I have heard Warren Buffett referred to by newspaper publishers as supporting of the print medium. In at least two presentations over the last few years I have heard that Buffett and his business partner, Charlie Munger, read five newspapers a day. This was presented as support for the future of newspapers. Newspaper publishers are unlikely to refer to Buffett again thanks to comments he made a few days ago at the annual shareholders meeting of his Berkshire Hathaway business where he told his shareholders that US newspapers face “unending losses” and that they are no longer “essential”.
What does this mean for us here in Australia? Publishers will tell us it is business as usual. They would want us to ignore what is happening in the US. Some newsagents will believe that. My view is that the crash of US newspapers we are witnessing this year is an early warning of what will happen here in the future. Our excellent home delivery system is delaying the impact because small business newsagents carry the more of the high cost of distribution than delivery contractors in the US. We are also insulated because debt levels of publishers are different here – although Fairfax does appear to be more challenged in this area than News.
Rather than focusing on the gloomy news, we need to embrace the opportunity.
Newsagents need to make business decisions with the full knowledge of what is happening to newspapers in the US. We cannot rely on newspaper generated traffic to our businesses forever, not even for five years. We need to build new traffic urgently. In-store, we need to be flexible in our offer, expand our range and focus on categories which generate their own traffic and do not rely on newspaper traffic to drive sales.
While it is sad to see US newspapers crash, we have a once in a lifetime opportunity to reengineer our businesses before we loose newspaper traffic here. We need to focus on that opportunity and embrace it for our own future.
UPDATE: Fox Business has the full quotes re newspapers.
Putaway customers get bigger and better bugs with their real Life Bugs magazines in our newsagencies. When setting aside put away product, we choose the best looking bugs for our putaway customers. Click on the image for a larger version and see for yourself. The bug on the left is better, it is for a putaway customer, as the label shows. We do this because customers compare bugs when buying this series. Once we realised this, it was an obvious decision to make the selections when we do our early morning allocations.
