Score: 5, Interesting

    Everyone thinks the news is free since it's all just a click away. There are lots of great aggregators like Google News, Yahoo, Bing, as well as specialty aggregators like Slashdot.

    SOME news is free. Flikr and tweets by passers by are free, but a worldwide professional staff of reporters, editors and publishing infrastructure (either print or online) is expensive to maintain and will not survive years of wholesale freeloading.

    Longtime newspaper readers have already noticed a substantial drop in the quality of almost every big major newspaper in the country (except for maybe USA Today, which is the exception that proves the rule) over the past ten years or so. They've all had to let go a large part of their staffs.

    So just as people are whining that they don't make pop music the way they used to, so we're starting to see that with the reporting of the news. Yes, there will be plenty of news to read, more than you'll have time to read, but the quality has gone down and will go down further.

  4. Re:So? by benhattman · · Score: 5, Insightful

    That doesn't make any sense. Digital distribution is cheaper, which means you can have more competitors than you could with print distribution.

    What's killing news is that digital means there are essentially no more scoops. When a story comes out, it is on every cable news channel well within the hour, and posted on every digital newspaper within minutes, and news aggregators like HuffPo within seconds. Before, a true scoop meant your had the only paper publishing a story that day. Not only did that garner eyeballs, but it brought prestige too. Now it mostly means increased news consumption overall with a lot of that consumption going to your competitors with no compensation for your own paper's work.

    Which is why news agencies have been cutting their staff for years. It's cheaper for everyone to ride the coattails of someone else. It's even cheaper to have interns watching twitter for trending stories. The bottom line is news is both a product but also a public good, and like many public goods capitalism may not be the optimal structure for maximizing it's non-monetary benefit to society.