In an interview with Politico Editor-in-Chief John Harris, billionaire investor and newspaper owner Warren Buffett said that newspapers are no longer the primary source of news for the public, and that the long-term trend for the industry is downward.
“Journalism is everything. Portions of journalism have declined in importance, and it’ll continue to. It’s too bad. Newspapers were primary 30 or 40 years ago in stock market prices or baseball scores, where you could find a house, where you could find a job — all of those areas, they’re no longer primary in,” Buffett said. “They’re just less important to people than they were before, but news is still important to people, and they’re getting it one way or another.”
The decline of newspapers can be traced to the late 1990s, when the Internet started to take off. Though they managed to continue to generate healthy profits for many more years, the combination of a brutal recession that sapped advertising dollars and the rise of smartphones sealed their fate.
Now, instead of reading a printed newspaper, most people—especially millennials—turn to their smartphones and tablets to read the news. They may be reading USA Today or The New York Times, but they aren’t paying for the privilege. They tend to skip the ads on the newspapers’ websites or apps, thus they generate little to no revenue for the paper, exacerbating their decline.
Even though Buffett owns some 70 newspapers, most of them are in small towns, where he believes that despite the headwinds that are buffeting the entire industry, these papers will outlast their bigger brethren because they still are important to their communities.
“The trends of all newspapers is going to be down and smaller newspapers will decline at less of a rate than big metropolitan newspapers because they’re more important to their communities. It’s harder to edit a newspaper for Los Angeles, it’s easy to edit a newspaper for Grand Island, Neb.,” Buffett said. “We will be of primary interest to readers, or a significant percentage of the population, for a longer period in a smaller town than a metropolitan area. That’s being proven by the figures, but the circulation of all newspapers is going down.”
Still, it looks like even Buffett understands that the newspaper industry as we have known it is coming to and end. It’s only a question of when, not if.