Monday, July 2, 2007

Report: Transition period from print to online will be painful

For sure we know its been painful for hundreds of our coworkers who have lost jobs as a result of ad revenues tumbling in free-fall since late 2004, and made all the more painful because the same companies that are laying off valuable newsroom staff have reportedly paid out millions in salaries and bonuses to corporate top-level execs. But we're getting ahead of ourselves.

A report on — "Goldman Sachs Issues Negative Note on State of the Industry" — is a grim take on the state of newspapers. Not so much for the online state.

"The research firm based the note on several factors including that newspapers clearly no longer dominate classifieds, that margins are under pressure, and that the transition period from print to online will be "painful" and "extended."

E&P reports "analysts estimate that transition will take as long as five years for online revenues to offset deteriorating print revenue." But that once the transition is made, analysts believe "newspaper publishers will re-emerge as very healthy and dominant players in the local media marketplace."

It will be the contributions in time and talent of good people like you, who weather through the "painful, extended" transition with newly developed skills and combined with solid journalistic values, that will ultimately enable the newspaper companies to re-emerge as very healthy and dominate players. And united, you stand a better chance at sharing in the long-awaited profits.

Worth noting: Goldman does not believe recent acquisition transactions (with the exception of News Corp.'s bid for Dow Jones) have been valuable for shareholders. "Our view continues to be that on a long-term basis operating fundamentals will always trump takeover/restructuring speculation," analysts wrote.

We're not analysts, but we suspect they're right.
(end of post)

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