Value of 'old media' companies collapsing as readers reject mainstream media in favor of New Media

(NaturalNews) The mainstream, legacy media is continuing to struggle for attention as more and more Americans abandon their propaganda for the truth and salvation of independent and alternative media information sites.

Agence France-Presse reports that the value of Old Media has dropped significantly in recent years, especially the traditional newspaper industry, as it has struggled to cope with the rising New Media landscape.

This was epitomized recently by the sale of the San Diego Union-Tribune in early May for $85 million, AFP said, which "underscored the horrific slump in the value of 'old media' companies" in the past several years.

AFP further reported:

Although the sum paid by Tribune Publishing was only marginally below the $110 million in a 2011 sale of the San Diego group and excluded some valuable real estate, the newspaper was believed to be worth as much as $1 billion as late as 2004.

Revenues decline as investment dollars in digital platforms remain scarce

This story is being repeated at major metro dailies all over the country. In fact, the Pew Research Center says that valuations of the Boston Globe, Philadelphia Inquirer, Minneapolis Star-Tribune, and Chicago Sun-Times are all down by more than 90 percent of their peaks. While these and other legacy papers are attempting to retain readership by offering digital subscriptions and mobile apps, such efforts appear to be too little, too late for many.

For U.S. dailies over the past 10 years, weekday circulation has dropped off 17 percent. In addition, ad revenue has fallen by more than 50 percent as advertisers turn to online dailies and other media, Pew noted.

The financial hemorrhaging got so bad last year for three large media companies that they opted to spin off newspapers so they could concentrate more on profitable enterprises like broadcast or digital properties.

"Every newspaper chain talks about getting digital faster. The plain truth is that despite almost two decades of effort, most aren't close to where they need to be," Ken Doctor, an industry analyst who is the author of the Newsonomics blog and consultant for the research firm Outsell, told AFP.

In short order, Doctor predicts, newspapers won't be left with many options except to cut the frequency of their print editions, as several dailies have already done. Alternatively, they might opt to go completely digital, as some have chosen to do.

That latter option is easier said than done, however. Developing a user-friendly digital platform that retains some of the print version's identity is expensive, and since ad revenues for the industry have not increased since 2008, it is more difficult to invest in digital because the funds are simply not there.

During the first quarter of this year, seven of the biggest newspaper groups only generated a combined profit of $21 million. In 2005, the massive Gannett group alone earned $1.8 billion.

"These companies have little to invest," Doctor said. "They're still paying off debt, issuing dividends, keeping up with pension obligations, and anticipating print ad results that can't find a bottom."

The red ink will continue to flow

Even the legacy starship paper The New York Times, which as been one of the most aggressive in shifting to digital news, acknowledged recently that 70 percent of its income is derived from the print editions.

What is the solution? Alan Mutter, a former Chicago newspaper editor who now consults on digital news, told AFP that newspaper groups should rethink their strategy and act more like startups.

"People in the media business have to recognize they're not in the print or broadcasting business, they are in the business of attracting audiences" to sell advertising, he said.

Other papers are beginning to partner with huge digital brands such as Facebook, Google and other media companies that have a global reach.

In the meantime, the legacy papers will continue to be printed in black ink, but it's the red ink that will ultimately spell the demise of many of them.

Sources:

http://www.businessinsider.com

http://www.westernjournalism.com/proof-old-school-journalism-dead/

http://www.aim.org