I heard Randy Komisar, one of the new partners at VC firm Kleiner Perkins Caufield & Byers, speak to business students at U.C. Berkeley yesterday. To my surprise, one of the students asked him what he thought about the newspaper industry. I was intrigued by his answer (partly for selfish reasons, I confess).
Komisar said he doesn't think newspapers' biggest problem right now is competition from the Internet (this from a guy whose firm was one of the lead investors in Google). Rather, it's the cutbacks in newsrooms. "Newspaper companies may have picked the absolute wrong time to under-invest in journalism," he said. At a time when newspapers are battling new online competitors for readers and advertisers, the last thing they can afford to do is offer a mediocre product. Readers will simply go elsewhere, and many are. (The same goes for print magazines, by the way.)
We've heard it before, but it bears repeating. In a drive for short-term profits, print publishers continue to bleed the quality out of their publications instead of earning long-term loyalty from readers and advertisers by funding groundbreaking journalism, which requires talent, time, and resources. What's more, the newsroom cutbacks aren't having their intended short-term effect. This week, three big newspaper companies--The New York Times Co., McClatchy, and Tribune Media--reported declines in quarterly earnings.
Komisar said there are plenty of mediocre newspapers that won't be missed if they die off but also some good ones that provide a genuine service to their readers. If these papers are to survive, they will have to provide better quality reporting and writing than online competitors, which will only continue to improve. It was refreshing to hear this from someone who has no financial interest (that I know of) in print publishing and plenty of interest in its supposed rivals.