Enlightened Conflict

Tag Archives: profitability

A thought on the death of Paper Part 1: Newspapers

February 2nd, 2010

Are newspapers dying? Despite all the bad press, no. (I will explain later)

Could they restructure to become more viable long term and increase profits? Yes.

How?

1. Restructure printing production schedules and issue newspapers for three days a week (let’s say Wednesday-Friday-Sunday).

2. Charge to access content online.

Yup. That simple. (and I will get back to those two)

Newspapers just aren’t as bad off as people want to make them out to be.

First. Most papers are pretty healthy. The problem is they are owned by corporations demanding 30% profit margins. If they don’t, it is often more profitable to divest what is typically some valuable real estate and shut paper down. Smaller papers with ownership content with comfortable but not exorbitant profits are doing just fine. Maybe newspapers need to reevaluate profit goals.

Second. The source of revenue. I believe it was just last year NY Times circulation revenue topped advertising revenue for the first time in a very very long time. Once again. That is ok. Just a different revenue model. It’s been done once before (like when newspapers first came into existence and the first 100+ years of their existence).

Third. High ad revenue is a relatively recent phenomenon. For rounding sake let’s say for the first 125 years or so circulation revenue drove the newspaper industry (don’t worry. I am not gonna get stuck on printed paper. Just going through successful models that would apply to digital news also. Uh. Paid circulation). There is no reason why today’s newspapers cannot go back to the original “circulation revenue” model and live with less ad revenue.

Fourth. Government support. Hmmmmmmmmmmmmmmmmmmmm…what do I mean by that? Tax breaks on production expenses and a favorable mail rate. Both those things lower expenses pretty significantly and then the news reporting infrastructure can go back to focusing on generating responsible news.

Ok. Here we go. So why I believe it’s easy. Because newspapers actually control professional news output. Simplistically they own the network of news gathering and fact finding and responsible reporting.

Unfortunately the simple solution (those two little things I listed upfront) carries with it a lot of complex maneuvering and actions.

The first is simply a choice they need to do or don’t do. But it would be silly to not do it. They would minimize print production expenses, maximize circulation days, probably be flat with existing ad revenues (when it is all said and done) and maintain readership.

The second simple thing to do is a little trickier.

My Thoughts on the Healthcare Debate

December 8th, 2009

I love all the letters to the editor, the newspaper articles, the discussion & debate and ultimately the fact we are publicly addressing a “broken” national program – the US healthcare system.

Three themes seem to dominate the discussion.

Change is scary.

While I would like to believe there is such heated debate over healthcare because people would like to do what is right, I tend to believe a lot of the rhetoric surrounds fear of change. Within all the discussion there is certainly a strong thread of “I don’t know what it should look like but I know what I don’t want it to look like.” Sometimes that type of discussion freezes people into inaction.

I am certainly not proposing being hasty or thoughtless (and if anyone truly believes the policy isn’t being discussed seriously and well thought out…well…they are crazy) but at some point we need to stop talking and start doing. The current system is flawed. Any system we end up putting in place will have some flaws (just less than the one we have, one should believe) but…does it have to be perfect? Absolutely not. I realize perfection is impractical (if we want to fix the current state at least within the next millennium).

Profitability.

Senator Jay Rockefeller D-WVa “the insurance companies in my judgment are determined to protect their profits.” I have seen or heard derivations of this thought throughout the healthcare debate – from the public as well as the government. Okay people.

First. They are a business. In a competitive marketplace. Their purpose is to make a profit (or a not for profit company). Unless mandated otherwise they are permitted to make a profit (and people can elect a different choice if they don’t like it). Okay. I know I made a sweeping point with a lot of debatable aspects but since when has a business in a competitive marketplace been restricted on profitability? Second. Anyone who knows anything about healthcare finances and managing “risk to insure everyone receives coverage in the event of a catastrophe” is a tricky proposition. Suffice it to say I would rather they make some money rather than not have enough money if a catastrophe happens.

Third. Re-investing profits back into the business. Interestingly most healthcare companies have excellent programs developed and available. And if people used these programs the company may actually be a little less profitable, charge less and, best of all, there would be a healthier population.

Enlightened Conflict