Warren Buffett Is Bearish On Newspapers

In recent years, it seemed like Warren Buffett was the only cheerleader left for the newspaper industry among big investors. Even better, he was willing to put his money where his mouth was. He bought a few dozen local papers, based on his belief that their community connections would help them weather the tough digital transition.

But now, it looks like even the Oracle of Omaha is having his doubts.

In an interview with CNBC last week, Buffett held out hope for a few big national newspapers that have the reach and resources to manage the long-term transition to digital distribution. But he warned that the future is in jeopardy for the vast majority of local, regional and metro daily newspapers.

“There are only two papers in the United States that I think have an assured future because they have a successful Internet model to go with their print model, and that’s The Wall Street Journal and The New York Times,” which have both developed “an online presence that people will pay for,” according to Buffett.

He added that The Washington Post, with the resources of Amazon founder Jeff Bezos behind it, may also clear the digital hurdle.

However, Buffett then painted a dire picture for the rest of the business, noting: “There are 1,300 daily papers left in the United States,” down from “1,700 or 1,800 not that many years ago.” These publications, serving mostly small and mid-sized communities, “haven’t figured out a way to make the digital model complement the print model in such a way as to guarantee the future.”

The trend lines are clear, he added: “Circulation is going down significantly.” On the advertising front, “it used to be dozens and dozens of pages of help wanted ads [but] it’s basically disappeared, and no one has found the answer to that yet.”
more at:  http://www.mediapost.com/publications/article/296475/warren-buffett-is-bearish-on-newspapers.html

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