Warren Buffett's Berkshire Hathaway, Inc has announced it is purchasing 26 local papers, all locals. In a letter to the publishers, Buffett said that the papers would need to focus as much as possible on local issues rather than try to compete on national ones. More interestingly, Buffett weighed in on the perennial issue of whether newspapers can give away their news online:
"We must rethink the industry's initial response to the Internet. The original instinct of newspapers then was to offer free in digital form what they were charging for in print. This is an unsustainable model and certain of our papers are already making progress in moving to something that makes more sense. We want your best thinking as we work out the blend of digital and print that will attract both the audience and the revenue we need."
That could mean that Buffett is considering the same sort of paywalls that the New York Times switched to and that Gannett, Co. will turn on soon (excepting USA Today). Even if Berkshire's new papers go in that direction, Buffett doesn't expect them to "move the needle in terms of Berkshire's economic value." So while he clearly believes that newspapers have a future, it won't be one where they bring in significant profits.
Meanwhile, Advance Publications has announced that it is switching some of its newspapers to a thrice-weekly deliver schedule (on Wednesdays, Fridays, and Sundays) while it cuts staff and attempts to beef up its online offerings. The affected papers include New Orlean's Times-Picayune and three (former) dailies in Alabama. Advance is putting a positive spin on the news, saying, "NOLA Media Group will significantly increase its online news-gathering efforts 24 hours a day, seven days a week." That positive spin is belied by job cuts and concern that the promises of increased news gathering won't be met, as John McQuaid of Forbes points out.
Advance Publications, which plans on making the transition this fall, is obviously struggling with the same issues that Buffett points out, "details of the new digitally focused company are still being worked out, but the transition will be difficult." Given the decline in daily newspaper profits, it's hard to argue with that.