Warren Buffett says papers “are toast”

[Readallover]

Even a civic-minded billionaire who owns newspapers now sees the demise of the industry:
Warren Buffett Sees Most Newspapers as ‘Toast’ After Ad Decline

 

[Junkie]

If this is the quality and caliber of breaking news in Buffet's paper, then, yeah.

 

[Lugnuts]

Not all papers are doomed, though. The New York Times, the Washington Post and the Wall Street Journal will survive, he said.

Why will they survive?

 

[Slacker]

Not all papers are doomed, though. The New York Times, the Washington Post and the Wall Street Journal will survive, he said.

Why will they survive?

National audiences, including digital.

 

[Sam Mills 51]

Not all papers are doomed, though. The New York Times, the Washington Post and the Wall Street Journal will survive, he said.

Why will they survive?

What Slacker said ... national audiences, digital presence.

Also, they actually put reporters to work and haven't slashed and burned to cut their way to profitability. Yet ... they've made money, informed the public and haven't tried to asked to public to pay significantly more to get significantly less. Imagine that.

 

[Fredrick]

Interesting video. The "funny" thing or interesting thing is I'm assuming Buffett has not yet sold his newspapers or shuttered the doors yet. I'm assuming he like everybody else in charge is trying to bleed every possible cent before completing killing the individual newspapers. For instance, it takes a while I'm sure to sell the buildings and make as much money as possible there. Once the buildings are sold, is there a compelling reason for newspaper owners to keep the newspapers running? You've got Buffett saying the business is "toast." Ok ... Gannett, you get it started. Let's start killing the print product and speed up this next phase.

At least Buffett blamed the death on the newspaper business where it belongs: The ad departments and the suits for not figuring ways to sell ads online and in the print paper. The newsroom usually gets blamed for everything. Nice to see Buffett tell the world the real reason. Newspapers can't sell ads (can you imagine the quality of sales person working for newspapers nowadays? Any sales person with an ounce of sense would rather sell suits and ties at a nice clothing store than try to sell ads for dysfunctional newspaper suits.

 

[cjericho]

Does Fredrick see Buffett as one of the suits?

 

[DanOregon]

I got so sick of retiring news execs posting their ridiculous "I still believe in newspapers" memos when Romenesko was still a thing in the 2000s. Most papers blew it by keeping their ad rates high, when they should have been going for volume and keeping people advertising. I don't know if even that would have helped much now with so many big box retailers biting the dust in the last five years. If not for obits....

 

[Fredrick]

Does Fredrick see Buffett as one of the suits?

No, because he is more of a billionaire "observer." He doesn't really care that nobody can sell an ad anymore. Like I said he's one of the guys to profit from the sale of the physical newspaper property. He's one of the guys who is just sticking around bleeding every penny he can from the industry then he'll just announce closings of the newspapers when no more money is to be bled. A suit is somebody who had a chance to keep the business alive on a daily basis and went after the newsroom rather than the ad departments. Like Buffett said, news means nothing; it's all about the ads.

 

[Fredrick]

I got so sick of retiring news execs posting their ridiculous "I still believe in newspapers" memos when Romenesko was still a thing in the 2000s. Most papers blew it by keeping their ad rates high, when they should have been going for volume and keeping people advertising. I don't know if even that would have helped much now with so many big box retailers biting the dust in the last five years. If not for obits....

The suits never saw this coming. They thought this new thing called the Internet newspaper Website would be a runaway hit, thus they gave it away for free. They saw this as a chance for an entire country to read their work and what opportunites ($$$) would come from an entire country reading our stories?? Instead everybody gave away the news for free and 10-15 years later tried to charge for it. Too late.
Just watching Buffett, he knows newspapers are "toast." Right now they aren't hurting his company much just sitting there doing nothing. Eventually they'll be discarded like the little pests they've become to Buffett.

