Tuesday, July 5, 2022

Doom and Gloom in the Newspaper Business — Not Really!

Myth: the publishing industry is on its knees and newspapers, more than any other printed product, will soon disappear. I certainly hope not. And, you are currently reading this on the Internet!

For the past five years, I have heard this over and over from various publishing circles here in the state as well as from the newspaper industry meetings I attend around the country. Doom and gloom with the sky not getting ready to fall down, but having already collapsed.

While the big-city newspapers in the U.S. have taken a massive hit from the Internet losing classified, real estate, and car advertising dollars to the World Wide Web, newspapers are still making nice profits. True enough, newspapers are not printing money like they once did. However, most papers are still healthy, netting around 20 percent on their gross earnings. In America, 20 percent is an impressive return in any business.

Some sunshine came to the industry a few months ago when one of America’s most noted investors, Warren Buffett, purchased 63 newspapers. Buffett paid $142 million for these papers.

Many in the industry saw this as a signal that the worst was over, that a smart investor with a significant track record would not make an investment like this unless he fully believed in the stability and potential of that industry. In fact, Buffett continued his buying spree –– purchasing two more newspapers in Texas.

Buffett’s strategy is revealing: the larger big-city newspapers are the ones that have been hurt by the Internet and the ones that will soon be reducing their publishing frequency because these newspapers are out of touch with their readers and extremely top-heavy with expenses. Not so for the smaller community newspapers that carry almost zero national news ––  wisely focusing on local news – and these are the 63 newspapers Buffett purchased: small-town community newspapers.

According to a 2011 survey by the National Newspaper Association, readers in areas served by community newspapers preferred the community newspaper as their source of local news and advertising. The study also revealed that people would rather read a printed copy to the online version and only about a quarter of respondents said they had found local news through a mobile device in the past 30 days.

The study underscores that readers still believe newspapers and the printed word product provides a better job in delivering news and content than what they find on the Internet.

Just five years ago, Buffett said most newspapers faced “nearly unending losses.” For the past several years, like so many, Buffett has been sitting on the sidelines waiting to see how the Internet would effect the newspaper industry. Judging from his buying spree, he changed his mind and determined the damage delivered to the newspaper industry by the Internet had reached the bottom and it wasn’t as bad as the talking heads had predicted it would be five years ago. So, Buffett started buying.

No doubt that from now on, we’ll all obtain part of our news from the Internet and related devices, as you are reading this column on a blog. However, my bet is that we are also going to still be receiving a significant portion of our news from printed products.

The parent company of our Delta Business Journal, Coopwood Publishing Group, publishes a Sunday morning newspaper in Cleveland called, The Cleveland Current. We started our weekly newspaper in March of 2009 during the official down-turn in the newspaper industry.

When starting our paper, we didn’t pay any attention to the headlines around the country about the decline in the newspaper industry. We believed a well-written newspaper, delivered in an exciting format, would work and was needed in our town. Our newspaper has grown each year and as believers of printed products, we were delighted to see the confidence Mr. Buffett displayed last month in community newspapers.

Long live the printed word and product! And, maybe a little digital thrown in for fun!

Scott Coopwood, a seventh generation Deltan, lives in Cleveland, Mississippi, with his wife Cindy and their three children. Scott is the publisher and owner of Delta Magazine, one of the South’s leading lifestyle publications (deltamagazine.com); the Delta Business Journal, (deltabusinessjournal.com) the first business publication in the Mississippi Delta; and Cleveland’s weekly newspaper, The Cleveland Current (theclevelandcurrent.com). Scott’s company also publishes two weekly e-newsletters. Coopwood publishing concerns now reach 250,000 people. Scott is also a 1984 graduate of the University of Mississippi. He can be reached at scott@coopwood.net.

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