Buy a typewriter! Don't buy stock in the Print Media

There was a time when typewriters were hot and investment in companies like Olivetti, Royal and the like were wise and rich moves. The same today may be said of print media companies. If ever there was writing on the wall, now is the time. The New York Times and the Tribune Company (The Chicago Tribune and others) are engaged in forced cutbacks and greatly curtailed plans as the internet takes away their advertising and news businesses in ever greater chunks. They are fighting back by selling off parts of their companies and making weak entrées into the internet world, but it is a loosing battle. Fewer and fewer people read print papers, more and more people get their news from TV and the internet, and advertisers go in greater and greater numbers – obviously – to where the eyes are.

There was a time when typewriters were hot and investment in companies like Olivetti, Royal and the like were wise and rich moves.  The same today may be said of print media companies.  If ever there was writing on the wall, now is the time.  The New York Times and the Tribune Company (The Chicago Tribune and others) are engaged in forced cutbacks and greatly curtailed plans as the internet takes away their advertising and news businesses in ever greater chunks.  They are fighting back by selling off parts of their companies and making weak entrées into the internet world, but it is a loosing battle.  Fewer and fewer people read print papers, more and more people get their news from TV and the internet, and advertisers go in greater and greater numbers – obviously – to where the eyes are. 

 

The New York Times indicated that it will cut costs by $230 million in the next two years.  The Tribune Company saw second quarter profits plunge by 58%.  It is just common sense to run from these stocks like the plague.  It doesn’t make sense from any perspective.  It is sad to see this happen, but sadness and regret have never been cause for wise investment decisions.

 

Buy a typewriter; it would be a better investment.

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Comments

  • Anonymous

    July 27, 2007

    I agree, but I can't understand why smart and successful folks like Rupert Murdoch, Jack Welch and Sam Zell are buying these assets. Even Warren Buffett has discussed it.

  • Anonymous

    July 27, 2007

    I think these companies have some good assets which may be why some savvy investors are willing to take a gamble. Remember also that the price of these assets is quite low, making the gamble much less risky than investing in Google, etc. Buffet may be bottom-hunting.

    I think the basic problem the print newspapers have is print revenue is declining faster than online revenue is rising. And online revenue will never match the monopolistic money they made before. Now, the newspapers must compete with online magazines, Blogs, etc. There is almost no cost required to start widely disseminating the news. Any reporter can start their own Blog and begin to make money. Many entrepreneurial reporters have started to do this already.

    I think newspapers will survive in some form - rumors of their demise are probably greatly exaggerated. But they are going to have a very rocky road.

  • Matthew

    December 12, 2007

    Just because Print is dying doen't mean New York Times or the Washington Post will die with it. They can live off IF they adapt to the new trends. So far that has meant trying to pretty-up their websites, but that's not enough.

    If I were a newspaper executive I'd be seriously investing in ePaper.

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