Monday, June 9, 2008

More Bad News for Newspapers, Part II

I wrote today's first post over the weekend, before seeing today reading today's New York Times article by Richard Perez-Pena, "Uncertainty as Tribune Prepares to Retrench."

Here are some additional points that Perez-Pena made:
  • Watering down the product can hurt staff morale.
  • "'To the extent you diminish your product, I think you diminish your success in print or online. In the long run, it's going to be harmful to newspapers' brand names, which is the strongest thing they've got,'" John Morton, an independent newspaper analyst. "Offering readers less, trying to cut costs and preserve unrealistic profit margins. 'It’s a strategy, basically, of gradually closing down,'" Morton added.
  • Although not addressed in last week's analyst call, Sam Zell has said that he thinks too many resources have been allocated to international and national news -- information available from other resources on the Internet -- and that local news is what's most important to readers of local newspapers.
    • The implications include smaller national and international sections -- and heavier reliance on wire service copy.
  • "But a newspaper dominated by wire articles would offer little that was original — and little temptation to a reader who could just as easily go to Google or Yahoo for news."
What's the biggest problem facing newspapers? Cost structure and circulation are issues, but not the real problem. According to Mike Simonton, senior director at Fitch Ratings in Chicago, quoted in the article, "The biggest problem still is the loss of ad sales...I think there’s very little evidence that any of these strategies and changes will change that.”

Again, the point I've made before in this blog, as much I respect journalism, its survival mostly rests on being an effective mechanism to distribute advertising -- not on circulation or journalism awards. (The same is true for broadcast TV, which has been more successful in experimenting with new means to distribute advertising via product placements, even as viewership has declined.)

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