There’s not much to like about the prospects for “old school” publishers like newspapers and magazines these days.
With the internet giving legs to anyone with something to write, blogging platforms like WordPress that enable you to get started at almost no cost, and search engines like Google sending readers your way, I can’t see a way that traditional publishers are going to escape this barrage without drastically changing their business models. I don’t think most will be able to.
Take, for example, this blog (which I thank you for reading). Ten or fifteen years ago, our sources for investment coverage were limited to the usual print suspects – The Wall Street Journal, Financial Times, etc – all the stuff everyone else was reading. Then some internet financial sites began popping up – some run by the big guys, like CNNMoney, and some by small guys, like The Motley Fool.
Today, there are a TON of small sites and blogs, run by money managers, independent writers, and armchair musers like myself. The variety of choice we have as a consumer of financial information is awesome. It’s all free – as long as you don’t mind some banner ads and newsletter pitches (which I think most people are OK with).
So an old school publisher like Gannett, you’d have to think, is going to be in a world of trouble when faced with this surge of free information. Sure there’s a lot of crap, but there’s also some good stuff being produced at a price of zero.
And trouble looks to be the case, writes our friend Brian Hunt in his excellent DailyWealth Market Notes column:
In just the past few years, Porter has nailed the bankruptcy of General Motors,Freddie Mac, and Fannie Mae. Porter targets businesses with declining revenues, obsolete business models, and big debt loads – businesses like USA Todaypublisher Gannett (GCI). Porter notes the newspaper publisher competes in a low-margin business that is suffering declining revenues… all the while trying to service a huge debt load.As you can see from today’s chart, the market likes Porter’s thesis. After surging 800% off its March 2009 panic bottom, Gannett now sports the chart of a rocket that has run out of fuel. The stock has sputtered from $18 per share to $13 in the past four months. It just broke down to its lowest low in six months on massive selling volume. Trend followers, here’s one to play on the downside…
Related reading: What the dollar’s recent upturn means for stocks, commodities, and gold