Chinese Businessman Seeking Stake in New York Times? Why?

In 2012, newspapers lost $16 in print ads for every $1 earned in digital ads. It’s getting worse. In 2011 the ratio was just 10- to -1 according to Pew Research. 

Therefore, I was not surprised to see yesterday’s New York Times, where David Barboza reported:

SHANGHAI — A wealthy Chinese businessman and philanthropist known for his zany public stunts said on Tuesday that he was leading a group of investors seeking to acquire a large or controlling stake in The New York Times Company.

That report caused the Times stock to jump 4% to a 5 year high. So apparently the Wall Street crowd, although they might think Mr. Guangbiao is ‘zany’, sense something.

Yesterday, I posted the 4th in a series entitled ” Chasing the Customer Not the Competition”.  There is a customer driven tectonic shift evolving between brick and mortar retailers and e commerce. The customer is moving – apparently faster than industry management. Therefore, it is critical that retailers follow the consumer, not the competition in my opinion. A similar shift is taking place in the media space. The Newspaper industry is in the cross hairs of change too. Apparently both the retail industry and the newspaper industry are caught in the same customer change driven vortex.

Therefore, thought I would also examine the newspaper industry. Retail and Print are in many ways similar. Not exactly, but nonetheless both have similar customer issues.

Newspapers depend upon three levers that manage their P&L. 1. Advertising Revenue 2. Subscriptions 3. Expense Control. Over the series, we’ll look at all three in-depth, but , today, consider what has happened to Advertising Revenue: Since 2003, print ad revenue has collapsed from $45 billion to $ 19 billion. Newspaper online digital ads (the highly touted industry revenue salvation) have only grown from $1.2 billion to $3.3 billion.

What are the prospects for the traditional Newspaper Business?  We’ll explore in subsequent posts. Being an old grocery guy … we’ll let numbers do the talking.

Comments welcome!

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