Author Topic: Warren Buffett Says All But 3 American Newspapers Are Doomed (Video)  (Read 622 times)

Mackin USA

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https://www.thewrap.com/warren-buffett-says-all-but-3-american-newspapers-are-doomed/

VIDEO

“It’s difficult to see how the print product survives over time,”
« Last Edit: May 07, 2018, 03:04:21 PM by Mackin USA »
Mr. Mackin

rcjordan

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I think he may be over-confident.

aaron

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If publishers have a direct subscription relationship with the reader they get less out of print distribution than they do online.

The marginal cost of distribution online is effectively zero, so they start from a position of higher margins.

In addition, online they can track what people read & are interested in, highlighting more related articles. They can also see when a person's usage has dropped and work on re-engagement campaigns where they promote articles they think that person would be interested in across the web, perhaps personalized to an audience of 1.

If they send out a print issue there's no tracking of user engagement & it is harder to cross sell events or sister publications & such in breaking news announcements (in addition to the paper being slower to publish new news).

rcjordan

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I preview well over 1000 article headlines on a typical day. From what I've seen, I think it would take a minimum of a dozen subscriptions to get even a half-decent overview of the news.

ergophobe

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minimum of a dozen subscriptions to get even a half-decent overview of the news.

I've been asking for it for years, and it's finally here... but came just as I decided to go into a news blackout for a while

http://www.readrapp.com/
https://us.readly.com/
https://anytimesub.com/

martinibuster

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The marginal cost of distribution online is effectively zero, so they start from a position of higher margins.

Let's talk about the cost of paying a living wage to reporters, support staff, secretaries, janitors, security guards, building rental, travel costs, etcetera...

The only people who start at a position of higher margins are parasites like Huffington Post who hire millenials to paraphrase the work of legitimate news organizations.

Quote
In addition, online they can track what people read & are interested in, highlighting more related articles.

That's a good observation. Yahoo News does things similar to that.

The problem with that approach, is that you run the risk of spiraling downwards to the lowest common denominator, like Google. Google aims to please so they show the most popular content. Which is why there is so much Kardashian and Taylor Swift bullshit in Google News than you might find on the NYTimes.

Gannett
You know that company that just bought WordStream? They're a news organization, the ones that own USA Today. They also own lots of local newspapers. They're news but they are also pivoting to be local search. And that's how the WordStream purchase fits into their business model. 

The reality today is that a purely news organization is going to have trouble existing. That's why companies like Gannett and the Hearst organization have transitioned to become local search companies.


« Last Edit: May 11, 2018, 05:25:58 AM by martinibuster »

aaron

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Let's talk about the cost of paying a living wage to reporters, support staff, secretaries, janitors, security guards, building rental, travel costs, etcetera...

The only people who start at a position of higher margins are parasites like Huffington Post who hire millenials to paraphrase the work of legitimate news organizations.
Crazy thing is I don't think HuffPo was particularly profitable. They were sold on the narrative of "growth" but then that growth sort of went away in part due to them shutting down their contributor network (perhaps in part for some combination of improved reach score on social channels, editorial overview cost savings, advertiser safety differentiation to lift CPMs above other race to the bottom channels).
http://adage.com/article/media/huffington-post-broke-146-million-revenue/299293/
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So if The Huffington Post -- which is 10-years-old, hauls in more than 200 million unique visitors a month and cranks out roughly 1,200 posts daily on the backs of reportedly poorly paid or unpaid writers -- can't turn a profit on $146 million in revenue, then how are the other, venture-capital fueled sites with smaller audiences and fewer relationships with advertisers supposed to achieve profitability?
https://www.nytimes.com/2015/07/05/magazine/arianna-huffingtons-improbable-insatiable-content-machine.html
Quote
The Huffington Post broke even last year on $146 million in revenue, according to someone familiar with the site’s finances — is considered a temporary problem that will eventually be fixed by the sheer size of the readership.
https://www.vanityfair.com/news/2016/09/why-arianna-huffington-left-the-huffington-post
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in a few short years, the site was experiencing a Digital Age version of a midlife crisis. It was reaching 26 million unique visitors per month, an astonishing number, but in the Internet business, sites either grow or shrink. And to grow, the Huffington Post needed more money.
...
the very year Huffington cut the deal with Armstrong, 2011, turned out to be the publication’s only substantially profitable year.


Ultimately so long as the market has attention dominated by a few platform monopolies which keep growing more dominant by the day, copy external innovations into their core products (Snap as Facebook Labs), buy services to track growth of competitors (like Facebook buying a VPN), etc. ... there will always be a few interns willing to eat on credit from their parents & illustrious opportunity points. And there'll be a few VC-funded media innovation plays that sell "a new way" & growth story to old school outfits.

