There are two schools of thought on the declining newspaper business:
- The sane one, which sees the absurdity of the dead-tree-printing-and-distribution business, the challenge of transitioning from a fat-profit print world to a lean-profit digital world, and the irrelevance of day-old “news,” and
- The nutty one which thinks the awful performance of leading newspaper companies over the past few years is just the result of the housing bust.
CSFB’s newspaper analyst John Klim appears to be a card-carrying member of the nutbag school. He argues that newspapers’ recent troubles are mostly cyclical (2/3) and that newspapers are in a great position to benefit from the transition to digital media.
All newspapers have to do, Klim says, is “transform themselves from lumbering dinosaurs into nimble, multiplatform information providers capable of reaching customers in print, online, or by mobile download.” That’s not quite all they have to do–they also have to wean themselves of print’s fat profits, manage irate labour unions, and get tens of million of new users who already get much of their news elsewhere–but Klim tosses this transition off as though it’s the equivalent of losing 2 pounds.
Klim has at least ensured that he and CSFB’s investment bankers will be hailed as heroes in the offices of newspaper investors and executives everywhere, and newspaper stocks rose on his call. Alas, he has also ensured that other observers of the newspaper business will conclude that he’s a wack job.
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