PressEthic

I have good news and bad news—which one do you want first? Since, the internet for all its mighty powers has still not evolved to a point where it can actually talk back to me, I will take a unilateral decision.

The good news is that newspapers are still a profitable medium, and the bad news is that in spite of being profitable they will continue to lay people off.

According to AP business writer Seth Sutel the problem is simple. Newspapers are in trouble becasue advertisers and consumers are moving to the internet , and newsprint expenses are going up.

It is a match made in hell as far as newspapers are concerned, and they respond by laying off employees who have been costing them more and more ( health care on the rise etc.).

However, there is a little twist in this little sad story.

Industry analyst John Morton says that newspapers owned by publicly held companies earned an average of 20.5 cents on the dollar in 2004, a very healthy margin for any business. By comparison, companies in the blue-chip Standard & Poor's 500 Index of large U.S. companies made an average of 11.4 cents on the dollar in 2004, according to S&P.

Now that is enough to shatter my whole belief system. I thought newspapers were dying or at least going bankrupt, and that’s the reason I will be jobless after graduation. This theory seems to add insult to injury by implying that newspapers are alive and kicking, but there is still a good possibility that I will be jobless after graduation.

It turns out that these lay-offs are not so much an outcome of any urgent or pressing issues. They are infact an attempt to curb the downward graph of profit margins, and safeguard the future of newspapers.

Newspaper publishers are feeling pressure from investors to prove that they can still be profitable in the face of all these challenges. Cutting jobs and other costs, such as using less newsprint by printing a smaller newspaper, are some of the ways that publishers are trying to preserve their profit margins while revenues are faltering. Plus, many of them are expanding their efforts to make money on the Internet.

Given the plight of Knight Ridder (which for some reason pulls at my heartstrings like no business story should) it seems to be a wise decision. I guess it is time to stop fighting the online trend and simply adapt-- the article does claim that newspapers are not an easily dispensable medium. It is just a matter of how well they manage to pull off the transition from print to online