Wednesday, January 7, 2009
Every new year brings new predictions and one making the rounds is that heavy debt structures on the N.Y. Times could be the final straw come mid year. Certainly they are trying to sell some assets, including their share of the Boston Red Sox, but is it and front page advertising enough to save this old grey lady. Atlantic Monthly doesn't think so. "It’s certainly plausible. Earnings reports released by the New York Times Company in October indicate that drastic measures will have to be taken over the next five months or the paper will default on some $400million in debt. With more than $1billion in debt already on the books, only $46million in cash reserves as of October, and no clear way to tap into the capital markets (the company’s debt was recently reduced to junk status), the paper’s future doesn’t look good."
But does bankruptcy mean stoppage. Not necessarily. Bankruptcy is a do-over and may enable the Times and other papers like it to reinvent themselves into a leaner, meaner, more profitable news organization again. Consumers do read the Times and other web sites aggregate its content. Its the subscription model that is changing as content is simply accessed and not purchased. Can the Times save its subscription model by utilizing new technology - would electronic distribution on Kindle, iPhone, Sony Reader and others in a readable form be convenient enough for consumers to purchase. Or does content need to be made exclusive, with more controls to limit its availability without subscription. Or will advertising rates need to increase to offset subscription losses.
And so the predictions..."Regardless of what happens over the next few months, The Times is destined for significant and traumatic change. At some point soon—sooner than most of us think—the print edition, and with it The Times as we know it, will no longer exist. And it will likely have plenty of company. In December, the Fitch Ratings service, which monitors the health of media companies, predicted a widespread newspaper die-off: 'Fitch believes more newspapers and news paper groups will default, be shut down and be liquidated in 2009 and several cities could go without a daily print newspaper by 2010.'” A sad day indeed when the print newspaper no longer exists; let's hope that electronic subscriptions, with ergonomically designed readers to provide a satisfying reading experience, enables these news organizations to survive and thrive.
Posted by Andy Hunn