John Morton Nails It Like A Thing That Has Been Nailed

Dear Jesus yes:

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.

Via Romenesko.

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.


7 thoughts on “John Morton Nails It Like A Thing That Has Been Nailed

  1. Athenae – I just found a very cool publishing blog called Tools of Change for Publishing on the O’Reilly (tech publisher) website. It’s got a lot of great content and links. I think tech publishers are way ahead of newspapers and book publishers when it comes to figuring out how to get paid for producing content regardless of the package (online or on paper, in a book or on a CD, as a PDF, etc.).

  2. KALW did a GREAT interview with David Cay Johnson the brilliant financial writer.
    He said that the Newspaper publishers are the only business that he knows of that offers people less and asks them to pay more.
    He is leaving the New York Times at the end of the year. Wall Street won’t ever satisfied.
    Washington Times loses 20-30 million a year. Now There is a Business model!

  3. I’m an engineer, not an economist or anything but as quick point.
    One thing about margin is that it is very sector specific. I worked in Semi-conductor capital equipment (they make the stuff, that makes the stuff that makes your cel phone) and in that sector if you had less than 50% margin it was considered inefficient. Course, we only sold several hundreds of our widgets a year versus millions.
    I have never been able to wrap my head around how all this year-over-year growth and margin as compared to sector really means anything? Stock peddlers us it as a gauge and it then drives short term, and yet supposedly continuous, rises in stock price. And while people buying your stock means your company may have access to cash (I’m guessing) I don’t see how it directly related to how healthy your business really is..
    If a company were to go private and have 10% margins with good sales couldn’t it go on operating basically for ever? What am I missing … other than senior management chasing after the next Lexus/Jag/vacation home?

  4. And in the meantime, The Capital Times here in Madison will be going Internet-only in a couple weeks, leaving Wisconsin’s capital city without any newspaper other than The Onion and The Daily Cardinal…

  5. Give people good local news and relevant stories.
    Give people thoughtful editorials and funny comics.
    Give people reasonably-priced classified and display ads in legible typefaces.
    This will create a profitable newspaper.
    Don’t skimp on the writing, editing, proofreading.
    If you make a mistake admit it and correct it.
    Keep the editorializing out of the news section; likewise the ads.
    In other words, you don’t need a ‘new’ business ‘model’. You need to run a good paper.

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