Washington Post Company CEO Don Graham’s candid take on trends in the news business has been a staple of the 10 media conferences I’ve attended each December in New York City.
This year, though, Graham in brief prepared remarks said only that the Post newspaper is “having a good year” and spent the rest of his time defending the company’s much larger Kaplan for-profit education business currently under fire from regulators.
That underscores that the Post, as Graham has said for several years now, remains a special focus of his family’s commitment to journalism but is a little off to the side of what matters most to investors.
Under questioning, Graham said a little more. Impressive cost controls helped the Post, he said, which also increased revenues through nine months, outperforming the industry.
And the Post “is not going to be a pioneer” in paid online content, Graham added, but will be watching closely those who are in 2011.
“We will watch what The New York Times does, what the Times of London does; there are experiments galore going on in pay models in newspapers all around the country,” Graham said. “We’re not going to be pioneers in those experiments but we’ll be watching every one and if somebody knows a better way to operate a newspaper business, we’ll be interested. We’re quite willing to be followers on this front.”
Like the Post, most of the newspaper company presentations have been cut from an hour to a half-hour on stage at the three-day meeting and slotted in the smaller of the conference’s five meeting rooms. And that was not the only signal of the industry’s smaller role in the grand scheme of global media.
The conference, sponsored by investment bank UBS, opened with three forecasts pegging worldwide advertising growth at between 4.5 to 6 percent for the coming year. But except for Western Europe, the U.S. is the slowest growing world market — and newspapers and magazines are the two slowest segments.
The contrast is stark with a company like Discovery Communications, whose cable networks are running at a pretax margin of more than 50 percent and have enormous growth potential internationally.
Newspapers and magazines will need to make their money at home in a climate where share is shifting — not just to Internet alternatives but to the surprisingly muscular broadcast network and cable segments.
That underscores print’s high hopes for tablets and mobile phones. It looks as if most growth will need to come from new delivery options — not untapped markets.
Jeffrey Bewkes, CEO of Time Warner, took that line on the company’s magazine division, last and least in an extended discussion of the company’s many divisions. “I feel better about publishing than I have for years,” he said.
Magazine advertising rallied well in 2010, he said, and Time Warner’s strong titles are taking market share of advertising from others.
But the exciting part is how well magazines work in tablet apps, Bewkes said, which — best case — will yield a material growth spurt after several more years of development.
The tablet not only opens up display of more content and add-ons like video, Bewkes said, “but my magazine can be different from yours.”
It also begins to liberate the business from the high fixed costs of printing and distribution.
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