Why newspapers are screwed? Why we should be worried

[Image: newspaper]I know it’s a little bit fun to run the numbers like this on why newspapers are screwed financially going forward:

Revenue drops by more than half, 40%-50% of employees get fired, and the company still loses money. Using the NYT’s Q2 numbers and these assumptions, for example, revenue would have dropped from $789 million to $285 million. More importantly, EBITDA (earnings before interest, taxes, depreciation, and amortization) would have dropped from $118 million to -$64 million. Which means that management would just be getting ready to fire a few hundred more people.

But this worries me. The basic idea behind that article is that the bulk of the money the NYT spends is on content creation. Which is SO IMPORTANT.

If we’re going into a world where nobody can afford to go out and do reporting…I’m not excited to get there. There’s enough crap, non-news already. TV stations barely do research. Newspapers account for almost all new information injected into the media, absolutely including blogs.

So if newspapers die…who is going to keep us informed? You can bet people won’t volunteer with the same rigor or accuracy. And, have you WATCHED TV news recently? I really don’t need to know about the six year old girl who can’t smile. I need to know about what my Senators are voting on today.

I, for one, hope newspapers (and by extension, magazines) stay around. They’re the one source of news I still consider a source of news.