Aug 27, 2010 10:04 AM PDT
What do the following U.S. metropolitan daily newspapers have in common: The Seattle Post-Intelligencer, Rocky Mountain News, Baltimore Examiner, Kentucky Post, Cincinnati Post, King County Journal, Union City Register-Tribune, Capital Times Halifax Daily News, Albuquerque Tribune, South Idaho Press and San Juan Star?
They've all ceased print publication since March 2007.
This morning, The New York Times Co. (NYSE: NYT) reported a quarterly loss because of a 27% drop in advertising revenue and poor performance at The Boston Globe, which might close this year. The Times bought the Globe for $1.1 billion in 1993. The paper could lose $85 million this year.
At mid-day, The New York Times Co. had fallen 17%, one of the NYSE's biggest losers. It's trading around a dismal $4.83.
The challenges facing newspapers are wide spread. McClatchy (NYSE: MNI) reported cutting 1,600 jobs early this month as $2 billion in debt smothers the company. Gannett (NYSE: GAN) and Hearst are also attempting to sell assets and cut jobs to cope with the evaporation of the ad business. Some, like Tribune Co., have already declared bankruptcy.
It's sad, really. My husband and I began our careers working at newspapers. We experienced first-hand their role as watchdogs. We've watched Pulitzer Prize-winning newspapers shrink in size, quality and integrity.
Like many newspapers, they may one day exist solely online and rely on video, shallower content and snippets of news instead of in-depth stories.
The 2009 State of the News Media Report paints a dismal picture: Newspaper ad revenues have fallen 23 percent in the last two years. Nearly one out of every five journalists working for newspapers in 2001 is gone, and 2009 may be the worst year yet. The number of Americans who regularly go online for news, by one survey, jumped 19 percent in the last two years; in 2008 alone, traffic to the top 50 news sites rose 27 percent. Executives estimate that the recession at least doubled the revenue losses in the news industry in 2008.
Toss the increase in Internet content and diversity into the equation, and I know where I'd be investing my money. Even at rock bottom prices, I would steer entirely clear of any stocks related to newspapers. They're dinosaurs looking to survive another meteor storm and none have the power to prevent extinction.
Yesterday's newspaper readers are today's online video fans. Check this out: The 1.5 million hours of video contributed to YouTube in the first six months of 2008 was greater than all the programming produced by the Big Three broadcast networks since their inception 60 years ago, according to a study by Michael Wesch, a professor at Kansas State University.
Another product helping to put the final nail in the coffin of newspapers is Amazon's (NYSE: AMZN) state-of-the-art gadget, Kindle 2. With it, you can basically download any book and most newspapers in a matter of seconds.
More trouble for newspapers is on its way via Apple (NYSE: AAPL). Steve Jobs is reportedly seeking to produce a netbook with a 10-inch touchtone screen that will "fill the newspaper void."
It's an old story, but once again, technology steals the headlines.
