Why do we buy newspapers?

there may be two reasons that confuse you. First, in previous letters to shareholders and annual reports, I have told you that the circulation, advertising and profits of the newspaper industry will definitely decline, and this prediction remains unchanged. Second, the assets we bought are far from meeting the required scale standards. We can easily explain the second point. Charlie and I love newspapers. If their economic value is reasonable, we will buy them, even if they are far from our size threshold. As for the first point, I need to provide a more detailed explanation, including some history. News, in short, is what people don't know but want to know. People will look for news that is important to them from various channels, which provides a perfect combination of timeliness, accessibility, high credibility, comprehensiveness and low cost. The relative importance of these factors varies from person to person, and varies with different news types. Before television and the Internet, newspapers were the main source of a lot of news and were indispensable to the vast majority of people. Whether you are interested in international news, domestic news, regional news, sports news or financial news, newspapers are often the first to tell you the latest information. Indeed, the newspaper you bought contains so much information that you want to know, even if only a few pages meet your interests, it will make you feel very valuable. Even better, advertisers usually pay for the cost of all these pages, and readers get benefits. In addition, advertisements themselves provide information that is of great interest to a large number of readers, so that more "news" will be generated. For many readers, knowing which departments and positions are recruiting, which supermarkets are promoting sales, and when and where movies are shown is far more important than the editorial opinions written by editors. Conversely, regional newspapers are indispensable to advertisers. If Sears and Safeway open a store in Omaha, they need a megaphone to tell city residents why they should visit their stores today. Big department stores and grocery stores are scrambling to put out big advertisements because they know that the advertised goods will fly off the shelves. No other loudspeaker can compare with newspapers, so advertisements can sell themselves. As long as a newspaper is the only newspaper in its community, its profits are bound to be very good, no matter whether it is well managed or not. As a southern publisher said, my proud social status is attributed to two great American systems-nepotism and monopoly. Over the years, almost all cities have become only one newspaper (or two competitive newspapers have merged into one to operate). The reduction of such newspapers is inevitable, because people want to subscribe to only one newspaper. But when competition exists, newspapers with obvious advantages in circulation will naturally get the most advertisements. This will lead to a virtuous circle in which advertisements attract readers and readers attract advertisements. This birth process will lead to the death of weak newspapers, which is called "fat people survive". Nowadays, the world has changed. The stock market and the information of national competitions became old news before the news began to be published. The Internet provides a wide range of information about work and family. Television bombards viewers with all kinds of political, regional and international news. In one field after another, newspapers have lost their primacy. When their audience decreased, so did their advertisements. ("Staff Recruitment" advertising revenue-once a major source of income for newspapers, has dropped by 9% in the past 12 years. However, newspapers continue to dominate the community news. If you want to know what is happening in your town, whether the news is about the mayor or taxes or college football, there is no substitute for the regional newspaper to do it. A reader's eyes may, after reading two paragraphs about Canada's tariffs or Pakistan's political development, move away and read stories about himself and his neighbors until the end. There is a sense of community everywhere, and newspapers that provide special information needed by the community will be indispensable for most residents. However, even a valuable product will destroy itself because of a wrong business strategy. In the past ten years, this process has happened in almost all newspapers with a certain scale. Publishers have provided newspapers for free on the Internet. How can this not lead to a sharp drop in the sales of printed newspapers? The declining circulation has caused newspapers to become less and less important to advertisers. In this case, the "virtuous circle" of the past has been reversed. The Wall Street Journal has long operated in a paid mode. The model of regional newspapers is the Arkansas Democratic Bulletin, and the publisher is Walter? Horsman and Walter have long adopted a payment model. In the past ten years, its circulation has far exceeded that of any large newspaper in the United States. Even with Walter's example, it was only last year that other newspapers, including Berkshire's, began to develop payment models. No matter how this model works-the answer is not clear, and it will be widely copied. Charlie and I believe that newspapers deliver comprehensive and reliable information to close communities, and with wise internet strategies, newspapers will remain competitive for a long time. We don't think that reducing news content or changing the frequency of publication will succeed. In fact, few news reports will definitely lead to few readers. At present, some town newspapers adopt the method of non-daily publication, which may increase profits in the short term and will inevitably reduce the practicality of newspapers in the long run. Our goal is to keep our newspaper publishing the content that readers are interested in, and to make readers who think we are valuable pay appropriately, whether it is a physical newspaper or an online newspaper. Our newspaper is also facing the pressure of declining operating income. In 212, the operating income of our smallest six newspapers remained unchanged, which was far better than that of daily newspapers in big cities. In addition, the operating income of our two largest newspapers, Buffalo News and Omaha World Newsletter, dropped by 3%, which was also above average. Among the 5 largest city newspapers in the United States, they rank near the top in terms of circulation penetration in their region. Berkshire's cash flow from newspapers will continue to decline. Even a wise Internet strategy cannot avoid moderate corruption. However, in terms of cost, I believe these newspapers will meet or exceed our acquisition goals. The results will support this belief. Charlie and I will not continue to run a business that is doomed to continue to lose money.