I think in a way he's talking about newspapers getting back to their real roots as being genuine 'NEWS' papers. That's instead of the trashy gossip magazines that so many of them have turned in to.
No, I don't think that's it. Well, ok, yes I'm sure he would agree in that papers shouldn't print trash, but I think his point was that the Omaha World-Herald should stop pretending it can cover news out of Washington without a Washington bureau. Local papers are wasting money buying wire stories on national news that is not especially valuable to its readers.
In general trashy gossip magazines sell, that is why there are so many of them. There is a feedback mechanism there perhaps...
But that is in general. It seems Buffet here is a focusing on specific areas with a population that will be very likely to be interested in a local newspaper. Small, well established towns, with a strong sense of community.
The problem is see with that is that local communities that used to be established and strong can be destroyed pretty quickly according to how the local employment landscape changes (say a GM plant closes).
I think he feels newspapers should return to their original function of writing their own (local) news and doing their own investigations. NOT 'copy/paste' all the Reuters-news. We've got the web for that kind of news.
The problem is that the cost of generating and distributing that local news is not sustainable in the face of internet technologies.
Witness this: I'm at a graduation celebration in Wisconsin this weekend, and all the parents attending throughout the day are very involved in student athletics. One of the kids was running in a track competition out of town with the rest of the school. The results were texted immediately throughout this small town. Another parent was tweeting the play by play of the track meet.
These are tech savvy 40 year olds, completely bypassing the print world. What can print offer them? Maybe a pic or two? They've got those instantly via FB. If this crowd is doing it, it's over for print papers.
And since online papers either need a paywall or higher revenue for ads, they just can't compete.
You were witnessing the people who are directly connected to the event, either through a member of the team or through the school. What about the other 500, 5,000, or 20,000 people in the town that didn't care enough to have instant notification, but still want the information even if it's a day later? That's where you make money.
What about the other 500, 5,000, or 20,000 people in the town that didn't care enough to have instant notification, but still want the information even if it's a day later?
How many events in that class tend to happen? Anybody who cares about a high school track meet is either there, or connected via Twitter/FB/whatever with the people who are. Larger scale events are bipolar: they're either not of immediate interest (new highway construction announced), ignored entirely by most people (the President is in town), or people want to know what's happening now (chemical spill, bomb threat, school shooting...)
The one thing that can be said about local print newspapers is that they aren't the best vehicle for disseminating any of the above news topics except possibly the big-but-not-of-immediate-interest kind.
Finally, the ultimate fate of the newspaper cannot possibly be understood by anyone who, as in Buffett's case, admits he doesn't understand tech.
Are they willing to pay? It appears (based on subscription numbers) that the number of people willing to pay are decreasing.
A lot of the people I work with rely upon FB to serve as their "news." And I in turn use HN as a kind of news service. I rely upon FB, HN, twitter, and RSS for the majority of my news intake. The problem will arise when all that's left are either blog posts that have variable reliability and wire services that have variable depth.
Not sure why you're getting downvoted here. Isn't this the same effect Buffett is talking about in the letter when he describes the local paper's advantage in coverage of "local sports?" People will pay to read about their kid's soccer goal; people will pay to peruse the list of people who got picked up for DUIs last week and look for anyone they know. Am I misunderstanding Buffett's position here?
That was my point. Everyday the first page my mother reads in her local paper are the obituaries. Next stop is the community pages to see who filed for marriage certificates and divorces, followed by the high school sports and maybe the front news section if she has time.
I get phone calls from her because so and so that was in my high school class had a baby or was picked up by the cops. It's never to discus the latest city council meeting.