photo by Mario Tama/Getty Images
They are profitable. What, you say? According to the Washington Post, newspapers did not take the hit other businesses did during the recession. In fact, “[m]any newspapers, especially those outside metropolitan areas where competition for readers and ad dollars is most intense, still generate profits, albeit at lower levels than in the boom years of the 1980s and 1990s. They also have valuable real-estate assets and printing operations.”
Profits may be falling, but there’s still profit, even for big holders of newspapers, like Gannett.
People read the physical paper as well as the online version. Online reading of newspapers is up 6% in the first quarter of this year, and the majority of newspaper readers are aged 18-49.*
(Long form journalism — magazine features — is popular with the “social media” set as well.)
In other words, Warren Buffett is not an idiot buffoon like Sam Zell, who bought the Tribune Company, then ran it into the ground. Zell saddled the Tribune with his own debt when his real estate holdings tanked. “I’ve said repeatedly that no matter what happens in this transaction, my lifestyle won’t change,” [Zell] wrote to his combination employees/shareholders. “Yours, on the other hand, could change dramatically if we get this right.” (With over 4,200 layoffs since you took over, I guess you got it “right,” Sam? Congratulations.)
Forbes: Are You Stoned Or Just Stupid?
Forbes asked in a recent blog post if Buffett is stupid or just sentimental. Neither one, guys. Maybe the purchase of his hometown paper was sentimental, but he bought 63 daily and weekly newspapers this month (May 2012). He promises to be “hands off,” and let people who know the newspaper business do their job (also the opposite of Zell’s approach). He says he plans to buy more!
But What About All The Fleeing Advertisers?
Good question. They’ve been leaving print in droves. Personally, I like seeing fewer ads in my favorite magazines and newspapers – less clutter. I look at media for the articles. In fact, I’d love to not see ads on television…
Dish Network is offering a new black out service! No need to fast forward through those commercials – you won’t even have to see them! Ha, ha, ha, corporations! You can’t get me! Or, you can go back to buying ads in the newspaper… hmmmmmm.