The Sky Is Falling on Most Media Profit Margins; Still Reporting and Editing Ranks Get Thinner and Reasons to Watch and Read Become Fewer
Even if you're not a regular Romenesko reader, you know there's been a contagion of cutbacks at newspapers, TV and radio stations in both content and personnel.
Ostensibly, all of this is being done to slow a decline in revenues and audience. At the same time, you're led to believe that declines equate to red ink, thereby making all this bloodletting more justifiable. Not so, in most cases.
The top newspaper analyst, John Morton, points out in American Journalism Review that publicly traded newspaper companies still have an average profit margin of 17 percent. True, that's less than they used to have when their media hegemony could bring home a lot more bacon, but most corporations in other sectors can only lust after such returns.
The situation is even better at local TV stations, which are also not as fat and happy. But that means profit margins are merely in the 20s. Sob. Still, that's enough for the CBS-owned stations, where dozens of high-profile anchors and reporters have been let go to save money. Penny-pinching is also evident behind-the-scenes, reports The Los Angeles Times.
In a report released in July, the Writers Guild of America, East, reported that CBS and ABC news writers said recent workforce cutbacks had led to fewer investigative stories, less fact checking and an increased use of promotional video news releases at their news outlets.
The bottom line, says Morton, is get used to a new bottom line.
You can still make money, just not as much as you're used to. You won't get back to where you were, and you shouldn't even try by cutting staff and content, thereby reducing an already-shrunken value proposition to watch and read.
It's a point I've harped on repeatedly while following the travails of the likes of Dean Singleton, Brian Tierney and Sam Zell.
No doubt, debt service is a bitch for all of them, but so is the prospect of a rotting husk where a newspaper once stood.