[Buffett talks newspapers in Vanity Fair issue out today]
In an interview with Vanity Fair writer Sarah Ellison, legendary investor Warren Buffett discussed his 20% stake in the Washington Post Co., explaining why the pre-digital newspaper model once fit into his Berkshire Hathaway strategy. An excerpt from her article, available in the issue on newsstands today:
"In newspapers, the basic rule was survival of the fattest, and the trick was to be bigger than the other guy because at that point you had more help-wanted ads, you had more automobiles for sale, you had more people if you lost your dog who might find it if you ran a classified ad. And you got more dominant because to most people -- this kills people in the news business -- the most important news in the newspaper are the ads."
[Updated at 3:51 p.m. ET to add following Elias purchase.]
Another director buys GCI
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| Elias |
His investment followed an even larger purchase of last week of 15,000 shares by Director Duncan McFarland, at $15.51 each. Cost: $232,650.
Shares of the Post Co. and Gannett are both recently down 9% from a year ago vs. a 4% gain in the S&P 500 index, according to Google Finance.
It is amazing how many in this industry, especially within content development groups (editorial depts), still struggle even today with the concept that “Advertising is News Too.”
ReplyDeleteDon’t believe it?
Ask a reader what "news" more directly and routinely impacts them most: Local, state, national and world events or opportunities on how they can save on grocery purchases, thousands on a new car, find a new home, etc? All is measurably more valuable "news" to them, something print newspapers (and dare I write shoppers too) have been delivering in print for years and now through various electronic channels.
Gannett directors should ONLY be paid in company shares.
ReplyDeleteBuy low as the saying goes.
ReplyDelete2:03 -- In pointing out the shortcomings of editorial folks, you reveal your lack of understanding the industry in which you work.
ReplyDeleteIt's not the lack of acceptance by editorial folks that readers find coupons, deals, etc. useful. They get that. It's what I think too many, including newsrooms and advertising folks, do not understand about news vs. information.
News is information; but not all information is news.
It's a sometimes subtle -- and sometimes obvious -- difference, but important to know and understand, especially as it relates to a reader/consumer perspective.
What the opposing sides seem to do is waste time arguing over is whether news and information are valuable. What they really are arguing about is which is more valuable or important and jockeying for who should call the shots, gain more space or be "king of the hill."
Both sides need to wake up -- News and information have value and are important to readers/customers. The degree to which they find one or the other less or more important is what a company must determine -- then deliver. Here is what many media folks are unprepared for -- that mix will vary based upon many factors i.e. demographic, geographic, seasonal, mission, medium.... So one audience may want 75% ads or other information and 25% news -- only to irritate some journalists; In another instance (community), they may want 75% news and 25% ads or other information --- to the chagrin of ad reps whose pay is based upon commission. The problem is it's difficult to be efficient operating so many wheels with so many variances.
I think this debate is a waste of energy.
I think a more important debate is why the business model for news/information even for pureplay Internet companies still are largely based on the old models at lower price but on a different platform?