Omaha, NE – Warren Buffett is fond of newspapers — he reads five a day — but the billionaire investor warned shareholders of his Berkshire Hathaway Inc that the reeling industry may never recover because it lacks a sustainable business model.
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At Saturday’s annual meeting of Berkshire, which owns the Buffalo News and has a big stake in Washington Post Co, Buffett said that as readership falls, so does the attraction of newspapers for advertisers, and for investors in the companies that publish them.
“For most newspapers in the United States, we would not buy them at any price,” Buffett said. “They have the possibility of nearly unending losses. … I do not see anything on the horizon that sees that erosion coming to an end.”
Many U.S. newspapers have lost 20 percent or more of their advertising revenue as changes in technology and reading habits shrink circulation and more readers to get their news online.
Several newspapers in large U.S. cities have closed in recent months, and the future of the money-losing Boston Globe, owned by The New York Times Co (NYT.N), remains up in the air.
“Twenty, thirty years ago, they were a product that had pricing power that was essential,” said Buffett. “They have lost that essential nature.”
Buffett said Berkshire would hold on to the Buffalo News, a daily newspaper in the New York state city of the same name, if only because Berkshire buys businesses for the long term and does not sell simply because the companies hit a rough patch.
He did not rule out having to squeeze out excess costs, including possible job cuts, or eventually shuttering the paper if it goes too deeply into the red.
“On an economic basis you should sell this business. I said I agree 100 percent but I am not going to do it,” he said. “The union has been cooperative in having an economic model that will at least give us a little bit of money.”
Charlie Munger, Berkshire’s vice chairman, called the decline of the newspaper industry “a national tragedy.”
“What replaces it will not be as desirable as what we are losing,” he said
Baurch dayan emes.. I can’t wait to see the New York Times shut down..
The most benefited will be the orthodox community! Their a lot of people in the community who have a desire to knowledge and the community “don’t let them buy newspapers” so now they can have it on line!!!
This is NOT a good thing. Online publications have no ethical standards at all. While some papers have questionable ethics, for the most part they report honestly and factually. Yes… the editorial boards of the NYT and other papers are decidedly left-of-center, remember it was a NYT reporter who helped the Bush administration spread the WMD lies in Iraq.
A new system of reporting based on actual standards of integrity will need to be devised. If not, we will get news that is based on lies like we get from Keith Olberman and Alan Colmes on the left and Rush Limbaugh and Sean Hannity on the right… never really getting the TRUTH. I don’t want all my news coming from phonies.
Somehow, someone needs to come up with a way to bring journalistic integrity back to journalism in the electronic media world.
The transition to electronic media must be done properly by the newspapers. While consumers seem totally unwilling to pay for online newspapers, online news can still be quite profitable due to ad revenue and the lack of costs to physically print and distribute newspapers. The other difference is that online newspapers must compete against other news sources worldwide, unlike printed newspapers where the competition is only local.
Some newspaper companies have tried to charge for online subscriptions, however consumers have mostly refused to pay for these. This transition period will be difficult for newspaper companies. Once the industry evolves to be electronic only without any printed newspapers, then imo it will stabilize. What will be needed for that though is an inexpensive compact electronic text displayer that folds to a small size, and has long battery life.
The worst part is what to do on Shabbos and Yom Tov if you get a delivery of a newspaper.
If the only news is online or radio or TV, what do you do to get the Mets score?
the jewish weeklies won’t be affected too much as they’re mostly read on shabbos
the way to succed is they shold have less newspapers and the few left shold be unbiasd and one sided editorials it shold be strictly news and a little bit of analisys and with insight if this shouhld happen people might go back to news papers
You also should not visit the Times online- they probably make more when you view
them online.
send sulzberger Jr. and his paper that has all of the news unfit to print into the dun heap of history
From now on the orthodox Jews will special, they would be the only ones who inform the news by print not digital. In a lot of of the orthodox communities the Internet is band.
The Hate America N.Y. Times is going down. It has been going down for so many years. What a smug, out of touch, haughty, self-righteous rag of a newspaper!
This is NOT a good thing because the cost of newsprint paper is going to go through the roof and All newspapers will go out of business – even Jewish ones – it will be way too expensive to produce any newspaper at all