Are Newspapers Worthless?

by Mike on January 7, 2010

Daytona Beach News Journal to Sell for Asset Value

Our local newpaper will sell for about $20 million. The value of its assets. Ironically, this news was published in the News Journal this morning. The article is here –> News-Journal sale in judge’s hands.

What I find most interesting in this is a statement by Rick Edmonds, media business analyst for the nonprofit Poynter Institute in St. Petersburg:

“The going rate for newspapers has been something roughly comparable to the value of the hard assets — the building and the presses. In San Diego, particularly, there was widespread speculation the buyer was primarily interested in the newspaper’s real estate.”

When a business is worth the value of its hard assets, that means that the business itself is worthless.

Are Newspapers Worthless?

In the same article it was stated that advertising revenues at the New Journal are down 50% over the past five years. Now part of the decline is because of the recession, but there are other long-term trends that forecast death to the current newspaper business model:

  • Free classified advertising sites like craigslist.com
  • Young people read newspapers at a rate that’s half of those over 30 and a third of those of 50. (Averaged from numerous sources including Nielsen and the NY Times)
  • Young people, when they read the newspaper, do not read at the same level of depth of their elders
  • News delivery over the internet is more popular than ever
  • More organizations self-publishing on the internet
  • Facebook, MySpace, Twitter – a simple “Hey, did you hear about this,” can result in many responses. The massacre in Mumbai was reported by Twitter users.
  • Search and Google – search queries by real buyers about what they want to buy

I’m not saying that news is dead. I’m saying that the traditional advertising supported newspaper system is in its death march. Newspapers are local and were a great source for advertising locally. At one point, not long ago, they were one of  the only daily sources. Not any more.

My behavior is typical of many people. When I want to buy something locally, I will usually start to search for the product I want to buy. Let’s say I need a business portrait for my marketing material and I search for – business portrait photographer ormond beach. What comes up number one in Google:

d-christopher

Instant feedback. If I want to find out more, I can do more searching, but I’m likely to click through, check out the site and call if it looks good.

D Christoper’s Studio is available by search 365 days a year, 24 hours a day. What would it cost to advertise locally in any newspaper for that exposure. Better, it’s exposure to people who want photography in Ormond Beach.

The newspapers cannot compete with other media for local advertising dollars as they once did. In our real estate business, we have stopped classified advertising in the News Journal. The cost is not worth the benefit. Our money is better spent where our clients search – on the internet.

How can the newspaper adapt?

  • Better – It’s almost comical, but newspapers must offer better content than what’s available through other channels. What’s comical is that it must be better than bloggers, Facebook, and other Internet only based services.
  • Free – The content must be available for free on the Internet. Whether print media survives is not critical. They must become high authority, high content, exclusive content news sources.
  • They need to observe Amazon.com and Google and take the best features from their content specific advertising delivery. For instance, on a business page about top selling automobiles, they would serve advertising from those manufacturers mentioned in the story. An article on home repair would include local home repair services.
  • They need to leverage their current authority with the search engine before it is gone. Type Daytona Beach xxxx News into a Google search and the News Journal will come up first almost every time. But, when I go to their sports page, the advertisements are from Blockbuster, a mortgage company, and Amazon (not sports related). This is a sports page, why isn’t this page sponsored by a local sporting goods store? At this point, they have not made the offer compelling enough.

What’s The Future of Newspapers?

I posit that there is no long-term future for newspapers. There is an unlimited future for news and there is a huge market for excellent, targeted, relevant news content. Their assets will then be shifted from hard assets like buildings and presses, to more valuable assets like efficient and effective advertising delivery.

Ah, will newspapers be missed?

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