OBS News

The Rise of the Local Newspaper – Online

While digital subscriptions to online magazines have soared in the past year – the fall 2012 Survey of the American Consumer, conducted by research group Growth from Knowledge (GfK), reports increases of nearly 50% for online magazine subscriptions – major newspapers such as the New York and Los Angeles times are reporting losses in digital subscription revenues. One survey of U.S. newspapers showed losses of $7 in print advertising for every $1 gained in digital advertising.

While major newspapers struggle, recent investments made by media giant Warren Buffett suggest that there is still hope for the small, community newspaper. “In a very general way, strong interest in community affairs varies inversely with population size and directly with the number of years a community’s population has been in residence,” Buffett writes in a letter to his editors and publishers. “Therefore, we will focus on small and mid-sized papers in long-established communities.” This letter comes on the heels of Buffett’s recent purchase of several small to mid-size newspapers in the U.S.

Buffett maintains that the business model many newspapers have recently undertaken – giving away selected content for free online while charging full price for the print version – is unsustainable. While he does not offer any specific solutions to this problem, his purchase of these newspapers, together with the tangible shift in media consumption from print to digital, suggest that the online newspaper is indeed more viable in small, dedicated communities instead of on a national or global scale.

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