Judge's idea to outlaw links won't save newspapers

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Media corporations dug their own graves

5 years ago newspapers were among the most profitable businesses in the country with enviable 20% returns. But Congress loosened up the government regulations starting under Reagan's reign, and more and more newspapers were bought up by people interested in this lucrative industry. A lot of debt was acquired and often, as in the case of the LA Times, the purchase price was often almost double the market's valuation of the companies.

To pay off the debt the new owners proceeding to cut costs and the only costs they could really cut were those associated with producing the news content for the papers. They turned to buying canned national news from the wire services and cut their local reporting staff by 75%.

Dozens of pages of what had been content were replaced with more ad inches. A win win situation if the people who bought the newspapers in the past continued to do so. Not surprisingly many people turned to other news sources that provided local content and national news that was not being heavily censored by corporate media owners. With declining readership came declining ad revenues. When Company A continues to downgrade its product until its customers go to a competitor it is not to the credit of the competitor but rather to the greed of the owners of Company A and their disregard for their customers.

Posted by: stenman@...   Posted on: 07/02/09 You are currently: a Guest | Members login | Terms of Use

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