July 14, 2006

When the Analysts are Right

In January of this year, Merrill Lynch predicted that "newspaper ad revenue growth in 2006 is likely to trail even the paltry estimated 2.4% in 2005." Look out, I said, journalists can expect the "the boardroom hammer will fall once again on the newsroom."

Sadly, the brokerage and I were both right - second-quarter earnings in most news companies (except McClatchy) are dismal and the boardrooms are wielding the ax, with the Chicago Tribune announcing 120 job cuts, including an unknown number in the newsroom.

I tell you this not to gloat but because "we live in a digital age that is fundamentally changing how people get their news and information" - the first sentenced from the Dow Jones memo announcing the company's news reinvention project. (Thanks, Romenesko).

For journalists working in newspaper newsrooms, consider these financial reports as a series of wake-up calls, the quarterly tolling of a bell that tolls for thee, my friends.

The digital newspaper future is already here - and it's not one most journalists would have invented, but if they don't seize control of the change process then someone else, someone from the boardroom, will do it for them.

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Posted by Tim Porter at July 14, 2006 08:43 AM
Comments

Newspaper owners have long since forgotten that it's the newsroom that makes the product and beefing it up would improve the product. The product needs improving and that's the real problem. Perhaps if these papers were interested more in news and public service than advertising and executive pay this wouldn't be a problem.

Is anyone really surprised by all this?

Posted by: John C. Dvorak on August 15, 2006 10:26 AM

I believe that most in our industry still have their heads in the perverbial sand. The newsroom hasn't even begun to see what is coming as displayed by Ohmynews.com and others. The bottomline, producing a informational newspaper can be done with very few people if set-up in the right fashion.

Just like our Public Education system seems to think that more funds will improve system, our newsrooms think that more staffing will solve the problems. Both are sadly mistaken.

Posted by: John Newby on September 12, 2006 06:25 AM

Newspapers are making the same mistakes in the 21st century as the railroads did in the 20th century. Railroads thought they were in the railroad business, but they were in the transportation business. They were eclipsed because they didn't adapt; they didn't adapt because the business model didn't change as technology impacted the industry. Newspapers are in the information business, not the newspaper business. Technology is changing the information marketplace rapidly, so the newspaper business model must change rapidly, too. Individual journalists much adapt to the information industry changes -- whether or not their newspapers do -- if they are to survive as journalists.

Posted by: Lou Bloss on September 19, 2006 09:34 AM
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