 

[DanOregon]

In a perfect world - news execs would have parlayed their margins into cable companies (some did), you roll that into the internet/wifi and the newspaper is expanded into a local cable news provider providing content. The print product probably shrinks away to nothing, but your news org could expand into lifestyle/home and garden/food and sports (high school, pros, college) content on-line and on TV.

 

[LanceyHoward]

Interesting video. The "funny" thing or interesting thing is I'm assuming Buffett has not yet sold his newspapers or shuttered the doors yet. I'm assuming he like everybody else in charge is trying to bleed every possible cent before completing killing the individual newspapers. For instance, it takes a while I'm sure to sell the buildings and make as much money as possible there. Once the buildings are sold, is there a compelling reason for newspaper owners to keep the newspapers running? You've got Buffett saying the business is "toast." Ok ... Gannett, you get it started. Let's start killing the print product and speed up this next phase.

At least Buffett blamed the death on the newspaper business where it belongs: The ad departments and the suits for not figuring ways to sell ads online and in the print paper. The newsroom usually gets blamed for everything. Nice to see Buffett tell the world the real reason. Newspapers can't sell ads (can you imagine the quality of sales person working for newspapers nowadays? Any sales person with an ounce of sense would rather sell suits and ties at a nice clothing store than try to sell ads for dysfunctional newspaper suits.

There is a professor at Harvard, Clayton Christenson, who has studied innovation and its effect on industries. He found that when a truly disruptive innovation hits an industry that the leaders of the old industry rarely adapt. He said there are two reasons:

1. The innovation is outside the frame of reference of the executives of the old industry. They just don't understand the innovations, its capabilities and its effect on the market.
2. The management of existing firms is trying to transition between the old technology and the new technology. The upstart company that is pushing the new technology is probably going to win a race against the company that is also trying to protects its old market.

How many of the main frame computer companies made the transition to PC's? And the guys who were running a main frame computer company were a hell of a smarter than the typical publishing executive.

 

[CD Boogie]

I got so sick of retiring news execs posting their ridiculous "I still believe in newspapers" memos when Romenesko was still a thing in the 2000s. Most papers blew it by keeping their ad rates high, when they should have been going for volume and keeping people advertising. I don't know if even that would have helped much now with so many big box retailers biting the dust in the last five years. If not for obits....

Especially ones like this

View Richard Seaman's Obituary on ConnPost.com and share memories

 

[playthrough]

I got so sick of retiring news execs posting their ridiculous "I still believe in newspapers" memos when Romenesko was still a thing in the 2000s. Most papers blew it by keeping their ad rates high, when they should have been going for volume and keeping people advertising. I don't know if even that would have helped much now with so many big box retailers biting the dust in the last five years. If not for obits....

Romenesko, there's a blast from the past.

 

[DanOregon]

I just know when I wrote an obit for my family - I didn't get paid by the line anywhere close what the newspaper charged by the line. $2k for a 12-inch obit?

 

[Alma]

Not all papers are doomed, though. The New York Times, the Washington Post and the Wall Street Journal will survive, he said.

Why will they survive?

Two reasons:

1. They're very sophisticated, well-written link farms. Yep, they are. Of course these two organizations do their own excellent reporting, but they also - the Post, especially - look up news across the nation and rewrite, with perhaps a little extra reporting, perhaps not, and fashion it as their own work. The click might - but often do not - get back to the local resources.

2. Millennials and many Gen-Xers prefer national news to local news (except for college sports diehards, but they're being replaced by national sports fans) and national life in general to local life. Millennials choose their "fam" by affinity, connect that affinity to a national audience, and develop their citizenship identity that way. Their news identity is the NYT and Washington Post. Eventually, it'll creep eastward more and more toward Europe.

