Newspapers Are Struggling
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During the last few days Coffee News guys discussed the newspaper industry and the situation these big players are in due to the current financial situation and also due to the impact of electronic media.
Here’s the take from Mr. Buffett on Newspapers (Mr. Buffett has long held himself out as a newspaper man. As a child, one of his first jobs was delivering newspapers. An Omaha newspaper Berkshire owned, Sun Newspapers, won a Pulitzer Prize in 1973 based in part on a tip Mr. Buffett provided. One of Berkshire’s biggest investments in the 1970s was the Buffalo News, which it still owns).
CEOs Should Take Investors Along for the Ride. His view on the future of the newspaper industry is dismal. "For most
newspapers in the United States, we would not buy them at any price," he said. "They have the possibility of going to
just unending losses."
As long as newspapers were essential to readers, they were essential to advertisers, he said. But news is now available in many other venues, he said.
Berkshire has a substantial investment in Washington Post Co. He said the company has a solid cable business, a good reason to hold on to it, but its newspaper business is in trouble.
Mr. Munger called newspapers’ woes "a national tragedy….These monopoly daily newspapers have been an important sinew to our civilization, they kept government more honest than they would otherwise be."
The question we need to ask; is how does this affect Coffee News?
Let’s get Bill Buckley the President Coffee News USA to explain how he sees the Coffee News given this backdrop:
We think it is important to make sure you do not believe we are linked in any way with what is happening in the other media. Because, we are not.
The important thing to remember is Coffee News is totally different than any other media and as a niche marketing publication, we operate at one of the most affordable price points in advertising.
- Our publishers work from home,
- deliver to the distribution points free of charge for the restaurant owners.
- We have no expensive staffs,
- no office towers on the best downtown real estate, and
- print one sheet of paper versus 28-96 sheets per copy.
- We have about high net profit margin when operating at capacity.
- No other media has this type of profitability.
- Since we do not have staff reporters and layers of management, our costs can beat anyone in the market.
When times get tough, as when Coffee News started in 1988, the interest in lower cost, effective and affordable advertising mediums such as Coffee News tend to be higher. This has been the case since last summer. This implies these companies are switching out of radio, TV and newsprint to less costly local advertising. We can see this here in our office by the large number of calls and emails we receive from businesses looking to advertise with you. Many of you will recognize my emails as I forward them on to you. We have never witnessed this kind of volume before.
Kindest regards, Bill Buckley, President Coffee News USA
Thanks Bill for the great insight.
