March 21, 2014

Newspapers ... being short-sighted again

The consortium that owns Cars.com, second only to AutoTrader as a spot for online car buying, and revenue thereof, is looking to sell.

And probably shouldn't, Ken Doctor says. Yes, it will be a short-term windfall, and a McClatchy, which has a boatload of debt (and is one of the country's top chains in terms of news quality), could use that.

On the other hand: 
The great value — $3 billion worth — built largely by newspaper brands  will be mostly gone. Ironically, it will strongly finance a move to broadcast, by both Tribune and Gannett. Value created. Value harvested.  Value to be transferred. Value gone.
That's the newspaper biz!

As is this:
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That lost value, though, is only half the equation. Cars.com operating revenues are a significant ongoing revenue source for all these newspaper companies' papers. By the nature of the original Cars.com agreement, the newspapers "owned" cars in the market. They've enjoyed special wholesale rates on the Cars.com products they sell local dealers. Wholesale prices mean that their car revenues are highly profitable.
Having lived in Dallas for a number of years, and seeing how much color advertising the Dallas Morning News runs in print for dealers, I know wonder if that's been in part because the Snooze has been able to offer "combo" rates at very affordable levels, because of the Cars.com ownership.

As for the Snooze? Assuming the sale goes through, and is short-sighted, I wouldn't be surprised by a formal JOA between it and the Fort Worth Star-Telegram, no later than 2020.

That said, the story notes this is part of the broader ongoing demise of most newspapers.

The Trib will assign its proceeds to the broadcast half of its split. Gannett, having bought Belo's news stations, may be looking at a similar split. Belo will soon be nothing other than the Snooze. The Washington Post, post-Bezos buy, temporarily gets the "wholesale" rate, but that will end.

Meanwhile, that broader demise, and short-sightedness, may play out elsewhere.

Also per Doctor:
"If Gannett and its partners are willing to give up the dividends of Cars.com, how much longer are they going to own CareerBuilder, which is more of a cash cow?" asks Peter Zollman cofounder and head of the AIM Group and Classified Intelligence Report,which tracks the industry globally. CareerBuilder, owned by Gannett, Tribune, and McClatchy, is the largest digital recruitment site in the country.
Good question indeed. And, if the same folks above are short-sighted there, too, oh, it will be sold by 2020.


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Speaking of Bezos, are we getting closer and closer to some newspapers of some note not just going digital first, but digital only? Robert G. Picard has some tips on signs you should make that switch and how to do it. This is something else that will probably lay in an unchecked in basket, though.


Beyond digital only, he also covers the angle of circulation first, including digital, vs. advertising first. Of course, the New York Times is already there. Newspapers in general, if they get far enough past 51 percent ads, can tell advertisers bitching about news stories where to get off, which is a silver lining.


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And, I'm not sure if this is UK-only or across the world, but Puff Hoes may put in a paywall. Will we notice? Will the serfs who continue to write for "exposure" for the Greek Gargantua suddenly, naively and stupidly now expect to get paid?

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