A tale of two industries: newspapers and automobiles

The crisis facing the newspaper industry is like the one facing the automobile industry, writes Alan Mutter. The difference is that newspapers, unlike General Motors, can adapt the products they produce and abandon their outdated, expensive and hard-to-sustain business model.

Companies like General Motors will continue to struggle as long as their mission is to build cars, Mutter writes.

Unless GM goes into some entirely different business, it always will be a capital-intensive, 19th Century-style manufacturing company. GM never can escape the need to operate big-ticket, dedicated manufacturing facilities that cost as much to own if the company builds a thousand cars as if it builds millions.

...

Unlike GM, publishers are approaching the day when they will have the opportunity – and perhaps no other choice – to exit the anachronistic manufacturing business that is eating most of them alive.

While their production and distribution practices may not be cutting edge, newspapers hold advantages in other areas, Mutter says. It's hard to beat the brand recognition that newspapers have, and few challengers are as well situated as newspapers to know a community and sell ads to it.

What newspapers need to do, Mutter says, is build on those strengths before they fade away. (Feel free to apply that last prepositional phrase to either newspapers or strengths.)

To gain full advantage of the resources remaining at newspapers after the recent years of extreme cost cutting, many publishers are going to have to face the emotionally difficult decision to cut back on their daily print schedules.

By producing a limited number of premium-priced, niche publications on only the days when it is profitable to do so, publishers can begin to focus more of their attention and resources on creating the wide array of tightly targeted Internet and mobile products that represent the future for their franchises.

In all, I support the idea of printing niche publications on only the profitable ad days, but I'm left wondering just how long that model will last. Eventually, three-day-per-week newspapers will become common. Then those papers will start to lose money and one or two of the days will stand out as more valuable, so the paper will cut back further and further until it doesn't publish at all (on paper) anymore.

In other words, in a world where daily newspapers are rare, how long will Thursdays, Fridays and Saturdays continue to be profitable days on which to print?

Related posts:

1. How long can print newspapers last?
2. Richards: “Print newspapers will never thrive again”
3. Self-flagellation
4. Pew Report: Most Americans wouldn’t care much if their local newspapers disappeared
5. Digital Newspapers