Newspaper industry is ‘overly pessimistic’
Posted by Evan Fell on December 13, 2007 at 1:42 PM
Credit Suisse analyst John Klim has recently produced a report on the newspaper industry that explains things are not as bad as they seem to be. He made the point that the industry downturn is more cyclical than secular, having more to do with economic factors, like real estate softness, than anything inherent to the industry.
Klim acknowledges the changing nature of the industry and the threat from digital media, but believes newspaper companies are well positioned to take advantage of these trends.
According to Klim, cyclical factors have accounted for roughly two thirds of the industry’s ad revenue slide. He explained that declines in national, retail and real estate advertising were almost entirely due to cyclical forces, though the decline in help wanted ads had more to do with secular trends. These trends are expected to continue through the end of 2008 and could reverse themselves if/when the housing economy comes back.
For digital Klim says, “Newspapers must ultimately transform themselves from lumbering dinosaurs into nimble, multiplatform information providers capable of reaching customers in print, online, or by mobile download.” He says that newspapers need to exploit areas including online video, particularly as it relates to breaking news, timeliness, interactivity, the end of distribution barriers.
Klim stressed the need for newspapers to emphasize accuracy and reliability in order to compete with blogs and other alternative news sources.
Klim argues that the newspaper industry is overly pessimistic. He says that the New York Times is one of the best-positioned papers, where digital is expected to account for 12.8 percent of revenue in 2008.
Source: paidContent.org
According to Klim, cyclical factors have accounted for roughly two thirds of the industry’s ad revenue slide. He explained that declines in national, retail and real estate advertising were almost entirely due to cyclical forces, though the decline in help wanted ads had more to do with secular trends. These trends are expected to continue through the end of 2008 and could reverse themselves if/when the housing economy comes back.
For digital Klim says, “Newspapers must ultimately transform themselves from lumbering dinosaurs into nimble, multiplatform information providers capable of reaching customers in print, online, or by mobile download.” He says that newspapers need to exploit areas including online video, particularly as it relates to breaking news, timeliness, interactivity, the end of distribution barriers.
Klim stressed the need for newspapers to emphasize accuracy and reliability in order to compete with blogs and other alternative news sources.
Klim argues that the newspaper industry is overly pessimistic. He says that the New York Times is one of the best-positioned papers, where digital is expected to account for 12.8 percent of revenue in 2008.
Source: paidContent.org
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