In an age of proliferating broadband connections, video iPods and multifunction smart phones, new technologies have permanently redrawn the competitive landscape. Experts say newspapers will survive–even thrive–but the change has shaken the foundations of what historically has been one of America’s most lucrative business models.
One problem is that as newspaper revenue and circulation deteriorate, yesterday’s assumptions can’t be counted on to be relevant in today’s world. Brian Tierney, the Philadelphia ad executive who recently bought the Philadelphia Inquirer and the Philadelphia Daily News, found that out the hard way. Since 2004, he wrote in a recent letter to employees pleading for cost cuts, cash flow at the company has fallen from $100 million to $50 million and is showing no signs of improving. If things don’t change, he said, the company will default on its debt as early as next year.
“This reduced revenue picture,” he said, “will be a permanent part of the future of newspapers.”
Chicago Tribune: ‘A Tidal Shift For Newspapers’