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Warren Buffett on newspapers [pdf]

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Re: Warren Buffett on newspapers [pdf]

#31

Post by adestefan »

lrs wrote: post #21
adestefan wrote: post #16

Earlier quoted context omitted.

Most local news is trashy gossip.

Not sure why you're getting downvoted here. Isn't this the same effect Buffett is talking about in the letter when he describes the local paper's advantage in coverage of "local sports?" People will pay to read about their kid's soccer goal; people will pay to peruse the list of people who got picked up for DUIs last week and look for anyone they know. Am I misunderstanding Buffett's position here?

That was my point. Everyday the first page my mother reads in her local paper are the obituaries. Next stop is the community pages to see who filed for marriage certificates and divorces, followed by the high school sports and maybe the front news section if she has time.

I get phone calls from her because so and so that was in my high school class had a baby or was picked up by the cops. It's never to discus the latest city council meeting.

Re: Warren Buffett on newspapers [pdf]

#32

Post by brandnewlow »

makomk wrote: post #29
brandnewlow wrote: post #20

Earlier quoted context omitted.

Just want to point out how insane is is that none of us would price even the most basic SaaS product at less than $30/month, but people balk at paying $18/month to have a professionally edited newspaper printed and DELIVERED TO THEIR DOOR. Newspapers are so hosed.

SaaS products have support costs. Newspapers are media - they're produced, replicated a bunch of times, then consumed.

Ever received a letter to the editor? Legal threat from a story you published? Had someone get fired over a piece you wrote and had to deal with the guy's family having to sell their house. These are extreme examples, but newspapers have support costs, too.

Re: Warren Buffett on newspapers [pdf]

#34

Post by chc »

vailripper wrote: post #25
corry wrote: post #4

Interesting strategy. Focus on the only advantage local papers have -- the deep local connection -- and build the strategy around that. Might be a leaner newspaper with a smaller readership... but that will happen anyways. Coupling this 'deep local' focus with a better social media strategy could help them survive. If you become THE source for all local news + provide an easy way for things to be shared / discussed v…

The question I have is - with low readership numbers how do you support a news room that can provide in depth local coverage?

By focusing your reporters just on the more in-depth stuff and running rewritten press releases for everything else, essentially.

Re: Warren Buffett on newspapers [pdf]

#35

Post by adestefan »

greedo wrote: post #30
digitalengineer wrote: post #9

Earlier quoted context omitted.

I think he feels newspapers should return to their original function of writing their own (local) news and doing their own investigations. NOT 'copy/paste' all the Reuters-news. We've got the web for that kind of news.

The problem is that the cost of generating and distributing that local news is not sustainable in the face of internet technologies. Witness this: I'm at a graduation celebration in Wisconsin this weekend, and all the parents attending throughout the day are very involved in student athletics. One of the kids was running in a track competition out of town with the rest of the school. The results were texted immediate…

You were witnessing the people who are directly connected to the event, either through a member of the team or through the school. What about the other 500, 5,000, or 20,000 people in the town that didn't care enough to have instant notification, but still want the information even if it's a day later? That's where you make money.

Re: Warren Buffett on newspapers [pdf]

#36

Post by horsehead »

brandnewlow wrote: post #32
makomk wrote: post #29

Earlier quoted context omitted.

SaaS products have support costs. Newspapers are media - they're produced, replicated a bunch of times, then consumed.

Ever received a letter to the editor? Legal threat from a story you published? Had someone get fired over a piece you wrote and had to deal with the guy's family having to sell their house. These are extreme examples, but newspapers have support costs, too.

As a reporter! These are all VERY real considerations, and very very VERY common. i wrote stories that contributed to a few local elected officials getting the boot. I've had people threaten legal action on my stories too. There are lots of things most people never see/think about concerning journalism. (edit: while there are some reporters who are assholes and who relish getting people fired, most decent ones agonize over whether they are reporting accurately and fairly. Such was the case with Woodward and Bernstein).

Also, the local news thing Buffett talks about is so true. Why would you run national news in a local paper people are buying when folks can get it free from CNN ? or a blog?

I think there's a healthy mix that hasn't really been found yet. The NYT has a decent model of 10 articles a month that seems to have been working well so far. I also really like the thing that that foreign company "Piano" is doing (I had a very similar idea. It's like cable subscriptions but for newspapers).

