Based on my experience in the industry, it's not that they employ MBA's whose only goal is the bottom line, but rather that they employ execs who really have no business running the types of operations that they do.
Dyed-in-the-wool newspaper publishers get promoted to corporate VP positions, local marketing guys get promoted to run software divisions.
The people at the controls don't fully understand the businesses they're tasked with running, and it shows in the trail of bad decisions, written off investments and failed ventures.
I wish like the parent poster I hadn't touched newspaper stock. If I hadn't, I wouldn't be saddled with MNI shares that are worth 5% today of what they were a couple years ago, even with the employee discount.
Audiotext was a project that most newspaper chains embarked upon in the early nineties, and like most of their other "new media" initiatives, it was a case of spending tens of millions of dollars to chase tens of people.
The newspaper industry has two major problems.
The first is that they are sheep - nobody wants to take risks. They all see something shiny, then attempt to emulate it, spending millions in the process. I sat in many a meeting in my former life as a web manager at a group of small daily papers owned by one of the largest chains having others on the management chain, my boss the publisher and corporate execs telling us "we should look at what newspaper X is doing, we shouldn't reinvent the wheel."
Along with another poster in this thread, I tried for nine years to do unique and innovative things, but I was met with resistance throughout the corporate and local bureaucracy. I've left the industry and haven't looked back.
The second big problem is Wall Street. The dirty secret of the newspaper industry is that it's still EXTREMELY profitable. I'm talking 20-30%. The problem is, this is historically low, from the halcyon days when the margins were 50%+. Most business would kill for a margin in the 20's, and I suspect only healthcare and financial services still can match newspapers in that respect. Yet, because the returns are lower than in the past, stock prices fall, and the industry is considered a financial failure.
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Based on my experience in the industry, it's not that they employ MBA's whose only goal is the bottom line, but rather that they employ execs who really have no business running the types of operations that they do.
Dyed-in-the-wool newspaper publishers get promoted to corporate VP positions, local marketing guys get promoted to run software divisions.
The people at the controls don't fully understand the businesses they're tasked with running, and it shows in the trail of bad decisions, written off investments and failed ventures.
I wish like the parent poster I hadn't touched newspaper stock. If I hadn't, I wouldn't be saddled with MNI shares that are worth 5% today of what they were a couple years ago, even with the employee discount.
Audiotext was a project that most newspaper chains embarked upon in the early nineties, and like most of their other "new media" initiatives, it was a case of spending tens of millions of dollars to chase tens of people.
The newspaper industry has two major problems.
The first is that they are sheep - nobody wants to take risks. They all see something shiny, then attempt to emulate it, spending millions in the process. I sat in many a meeting in my former life as a web manager at a group of small daily papers owned by one of the largest chains having others on the management chain, my boss the publisher and corporate execs telling us "we should look at what newspaper X is doing, we shouldn't reinvent the wheel."
Along with another poster in this thread, I tried for nine years to do unique and innovative things, but I was met with resistance throughout the corporate and local bureaucracy. I've left the industry and haven't looked back.
The second big problem is Wall Street. The dirty secret of the newspaper industry is that it's still EXTREMELY profitable. I'm talking 20-30%. The problem is, this is historically low, from the halcyon days when the margins were 50%+. Most business would kill for a margin in the 20's, and I suspect only healthcare and financial services still can match newspapers in that respect. Yet, because the returns are lower than in the past, stock prices fall, and the industry is considered a financial failure.