Business Channel 2007-01-23&25

This week CNN's very own parent company, Time Warner, laid off more than 250 employees in its print division. The cuts are a part of a growing trend throughout the print media business. So are we really headed toward a day when newspapers go the way of the record player? And if so how will journalism 1 look if Americans turn to the Internet as their main source of news? Joining us now is Washington Post media critic Howard Kurtz, who also hosts "Reliable Sources" right here on CNN. Thanks so much for joining us.

Sure.

All right, so here is the question, are we looking at a time when basically everyone just forgets about newspapers altogether and we're all going to the Internet or some other way of getting our information? What do you think?

The news has been so depressing, I'm thinking of going into blogging full-time 2. I think all the arrows are headed south. You know, circulation is down including at this paper. Our advertising 3 revenue is down. All of those department stores that used to advertise in paper make them fat, half of them have gone out of the business. You can put ads on Craigslist for free, it's hard to compete with free. But I still love ink on paper, and it's hard for me to accept. As great as Internet is and as much as we all like surfing it, that there won't be some place for the old-fashioned newspaper.

You talked about Craigslist and ads for free, but what about free papers? You know, every day when you get on the subway, there're at least two guys trying to hand you a free paper. Is that a trend we're gonna see more of in the future?

Eh, the short answer is yes. At the Washington Post, for example, the free commuter 4 tabloid 5 has gone up in circulation from about 125,000 to 200, 000, while circulation for the, the, the normal paper, the paper you have to pay 35 cents for is down. But the problem is that that's a short truncated 6 thing filled with very short stories. And what's good about newspapers, why should we worry about saving that? Because they do reporting, they gather facts, they give texture 7 and context and history, and all of that. They offen, too often, indulge, I think is part of our problem. But I don't think that, you know, it's hard to read a long story on the computer screen, your eyes glaze 8 over after a while.

Howard, it's Ali, good to see you again. You know, Stephanie was talking about going the way of the record players. You know, these record players are back for the high-end, the audio files who feel like digital music is too compressed, and they really need to hear it the original way. About four people have high-end record players now. You talk about going to blogging --- you got blogging, you got podcasts, you got breaking news alerts, you got... nobody goes to the newspapers for classified or for stock prices any more. What is it? Is it the analysis?

In other words, why should people read papers?

Yeah, yeah.

Well, for one thing you can take it on the subway with you and you can even take it into the bathroom but…

Take care, you can take care of your iPod on the subway with you and some might take it into bathroom too.

I guess that's you. And look, you know newspaper companies are finally, belatedly, waking up to the fact that they have to go digital, that they have to have a good website and podcast and all that, that's one of the reasons that I am blogging. But at the same time, you know, one of the reasons that circulation going down is we are all giving it away for free, anything you wanna read in Washington Post, New York Times and L.A. Times, you can go online and see it there. But you know, here is the thing, when you go online, you, I kinda feel like I don't get the full diet, I feel like I just get the ice cream and cookies. You click on things, but when you turn pages of newspapers, sometimes you see stories that you didn't know you'll be interested in and you spend some time reading that. This's a certain serendipity 9 factor. Now maybe this makes me old-fashioned I know younger people have no use for paper. My own teenagers read all the news online. But I still think, maybe it becomes a niche 10 product, but for people who want, eh, more depth and more texture and more length and the big staffs here. We know, we have experts who cover the Pentagon and science. It's hard to support that kind of staff.

Well, look, exactly. That's exactly the thing I was thinking about, Howard. Because I am listening to what you're saying, we know people 30 years and younger aren't really into papers. You're nostalgic, that's kind of what you do. So that makes sense. But when we are looking at the profitability here, are the newspapers actually bringing in money? Coz at the end of the day, they're businesses.

But here's the thing that nobody focuses on. Newspapers are still very profitable. I mean, clearly they have taken a big fat hit, but, you know you have these companies like Tribune, which has put itself up for sale, and Knight 11 Ritter, which is now out of business. They weren't satisfied with 15% or 18% profit margins 12, which in most industries the stockholders will go crazy. They want 25% profit margins. So it's not that newspapers aren't making money, it's that they have to figure out a way to transition into this new world. And when you give it all away for free online, because people don't like the paper things online. The advertising revenue from these banner ads on your computer screen just won't support. The several hundred people that takes to put out, for example this newspaper. So something is gotta give you, the people want at least the quality journalism the newspapers still provide, either they are gonna have to pay a few cents or a few dollars in order to get that online, or we are gonna have to find a way to do with a lot fewer people which I think is gonna be a blow to serious journalism.

All right, Howard Kurtz, thanks so much for joining us.

Thank you.

Howard Kurtz is a media critic for the Washington Post and he also hosts "Reliable Sources" right here on CNN.


Vocabulary


truncated adj. A truncated version of something is one that has been shortened.
The report is also available in a truncated version.

belatedly adv. later than usual or than expected
The leaders realized belatedly that the coup 13 would be disastrous 14 for everyone.

serendipity n. Serendipity is the luck some people have in finding or creating interesting or valuable things by chance.
Some of the best effects in my garden have been the result of serendipity.

nostalgic adj. If you feel nostalgic, you think affectionately about experiences you had in the past.
You tend to be nostalgic, and like things to be as they have always been.