Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: abb

HA ha...
11 posted on 12/07/2005 4:29:11 PM PST by Chode (American Hedonist ©®)
[ Post Reply | Private Reply | To 1 | View Replies ]


To: Chode

http://money.cnn.com/2005/12/06/news/fortune500/pluggedin_fortune/index.htm

Investors unsubscribing to old media
Newspaper execs protest that they 'get it.' But the numbers show a business in decline.
December 6, 2005: 6:23 PM EST
By Adam Lashinsky, FORTUNE senior writer

Discounted Advertising in U.S Newspapers
Place your classified or display ad in hundreds or thousands of newspapers at...
www.usnewspapers.com

NEW YORK (FORTUNE) - Expect a somber mood Wednesday at the UBS Global Media Conference in New York City: It is newspaper day.

At a confab sprinkled with presentations from executives at cable networks (like Time Warner Cable), advertising agencies (example: Universal McCann), satellite concerns (BSkyB and XM Satellite Radio) and technology hardware providers that make all this media possible (Motorola, for one), Wednesday will be dominated by the biggest newspaper companies in the land.

The chief executives of Tribune, Dow Jones, Gannett, Washington Post, New York Times and McClatchy each will gamely shuffle up to the podium at the Grand Hyatt Hotel and tell investors why newspapers aren't dying. They'll explain how they are embracing the Internet and why the speedy growth in online advertising makes their companies good investments. They'll shout to the rafters that they "get it."

So far, investors aren't buying what they're selling. Share prices of the six aforementioned companies are down an average of 24 percent (not including dividends) this year. Looking at the numbers, it's a wonder the stocks were as high as they were at the end of last year. The story wasn't much better then. (On an up day for the market Tuesday, all these companies except the Washington Post was down.)

Investors, of course, simply are following readers out the door. According to the Newspaper Association of America, daily circulation of U.S. newspapers peaked in 1984 at 63.3 million. Last year, U.S. newspapers sold just 54.6 million copies per day. It's the industry that was in decline before the arrival of the Internet, which has only made things worse.

What must be frustrating for newspapers is that their advertising revenue boomed during the first Internet craze, when technology image advertising and employment classifieds were all the rage. The Internet is booming again, but incremental ad buys are going online, not into dead-tree editions.

The newspaper rallying cry is how online advertising will save them. And there are encouraging signs. E.W. Scripps, whose shares are down only a bit on the year, bought comparison-shopping site Shopzilla. It forecasts that Shopzilla will generate more than $50 million in profits in 2006, or nearly 15 percent of the company's total. The Washington Post company has demonstrated that it understands the power of user-generated content by giving prominent placement to reader comments on its blogs. (A penetrating article from tech-savvy blog Slashdot illuminates this point.)

Nearly every other publisher has made major online purchases to bolster their share of Web advertising. The Dow Jones purchase of Marketwatch and the New York Times acquisition of About.com are two good examples.

But for every example of a newspaper company that's trying to come up with a new Internet application, there's another example of newspapers that continue to charge top dollar for classified listings, even when Craigslist offers an online equivalent for absolutely nothing. (It's tough to compete against a company that doesn't try very hard to make money.)

Yes, Internet advertising is growing, but is it growing fast enough to replace the giant revenues these massive newspaper companies are losing?

Sadly, it's not.


12 posted on 12/07/2005 4:33:23 PM PST by abb (Because News Reporting is too important to be left to the Journalists.)
[ Post Reply | Private Reply | To 11 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson