Dallas Morning News publisher Jim Moroney III recently sent his staff a memo that said: “We’re no longer a newspaper company. We’re a news media company. The newspaper is just one way we package and distribute the content we publish.”
He pointed out that companies in the newspaper business are still needed, because they “are doing the bulk of local, regional and state government watchdog reporting in our country, reporting that is so critical to a durable democracy,” but they will be delivering their content in a variety of new ways.
However, the traditional model of paying for the news delivered must change. The traditional newspaper model—where advertising is responsible for 80% of the revenue and consumer payments represent 20%—is not sustainable. In the future, “direct payments from consumers will need to account for 50% or more of newspaper companies’ total revenue,” he said.
Moroney pointed out that while historically advertising revenues represented 80% of total revenue, that percentage declined by 8% in 2007, another 17% in 2008, another 24% in 2009—and is down another 9% through the middle of this year.
Yet despite these declines, most newspaper company operations remain profitable. The reason many are suffering is that they took on huge debt prior to 2001 when the slide started and their profits are not large enough to refinance the newly acquired debt.
Moroney also provided a prescription for how newspaper companies can sustain their profitability. Read the whole story on followthemedia.com.