State of Local

Alan Mutter’s blog “Reflections of a Newsosaur” should be a must-read for anyone interested in the media. He recently posted some figures about the shocking collapse of valuation among publicly-traded newspaper publishers.

I suspect most of us realize it’s been a challenging time for the newpaper industry. But these numbers are honestly scary to anyone who regularly reads a newspaper.

The market value of the American newspaper publishers entering 2008 as independent, publicly traded companies has fallen by $23 billion, or 42%, since the end 2004, the year before the wheels started coming off the industry. Nearly half the slide in the market capitalization of newspaper stocks came in 2007, when the shares lost a collective $11 billion, or 26%, of their value. Thus, newspapers lost nearly as much value last year as they did in the two prior years put together.

The vaporized value of newspaper shares in 2007 exceeded the combined $10 billion market caps of Gannett and McClatchy, the nation’s two largest publicly held publishers by circulation. And the $23 billion drop in shareholder value since yearend 2004 equals the current total value of all the common stock of Belo, Gannett, Lee Enterprises, Media General, McClatchy, the New York Times Co. and the Washington Post Co.

There isn’t one answer to the question of how this happened. But part of the blame is certainly that newspaper (like many other mature media companies), failed to see the shift of readers to the online world. Even worse, when they did see the shift, they failed to move quickly to make the difficult changes necessary to survive.

Now if you think that I’m being unduly harsh on the newspaper business, keep a couple of things in mind. First, a reluctance to change is a trait that isn’t just confined to the newspaper business. There are all sorts of media companies that missed opportunities because of their hesitation to change.

Secondly, I truly love the newspaper business. My first paycheck as a journalist was from a newspaper. I would love to see them continue to do well. But when I see job listings like this one from the Minneapolis Star Tribune, I do wonder about the ability of some established papers to compete.

The Strib is looking for a Managing Editor Online and Interactive, and while I think the definately need the person in their organization, much of the description sounds like something that should have happened three or four years ago:

This is a terrific opportunity for the right person. We are seeking someone with a vision for how to transform our website from primarily a newspaper on the web to one that takes full advantage of the media and the connectivity that the web offers. This editor will work across our newsroom to develop print, audio and video content for online and interactive, including scheduled programming. This person will drive interactivity with readers and users at all levels, in print and online. He or she will work with journalists, as well as advertising and sales, to develop content needed to grow audience and advertising.

“Transform our website from primarily a newspaper on the web?” To be kind, that’s the type of transformation that should be well on the way at any newspaper–much less one that bills itself as one of the top twenty newspapers in the U.S.

On the upside, the $100,000 plus salary is a nice perk for the person lucky/unlucky enough to tackle this challenge.

A very smart stock analyst once told me that media companies needed to be like sharks. Because sharks either swim or die. And faced with that option, change and speed are the best survivial skills.