Newspapers are vital to our communities and to the democratic process. True or false?
If people speak with their pocketbooks, and I believe we do, the answer is false.
Big Doesn’t Mean Best, But Big It Is
The $1.2 billion merger of Virginia-based Gannett and New York-based New Media Holdings Group is now complete, forming the nation’s largest newspaper chain.
What will this merger mean for newspapers and news readers? Could this be a good thing? Or is it a final chapter in a sad news story?
Of the 200 daily newspapers at the newly merged Gannett Company that file print circulation numbers publicly, more than 80 percent are losing circulation at a faster rate than the national average, according to Don Seiffert, Managing Editor of the Boston Business Journal.
The total weekday circulation at those newspapers was 2.95 million as of this past June, down from 4.34 million as of two years earlier. As of June, Gannett said that its digital-only subscribers totaled 607,000 — less than a third of its print subscribers. At GateHouse, online subscribers make up less than 20 percent of its print circulation.
Print publications in the U.S. are losing subscribers at an average rate of 12 percent a year, according to a July 2019 report by the Pew Research Foundation, and revenues at most local and regional newspapers are going down as a result.
The Oracle of Omaha Says Newspapers are “Toast”
Warren Buffett, the world’s third wealthiest man, bought The Omaha World-Herald and other newspapers in a $200 million deal in 2011.
At the time, I asked, “Is the old man getting sentimental, or is this truly a wise investment?”
The Oracle has since softened on the newspaper business. Last April, Buffett said the newspaper industry gradually transitioned from “monopoly to franchise to competitive to toast”, largely because of declining advertising sales. “They’re going to disappear,” he said.
To understand why Buffett thinks the party is over, it helps to understand why he believed newspapers worked in the first place.
“It was survival of the fattest,” he explained. “Whichever paper was the fattest won, because it had the most ads in it. And ads are news to people.”
“They want to know what supermarket’s having the bargain on Coke or Pepsi this weekend and so on. I mean, it upsets the people in the newsroom to talk that way, but the ads were the most important editorial content from the standpoint of the reader,” he said.