The future of newspapers — a Q&A

Michael Urlocker, a former Bay Street technology analyst who is now a management consultant, has a relatively new blog called On Disruption, and an interest in how industries such as media are being disrupted by Web technologies. He and I got talking via email about how newspapers are (or should be) dealing with some of the forces that are acting on them — something I’ve been writing and thinking a fair bit about, and something we talked about at the mesh conference last month — and then it kind of turned into an email Q & A about those issues, which Mike has posted on his blog. Here’s an excerpt:

It doesn’t take a genius to figure out that the Web is one of the biggest growth areas, and one that news organizations of all kinds need to find some way of working with. Not that people won’t continue to read newspapers, because they will — in the same way people still go to the theatre to see plays. There are just a whole lot fewer people doing that than there used to be, and anyone in the theatre business or the play business has had to deal with that change somehow.

To me, a news organization has to focus on what its core skills are — whether it’s breaking news, investigative journalism, social and cultural coverage, opinion and analysis, political coverage or local news, or some combination of all those things. If anything, people need the kind of filtering and aggregating and analyzing function that newspapers bring to the table even more now that there is a firehose of information coming at us on the Web. News may increasingly be a commodity, but context is more important than ever.

If you need any evidence that newspapers are in a world of hurt, Mike has links to some nice (or not so nice) graphs, including this one — which tracks readership declines from 1964 to 1997 — and one which shows the decline from 1999 to last year. It’s interesting to note that the industry has seen the same size of decline in the past seven years (about 10 percentage points) as it saw in the previous 30 years.

Mike also points to these recent comments from legendary value investor Warren Buffett:

“Newspapers face the prospect of seeing their earnings erode indefinitely. It’s unlikely that at most papers, circulation or ad pages will be larger in five years than they are now. That’s even true in cities that are growing. But most owners don’t yet see this protracted decline for what it is.

It’s hard to make money buying a business that’s in permanent decline. If anything, the decline is accelerating. Newspaper readers are heading into the cemetery, while newspaper non-readers are just getting out of college. The old virtuous circle, where big readership draws a lot of ads, which in turn draw more readers, has broken down.”

Leave a Reply

Your email address will not be published. Required fields are marked *