The newspaper industry's 7.9 percent ad revenue drop in 2007 is not nearly as bad as it sounds. Says who -- the press office of the Newspaper Association of America? (Well, actually
they do.)
But I just stumbled upon an unexpected vote of confidence that the sky is not falling and that the industry, perhaps even the print part, will be around for decades. The
positive take comes from Chris Anderson, editor-in-chief of
Wired magazine, blogger and creator of the influential "long-tail" theory (which holds that products of interest to relatively few people retain value because of the easy access the Internet facilitates).
Anderson argues that preoccupation with change and rates of change misses the consideration of how big the industry remains. And I would add, for most, how profitable.
"Surprisingly the industry is just 10 percent off its historic highs (much like the stock market)," he writes, "and is still twice as big as it was 20 years ago." (The figures, one of several thoughtful comments noted, are not inflation-adjusted.)
"If you had asked me to describe the state of the newspaper industry based on the scary coverage about it alone," he continues, "I would have guessed it had fallen by half and that we were back to 1970 levels."
Anderson offers the analogy of
Consumer Reports. Some would say with 4 million subscribers, the publication must be doing something right. Others would claim
Consumer Reports is dying because it had 4.5 million subscribers two years ago and lost more of them last year than the year before.
Anderson closes with speculation that some smart private equity guys are going to look at the newspaper business and see that "the value left in it can make a mint."
Interesting parallel reading: In
a discussion at Columbia's J-School today on the merits of different forms of ownership, John G. Chachas, the co-head of the Media and Digital practice at Lazard Freres & Co., predicted that the era of public ownership of newspapers is ending. But there will be plenty of private companies, he said, stepping up for newspapers that still "generate a lot of cash flow."
That comes from the investment bank that
just signed on to help restructure Journal Register Co., with or without bankruptcy protection. Wall Street has treated Journal Register rudely of late. The company is being threatened with delisting from the New York Stock Exchange and closed yesterday at 25 cents a share.
