A reader of Talking Points Memo writes in to suggest there may be hope yet for struggling newspapers. Essentially, quite a few of the troubled newspapers operate profitably, just not profitably enough to cover the interest payments of these over-leveraged corporations.
So, these bankruptcies may in the medium to long run be good for journalism (in the traditional sense). Assuming the new owners emerge from bankruptcy with limited debt, the papers have many positive attributes upon which to earn a reasonable profit while building new sources of revenue. They have an unparalleled local focus and understanding, they are the most efficient vehicle for several categories of advertising, and they have significant advertising sales forces that can be re-focused on lines of business that can sustain the papers over the long haul. This is particularly true if the surviving owners are people who believe in the public trust mission of their papers and news-oriented web channels.
Also, in an interview with Michael Lewis in The Atlantic, we learn that Lewis isn’t concerned about the magazine industry.
Well it makes it a little hard for me to prophesize doom. And I hate spinning theories to which I’m an exception. So my sense is, there’ll always be a hunger for long-form journalism, and that it’s just a question of how it’s packaged. And that people will always figure out how to make it sort of viable. It’s never going to be a hugely profitable business: it’s more like the movie business or the car business in that there are all sorts of good non-economic reasons to be involved in it. The economic returns will always probably be driven down by too many people wanting to be in it.
But I don’t feel gloomy about the magazine business at all.