But for those who long for something more than that, I think a shift to subscriptions will be needed for publications which aim to be much larger than an individual or small team who covers a specific niche or vertical.

And I think reformatting across proprietary formats (Instant Articles, AMP, having Medium as the CMS) is going to be a mistake for most publishers who want to sell subscription access.
http://www.niemanlab.org/2018/05/medium-abruptly-cancels-the-membership-programs-of-its-21-remaining-publisher-partners/
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After each strategy shift at Medium, partner publishers have said they felt the rug being pulled out from under their feet, with no notice. In the spring of 2016, Medium rolled out a suite of tools for publishers and attracted big names like Bill Simmons’ The Ringer and California magazine Pacific Standard, along with beloved indie outlets like The Awl Network, Film School Rejects, and Femsplain. All of these publishers have migrated off Medium (most depressingly, The Awl and Hairpin aren’t around anymore at all).

That's a good observation. Yahoo News does things similar to that.

The problem with that approach, is that you run the risk of spiraling downwards to the lowest common denominator, like Google. Google aims to please so they show the most popular content. Which is why there is so much Kardashian and Taylor Swift bullshit in Google News than you might find on the NYTimes.
It is quite easy to compare the click score for the individual vs the click score for the general population to prevent the race-to-the-bottom rewrites of the latest Kardashian news. Stories could also be topically scored not only by section but through tagging, the section they are in & through semantic analysis.

And if one is selling a subscription there is greater alignment with not going through a race to the bottom, so maybe those articles are not only not promoted algorithmically but perhaps they are not published in the first place.

I think the harder problem (particularly with open networks) is not over-personalizing the way YouTube does, where one starts with a video a little bit out there & a few autoplays later is deep in crazy conspiracy land. But, again, that problem goes away with a paid subscription business model driving access to editorially approved content.

Of course there are different points of leverage for aggregators vs individual publishers. Wherever there are ad-funded publishers in a competitive channel there will be incentive to game the system. And even subscription services have an incentive to game the system if things are split between a central network and individual authors. There were stories about spam auto-gen Kindle publishers that would have people open page 2,792 or such on the book to get a large share of reader subscription revenues.

ergophobe

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The marginal cost of distribution online is effectively zero, so they start from a position of higher margins.

Let's talk about the cost of paying a living wage to reporters, support staff, secretaries, janitors, security guards, building rental, travel costs, etcetera...

Absolutely. That said....

I don't know magazine publishing, but my book publisher once gave me the breakdown on cost of paper, binding and so forth and it is not an inconsiderable part of the total cost. So all things being equal (journalist pay, secretary pay), you should be able to scale to large numbers much cheaper online because the marginal cost of an additional reader is low.

The ad ecosystem is quite different, but the ad costs for print are likely unsustainably overpriced, so that difference will likely disappear over time, then the cost of actually putting those words on dead trees and shipping them around the world in physical format becomes an insurmountable liability.

I have taken to buying more subscriptions or just donating to some publications, but as RC says, it is really hard to get a decent range of publications. I think large subscriptions aggregators like I mentioned above are a way forward that might shoot the middle between awful, LCD clickbait and subscribing to dozens of publications that you don't have the time to read.

ergophobe

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I think large subscriptions aggregators like I mentioned above are a way forward that might shoot the middle

But when I look at them, they are light on magazines that are heavy. For example, none that I have looked at have The Economist.

Brad

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>>subscriptions aggregators

I was looking at these a few weeks ago after Apple made some announcement they were getting into this that sounded like Apple invented it.  I was surprised to find they already exist.

These sound like a great idea for somebody with hobbies: fishing, hunting, camping, golf, gardening, where you can read 5 - 10 topical magazines regularly for X dollars a month.

I wouldn't mind seeing something like this for newspapers: one payment gateway gives you access to however many newspapers sites of your choice for a monthly fee, rather than have my credit card details and logins spread out on 5 or 6 different servers. 

ergophobe

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Re: Warren Buffett Says All But 3 American Newspapers Are Doomed (Video)
« Reply #10 on: May 14, 2018, 03:05:44 PM »
great idea for somebody with hobbies

Exactly. I have been checking these on and off over the past year or so. Though the number of magazines keeps growing, the number of news sources is growing at a much, much slower pace.

According to a somewhat older analysis, Huff Post makes about $0.06/pageview. I would gladly pay triple that if there was a single newspaper clearinghouse where I could charge up my account with $50 and pay, say, $0.025/pageview, $0.005 to the broker and $0.02 to the publisher. Publishers would make more and I would, I hope, get an ad-free experience and, perhaps more importantly, would support those news outlets that I want to support. But I would not have to have 26 subscriptions, which just isn't going to happen.