Media: Online news has bright future, newspapers not so much
The New York Times writes about how no one wants to buy newspaper companies anymore. Of course, GateHouse Media’s woes get a mention. But they saved the money paragraph for the last:
Despite the long-term challenges, analysts and bankers think that buyers will return to the newspaper market, though they may be outnumbered by people who decide to invest in online news start-ups instead.
It makes sense. Printing news on paper and hand-delivering it door to door strikes me as inefficient. And the free market is supposed to weed out the inefficient and replace them with those who can delivery the most goods for the least cost.
And THAT is one reason for the drop in value for newspaper companies. Why invest in the print media when the market is just waiting for the inevitable?
Of course, some newspaper companies have problems beyonde those that are common in the industry right now. GateHouse stock closed at 44 cents Friday. I have no idea how it will close today, but even if the stock doubles in value, it won’t be enough to keep it from being delisted.
At least if GateHouse enters bankruptcy, there’s one thing that won’t stand in the way of the Journal Star being sold in one piece: Debt from the paper’s new printing press. I had been worried that anyone who bought the PJS would also get stuck with the debt for the multi-million presses. I’ve been told by someone who should know that this isn’t the case.
August 4th, 2008 at 1:59 pm
Not counting the cost of the computer, I pay $25/month for internet access. I only pay about $18/month for a daily subscription to the Journal Star. So, for the consumer who doesn’t have/need/want internet access (statistically, 30% of U.S. residents are still not internet users), subscribing to the dead-tree version is more cost effective.
August 4th, 2008 at 2:02 pm
… And folks too poor or cheap to buy a computer are SOOOOOOO the target audience that newspaper advertisers are trying to reach.
August 5th, 2008 at 9:06 am
Let me see if I understand your logic here, Billy.
1. If you don’t buy a computer (and, by implication, internet access), then you are either poor or cheap.
2. Poor and cheap people are not the target audience of newspaper advertisers.
I think there are other reasons why one may choose not to buy a computer besides the two possibilities you state in (1). And as for (2), I think poor/cheap people would welcome the opportunity to receive coupons and know when things are on sale. Who do you think Aldi’s target audience is? Or Cub Foods’?