Newspapers are saved! Well, not quite…

Have you heard the great news?  Several big-time newspaper publishers are reporting nice profits for the most recent fiscal qaurter.  Halleluha!  The news business is saved, all of our jobs are safe forever and ever.  Well, maybe not.

I am constantly amazed at the lack of genuine understanding of even the most basic business aspects of the industry in the press.  When large companies make cuts as deeply as these guys have, of course they’re going to show a short-term profit.  And if their revenue was even remotely stable, I might be inclined to jump on the optimism bandwagon.  But it’s not.  By all reports, ad revenue continues to tumble by ridiculous margins, and even the most blinded true-believer doesn’t think it will ever rebound all the way.

This isn’t the first time I’ve seen cutbacks in a slow market produce short term bottom line help.  The dirty little secret behind these moves, however, is that you won’t really see the damage done from the cuts for a while, and when you do, that damage is typically deeper and more long-lasting than the immediate benefits were.  In other words, all these corporate giants have done is exchange turning a short term profit now for crippling the long-term possibilities for sustainable revenue.

But what else is new?  This has been S.O.P. for the industry for quite some time now.  Cut, cut, cut everything that doesn’t involve an executive paycheck or bonus, reap the rewards in better-looking (the proper emphasis on “looking”) budget sheets for a few months, then blame the eventual drop off on a poor economy, lazy salespeople, a solar eclipse, anything but your own short-sighted decisions, then cut, cut, cut all over again.

The only problem is that now there isn’t anything left to cut.  And the great future for publishing is all about paywalls and gutting copyright law.  Wow.  I feel so much better.  Congrats on the profits, guys.  Hope they’re worth it.

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Published in: on August 1, 2009 at 3:55 pm  Leave a Comment  
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