By paulgillin | July 1, 2007 - 5:59 am - Posted in Advertising, BusinessModel, Circulation, Layoffs, Newspapers

Alan Mutter gathers up the dismal earnings reports of the major newspaper companies and asks the tough question: how long can these businesses survive?

He writes:

“While everyone in the newspaper business acknowledges that the good old days are gone, few people viscerally understand how rapidly the industry is coming to the point that it cannot sustain itself without farther-reaching – and likely more wrenching – structural changes than such relatively modest efforts to date as scrapping stock tables, outsourcing telephone ad-takers or even down-sizing newsrooms by 50%.

“Absent plans to pare entrenched bureaucracy, eliminate archaic work rules and speedily implement bold strategic initiatives to build significant and sustainable new revenue streams, the industry could find itself on a hopelessly irreversible trajectory. If it isn’t there already.”

I asked much the same question in my essay, “How the Coming Newspaper Industry Collapse Will Reinvent Journalism” earlier this year. The point is that the economics of newspapering – with its high fixed cost – doesn’t scale down very well. At some point, it becomes impossible to meet operating expenses, and when that happens, the whole model collapses very quickly. We will barely know what hit us.

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