Newspaper executives point to the Internet as the future of newspapers, arguing that a combination of online and print products will assure newspapers of a profitable future. Yet last year newspaper Internet revenue amounted to only 7 percent or so of total advertising. Moreover, growth in Internet revenue, which in earlier years had been 30 to 40 percent a year, has dropped to about 20 percent.
What this portends is that a successful Internet-print future will be a long time coming. And if newspapers embark on this future with lesser journalistic products, less circulation, less standing in their markets, the profits of the future likely will be much less than newspapers are accustomed to.
I will point out that despite weak advertising and all the other woes newspapers endured last year, the average operating profit margin of the publicly owned companies’ newspaper operations was 17 percent. Most non-media businesses couldn’t hope to achieve even half that in the best of times.
You want to keep talking about the Internet, fine, but the money’s going out the door, and until you start asking why and wherefore, you’re going to keep losing.