The true challenge of local news isn't really to get people to care about local news sources. It's to get them to care about where they live, period. Their neighbors. Truth is, we've always had socio-political silos of sorts. But those silos were once built on what was around you - a community identity - for better and worse. Now those silos are built around philosophy, ethos, affinity. An message-board dwelling incel in Wichita Kansas believes an incel in Bucharest has more in common with him than the guy in the apartment next door. That's largely nonsense, but try convincing the guy in Wichita of that.

The local news paradigm has always been "let's cover what we can walk to." The city council. The local festival. The high school sports team. Interestingly enough, news consumers generally still want someone to be doing that. I think news consumers still want someone to be responsible for that, especially if some crook is on the loose. They just don't want to pay to consume it and, what's more, they don't want to - and will not - consume it at all unless it's salacious, because they don't really care. Not when there's the Daily Donald Trump, the Daily AOC, the Daily MeToo scandal, the Daily trend piece about millennials that millennials love to hate-read about themselves. But people increasingly care less about the city council, the local festival, the high school sports team as anything more than vehicles toward something - a place to hang and said you hung, in the case of the latter two. The NYT and Post function in similar fashion. They're part of an intellectual Pinterest, of sorts. They're good for a personal brand. The local newspaper is not.

Not long back, there was a group of single millennials in my local community/social group/church who were interested in having meals with folks outside their age range/worldview/lifestyles. Lots of folks were up for that, and on it went for a time, pleasant enough. It was, and then it wasn't. No particular relationships came of it, in part because the aim - of both sides, really, if they're all honest - wasn't relationship, but acquisition and achievement. Something to say you did or learned. A data point of experience to collect for, I dunno, the kind of thing people collected visiting Notre Dame in Paris, for the day it burned down. It was not actual connection, but the idea of connection. Both sides agreed to the idea as a kind of good. Friend groups did not grow larger, though. They stayed the same. The same 7-8 friends hung out with the same groups, posted the same pictures of each other to Instagram, the families involved proceeded with their photos of kids or meals, and on it went.

The dilemma of local news is bound up in that absence of real community. To the extent local news matters, it generally does so only in its adherence to any given value set, and what can be acquired from that value set. National organizations have inherent advantages there.

I imagine the trend is reversible, but not in the near future. We led 20, 30 and 40-somethings to this water. The Internet did, too.

 

[Readallover]

Two reasons:

1. They're very sophisticated, well-written link farms. Yep, they are. Of course these two organizations do their own excellent reporting, but they also - the Post, especially - look up news across the nation and rewrite, with perhaps a little extra reporting, perhaps not, and fashion it as their own work. The click might - but often do not - get back to the local resources.

2. Millennials and many Gen-Xers prefer national news to local news (except for college sports diehards, but they're being replaced by national sports fans) and national life in general to local life. Millennials choose their "fam" by affinity, connect that affinity to a national audience, and develop their citizenship identity that way. Their news identity is the NYT and Washington Post. Eventually, it'll creep eastward more and more toward Europe.

The true challenge of local news isn't really to get people to care about local news sources. It's to get them to care about where they live, period. Their neighbors. Truth is, we've always had socio-political silos of sorts. But those silos were once built on what was around you - a community identity - for better and worse. Now those silos are built around philosophy, ethos, affinity. An message-board dwelling incel in Wichita Kansas believes an incel in Bucharest has more in common with him than the guy in the apartment next door. That's largely nonsense, but try convincing the guy in Wichita of that.

The local news paradigm has always been "let's cover what we can walk to." The city council. The local festival. The high school sports team. Interestingly enough, news consumers generally still want someone to be doing that. I think news consumers still want someone to be responsible for that, especially if some crook is on the loose. They just don't want to pay to consume it and, what's more, they don't want to - and will not - consume it at all unless it's salacious, because they don't really care. Not when there's the Daily Donald Trump, the Daily AOC, the Daily MeToo scandal, the Daily trend piece about millennials that millennials love to hate-read about themselves. But people increasingly care less about the city council, the local festival, the high school sports team as anything more than vehicles toward something - a place to hang and said you hung, in the case of the latter two. The NYT and Post function in similar fashion. They're part of an intellectual Pinterest, of sorts. They're good for a personal brand. The local newspaper is not.

Not long back, there was a group of single millennials in my local community/social group/church who were interested in having meals with folks outside their age range/worldview/lifestyles. Lots of folks were up for that, and on it went for a time, pleasant enough. It was, and then it wasn't. No particular relationships came of it, in part because the aim - of both sides, really, if they're all honest - wasn't relationship, but acquisition and achievement. Something to say you did or learned. A data point of experience to collect for, I dunno, the kind of thing people collected visiting Notre Dame in Paris, for the day it burned down. It was not actual connection, but the idea of connection. Both sides agreed to the idea as a kind of good. Friend groups did not grow larger, though. They stayed the same. The same 7-8 friends hung out with the same groups, posted the same pictures of each other to Instagram, the families involved proceeded with their photos of kids or meals, and on it went.

The dilemma of local news is bound up in that absence of real community. To the extent local news matters, it generally does so only in its adherence to any given value set, and what can be acquired from that value set. National organizations have inherent advantages there.

I imagine the trend is reversible, but not in the near future. We led 20, 30 and 40-somethings to this water. The Internet did, too.

That was the brilliance of Roger Ailes - recognizing that people want “news” that jives with their way of thinking. Fox is for conservatives, MSNBC is for liberals and CNN is for middle of the roaders. And CNN is dead last in ratings among these three.
And what of newspapers? By adhering to so-called objectivity, papers ultimately speak to no audience anymore. The community isn’t the commonality that binds people together anymore and so goes the local newspaper to its demise. It’s the political tribe that we bond to, the blue versus red states, etc... the neutral ground that newspapers purport to tread is a no-mans wasteland

 

[Slacker]

That was the brilliance of Roger Ailes - recognizing that
people want “news” that jives with their way of thinking.

Jibes, dude!

 

[Shropshire Slasher]

****!

(Golly!)

 

[crimsonace]

There is a Professor at Harvard, Clayton Christenson, who has studied innovation and its effect on industries. He found that when a truly disruptive innovation hits an industry that the leaders of the old industry rarely adapt. He said there are two reasons:

1. The innovation is outside of the frame of reference of the executives of the old industry. They just don't understand the innovations, its capabilities and its effect on the market.
2. The management of existing firms is trying to transition between the old technology and the new technology. The upstart company that is pushing the new technology is probably going to win a race against the company that is also trying to protects its old market.

This is absolutely it. Throughout the transition, newspaper execs kept running newspapers like - well, traditional newspapers (and TV news departments ran like traditional TV news departments). The internet was - and is - seen as an appendage to the "real" product and any changes were made with reference to the old product.

Traditional newspapers = reliance on ad revenue, with subscriptions being a small fraction of the pie. When ad revenue drops, cuts have to be made. People buy the Sunday paper for the want ads and the coupons. By the time newspapers realized the disruption of the internet and online journalism, it was really too late to adapt.

We've seen this is so many worlds. Kmart died when it got undercut by Walmart. It didn't have a niche because Walmart was cheaper and Target/Kohls were perceived to be higher-quality. Sears, A&P, Borders - none really understood how to compete with the changing marketplace. Even Microsoft - which was deemed to be a monopoly less than 25 years ago - has struggled to evolve into the world of mobile computing.

I'm still not 100% sure what the industry is going to look like. A few traditional publications - like the NYT and WaPo - are going to survive, because of their large national reach. The local newspaper is going to struggle, and I fear TV stations - with their ratings and consultant-driven coverage decisions often devolving the news into saccharine visual clickbait rather than depth and meaningful watchdog reporting - will become the primary news outlets in most communities. What's really worrisome is what will happen in a lot of smaller communities, where there's not really the capital to sustain a daily newspaper (and where governments are often the most corrupt).