Hearst Again with ‘Sell or Close’

picture-111Just a month or so ago Hearst threatened to “sell or close” the Seattle PI. Now it’s doing the same with a larger market paper the SF Chronicle. Here’s the Chronicle’s own article about the subject:

In a posted statement, Hearst said if the savings cannot be accomplished “quickly” the company will seek a buyer, and if none comes forward, it will close the Chronicle. The Chronicle lost more than $50 million in 2008 and is on a pace to lose more than that this year, Hearst said.

Frank J. Vega, chairman and publisher of the Chronicle, said, “It’s just a fact of life that we need to live within our means as a newspaper – and we have not for years.”

The paper’s website could operate as a stand-alone local destination and be quite successful if it made some improvements. However gone would be much of the local “journalism” that I celebrated yesterday.

The statement above about “living within our means” is a simplistic one. While there’s truth there there are range of external forces at play. Still the newspapers were very slow to respond to the changing environment around them.

Now it’s time to ask people to pay for online content or let the “free markets” take their toll. And right now the free markets are in free fall.


6 Responses to “Hearst Again with ‘Sell or Close’”

  1. David Mihm Says:

    Greg, were you still around SMX West for John Battelle’s keynote on the last day?

    I found his discussion of newspapers fascinating–I hope I am paraphrasing properly–that most of them would succeed today or in the near future if they shut off their printing presses and stopped delivering paper, and just paid journalists to write. That their ad revenues online would be enough to compensate the staff writers, without going to a subscription model. The problem is they’ve committed too many resources for too long into keeping the print business afloat and neglected their online strategy. The Chronicle seems like it’s finally seeing the light…?

  2. MiriamEllis Says:

    It’s really hard to imagine the Chronicle shutting down, isn’t it, Greg? Gee…

    It’s tough, sometimes, to adjust to how things changed. We don’t subscribe to a print paper, relying on the web for such news as we’d like to read, but it’s strange to think of all of the people who rely on their morning paper having nothing to read at the breakfast table.

  3. Greg Sterling Says:

    The papers need to develop “plastic paper” (kindle lite) and then they’ll be able to charge a subscription again.


  4. Greg Sterling Says:

    I didn’t see it. This in a way is a simplistic argument. There’s a longer response I don’t immediately have time for.

  5. David Mihm Says:

    Greg, I’d love to see a full blog post with your thoughts when you get the chance. Although this has fairly slight relevance to my actual line of business I just find the whole topic fascinating.

    (I should also say that I’m fully aware John’s company has a vested interested in seeing newspapers move to a pure online model.)

  6. Greg Sterling Says:

    There are several issues:

    Audience reach
    Fixed costs/burn rate

    I don’t have enough insight into the hard costs of the business to argue that point.

    Maybe I’ll devote some thinking to the topic. Thanks David

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