Fortune (through CNN web site: Can the Washington Post survive?) looks at the Washington Post’s drive to be successful in print. With motivation like director Warren Buffet saying that print won’t work, it’s a valiant effort that many newspapers hope will work. There is a question if other paper will make the transition.
Here’s some interesting take-outs from the article:
Cost cutting won’t be enough:
Operating income for the Post Co.’s newspaper division fell from $125.4 million in 2005 to $63.4 million in 2006. (Most of the decline was caused by a $47.1 million expense for early-retirement buyouts.) In the first quarter of 2007, operating income for the newspaper unit fell by another 53 percent.
The revenue lost from print will be much harder to replace online:
The best evidence of the difference is the fact that advertisers paid about $573 million last year to reach readers of the company’s newspapers, predominantly the 673,900 daily and 937,700 Sunday subscribers to the Post. Advertisers paid only about $103 million to reach the eight million unique visitors to the Post‘s Web sites each month.
It has been able to keep its local audience:
The Post‘s daily circulation peaked at 832,000 in 1993. It has dropped by nearly 20 percent since then, while the region’s population has grown by about 20 percent. Says Buffett: “Per capita readership really is falling rapidly.” Even so, the Post retains the highest penetration of any paper in a top-ten market
An interesting comment to the article from Steve Yelvington: Selling ice cubes in Antarctica
It’s a lengthy piece full of facts and sidebar graphics and illustrative anecdotes about the Washington Post, but I can boil it down to one simple truth: If your business model is predicated on scarcity and you’re suddenly operating in a world of surplus, you’re in deep doo-doo. Time to come up with a Plan B.