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Famed investor Warren Buffet is shocked at how fast the newspaper industry has declined and isn’t very hopeful on its future.
From the Wall Street Journal
Warren Buffett delivered more doom and gloom news for the state of the newspaper industry.
Asked about his views on the struggling industry, which has seen a rising trend of diminishing revenues and distribution in recent years, the investor said he believes “the math is really tough.”
One reason: About three-fourths of all newspaper’s revenues came from advertisers. Now, with competitors such as Google and online ad sites such as Craigslist (Buffett didn’t actually names these companies), newspapers are seeing their ad base rapidly dwindle.
Buffett knows his newspapers. One of his first jobs was delivering newspapers in Omaha, and even helped deliver a Pulitzer Prize for a local Sun Newspapers of Omaha in the 1970s.
Buffett is also a longtime investor in the Washington Post, and Berkshire Hathaway owns the Buffalo News in New York. When he made the investments decades ago, newspapers had a wide “moat,” in Buffett parlance, meaning that they had little competition (other than rival papers). Newspapers long were “the only game in town” for getting out information, as well as ads, Buffett said. With the rise of the Internet, that is now no longer the case.
“It blows your mind how fast” the newspaper industry is losing ground, Buffett said. To be sure, he still owns the Buffalo News and he hasn’t dumped his Washington Post shares–yet.
Buffett also said he recently considered purchasing the Philadelphia Inquirer, which filed for bankruptcy protection last year.
Charlie Munger lamented the downfall of the newspaper industry. “It’s not good for the country,” he said. “We’re losing something” as local newspapers become more scarce.
The printed page isn’t dead yet but we are moving towards a future of more consolidation that will leave the country with a handful of major newspapers along with some regional papers in economically viable aress while large parts of the country will lose their paper altogether.
Can anyone say internet?
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About the author
Don Irvine is Chairman of Accuracy in Media. He is active on Facebook and Twitter. You can follow him @donirvine to read his latest thoughts.
4 Comments for Buffet: ‘Newspaper Math Is Tough’
No, Don … can you say CONTENT????? If you don’t have content, you don’t get readers. If you don’t get readers, advertisers stay away. If you don’t have advertisers, readers stay away. It’s all interconnected. But you have to start with CONTENT.
The free market capitalist system always rewards quality and these papers can’t figure out what people, their customers, want. IF I can figure it out…..and they can’t….what is the missing piece here…..maybe political sell out.
They should try traditional newspapers’ goal….a watchdog of the gov’t for the people. They will buy what they value. They are not buying the liberal minority’s bullshit and goal of overthrowing our wonderful “free” country.
What is so hard about this? Even tiny businesses of all kinds figure this out.
To F_D,James & ICF,,you are all right in your own ways,,but let’s look at it from a Pol.angle,OK?
If the LSM Papers & the far left papers fail,who is leftover?? Moderate & Right-wing papers,,thats
who!!! Do you think that the left & far left & Socialist Marxists like BHO will let that happen?
Didn’t the Left carry the ball for BHO since DAY 1??? They STILL say “The Annointed One” can do NO wrong. So,,in my opinion,,the Soros’ of the world will be called in to the rescue. Also,the Unions of the Papers will have to give up their power at the paper or lose all, so another Union like SEIU can move it & take over. Now the news will become
PROPAGANDA at those papers & stay that way,even if they got back on their financial feet.
“You Ain’t seen nothing yet” & the worst is yet to come. Honest papers will fold like the banks at the same rate of 2-3 per week UNLESS they get in LOCKSTEP with BHO & his Czars.
SO,,LET’S WAIT & SEE WHAT HAPPENS.
Primary Day,,,,then,,,,Election Day.
NOT RACIST,,,NOT VIOLENT,,,just NOT SILENT
I look forward to the NYT, LATimes, WaPo, and the KC Star going bankrupt along with all McClatchey news organizations. They are filled with liars and people of no integrity or character. Time they join the ranks of the unemployed and their owners experience monetary bankruptcy to go with their moral bankruptcy.