I'm not ready to say newspapers are dead yet, but they're mighty close, especially if they don't come up with a new business model. =\

Re: Warren Buffett on newspapers [pdf]

#37

Post by horsehead »

watsix wrote: post #26
jasonlotito wrote: post #22

Earlier quoted context omitted.

You consider the cost of printing and delivery to be much higher than it really is. You also ignore the elements of the newspaper that used to off-set various costs for you that are disappearing. In essence, you were never paying for the news, and so unfortunately, you don't have a firm grasp of the true cost.

In essence, you were never paying for the news, and so unfortunately, you don't have a firm grasp of the true cost. This is such a critical thing to understand. No one understands the true cost, because no one has ever paid for the news, it's always been advertisers. And now, for whatever reasons, advertisers don't want to pay for the digital equivalent, and they don't seem to be coming around. This correlates to bra…

I know i'm not really adding anything to this discussion by posting this, but I just want to say this thread here is an excellent analysis. If I could sum up the plight of newspapers in a few paragraphs, i would pick this and its few parent comments.

Re: Warren Buffett on newspapers [pdf]

#38

Post by CamperBob2 »

watsix wrote: post #26
jasonlotito wrote: post #22

Earlier quoted context omitted.

You consider the cost of printing and delivery to be much higher than it really is. You also ignore the elements of the newspaper that used to off-set various costs for you that are disappearing. In essence, you were never paying for the news, and so unfortunately, you don't have a firm grasp of the true cost.

In essence, you were never paying for the news, and so unfortunately, you don't have a firm grasp of the true cost. This is such a critical thing to understand. No one understands the true cost, because no one has ever paid for the news, it's always been advertisers. And now, for whatever reasons, advertisers don't want to pay for the digital equivalent, and they don't seem to be coming around. This correlates to bra…

This correlates to brandnewlow's comment above as well. It would be fascinating to see a news source that was paid for entirely by customers and thus not beholden to advertisers--something like HBO. But it would very hard to sell such a thing, because $15-$30/month for news, historically speaking, seems insanely high.

Sounds basically like what Stratfor was trying to do. I don't know what they charged, or if the value was there, though.

Re: Warren Buffett on newspapers [pdf]

#39

Post by greedo »

adestefan wrote: post #35
greedo wrote: post #30

Earlier quoted context omitted.

The problem is that the cost of generating and distributing that local news is not sustainable in the face of internet technologies. Witness this: I'm at a graduation celebration in Wisconsin this weekend, and all the parents attending throughout the day are very involved in student athletics. One of the kids was running in a track competition out of town with the rest of the school. The results were texted immediate…

You were witnessing the people who are directly connected to the event, either through a member of the team or through the school. What about the other 500, 5,000, or 20,000 people in the town that didn't care enough to have instant notification, but still want the information even if it's a day later? That's where you make money.

Are they willing to pay? It appears (based on subscription numbers) that the number of people willing to pay are decreasing.

A lot of the people I work with rely upon FB to serve as their "news." And I in turn use HN as a kind of news service. I rely upon FB, HN, twitter, and RSS for the majority of my news intake. The problem will arise when all that's left are either blog posts that have variable reliability and wire services that have variable depth.

Re: Warren Buffett on newspapers [pdf]

#40

Post by MiguelHudnandez »

eli wrote: post #23
nodata wrote: post #17

Earlier quoted context omitted.

How could you possibly believe all of the efficiency gains from having a digital supply-chain wouldn't lead to a cheaper product?

Those gains are MORE than cancelled out by the miserable rates they are charging for digital ads versus print. Thank about it: even if you read every page of the paper online every day for a month you wouldn't generate anywhere near $18 in revenue. Heck, you probably wouldn't generate that if you clicked on every ad. It used to be that the cost of the paper roughly covered just the printing and distribution. All the…

So here's a theory. An old adage used to be "I know half my advertising dollars are wasted, but I don't know which half!"

Now that you can get analytics on ad views and interactions, we do know that the interaction rates on ads in publications are terrible. Therefore, they command lower rates.

Is this a case where technology is "cleaning up" an ineffective use of marketing dollars?

Another change for advertisers is that they can get superior targeting online. Why broadcast to everyone when you can target your niche directly?

On a side note, I hate marketing. I want to either be the customer or the product, but never both. That said, I might pay extra for newspapers or media with no ads, only reporting. I want investigative journalists essentially on my payroll. Which is basically public broadcasting (NPR or PBS in the US), but I wouldn't be opposed to a completely private alternative. The issue there is that I'd want to pay an established name, an upstart would have to convince me that they'll provide excellent work.

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