{"id":90715,"date":"2007-04-09T00:00:01","date_gmt":"2007-04-09T05:00:01","guid":{"rendered":"https:\/\/beta.pewresearch.org\/pewresearch-org\/2007\/04\/09\/a-veteran-newspaper-watcher-worries-and-wonders\/"},"modified":"2024-04-14T04:16:30","modified_gmt":"2024-04-14T09:16:30","slug":"a-veteran-newspaper-watcher-worries-and-wonders","status":"publish","type":"post","link":"https:\/\/beta.pewresearch.org\/pewresearch-org\/journalism\/2007\/04\/09\/a-veteran-newspaper-watcher-worries-and-wonders\/","title":{"rendered":"A Veteran Newspaper Watcher Worries and Wonders"},"content":{"rendered":"

For the past 30 years, newspaper industry analyst John Morton and his influential newsletter have been something of an oracle for the world of newsprint \u2013 covering where the industry is and where it\u2019s headed. Now, having decided to end the newsletter\u2019s long run, he has ominous words\u2014mixed with a few suggestions\u2014about the future.<\/p>\n\n

\u201cI\u2019m usually a glass half-empty kind of guy,\u201d Morton said in a phone interview with PEJ. \u201cI think the newspaper industry will have a tough next decade \u2013 tougher than the previous 10 years. If newspapers keep cutting staff and their news hole, I\u2019m pessimistic.\u201d<\/p>\n\n

\u201cBut if they decide they still gather something important to people, something valuable that people want,\u201d he added, \u201cI\u2019m more optimistic.\u201d<\/p>\n\n

\"\"<\/figure>\n\n

On March 20 Morton and economist Miles Groves, the other half of the Morton-Groves Newspaper Newsletter, announced they would cease publishing their monthly analysis that has long-been a must-read for owners, publishers and investors. Morton says a combination of factors, but particularly a diminishing subscribers base, led him to that decision.<\/p>\n\n

\u201cWhat we were getting out of it simply wasn\u2019t worth what we were putting into it,\u201d he said, with a chuckle. \u201cWe decided the hell with it.\u201d<\/p>\n\n

That doesn\u2019t mean Morton will be abandoning any of his deeply-held views about newspaper publishing. He sees two key missions for the nation\u2019s dailies in the next few years. They need to invest in news gathering to make themselves more vital resources in their communities. And they need to convert more of their operations online as quickly as possible in order to reduce the burdensome costs of newsprint, printing, and delivery.<\/p>\n\n

Morton also offered some context for the economic woes afflicting a business that has witnessed the breakup of some of its major publicly owned chains.<\/p>\n\n

\u201cThis is still a profitable industry,\u201d he told PEJ. \u201cPublicly reporting companies last year showed profit margins of almost 18%. There are some industries that can only dream of delivering a profit margin like that.\u201d<\/p>\n\n

Analyzing the health of the newspaper industry has been John Morton\u2019s line of work since 1971. But he\u2019s been involved in the journalism business since 1960, when he began as a general assignment reporter for the Binghamton Press in New York State.<\/p>\n\n

After stints at other papers and a brief foray on the broadcast side, he fell into newspaper industry analysis by happenstance. Morton, who had been working at Washington public television station WETA on its local \u201cNewsroom\u201d program, found himself in need of a job when the station ended the show\u2019s run.<\/p>\n\n

He got a call and a proposition from Lee Dirks, who had become one of the nation\u2019s first newspaper stock analysts in the late-1960s as newspaper companies began trading publicly.<\/p>\n\n

\u201cLee told me all these companies are going public and no one knows anything about them. Let\u2019s cover them and offer analysis and charge them. I figured I try it for a few months,\u201d Morton said.<\/p>\n\n

\u201cIt wasn\u2019t just a strong industry \u2013 it\u2019s still a strong industry today \u2013 it was a growing industry. One of Gannett\u2019s phrases back then was \u2018never a down quarter.\u2019\u201d<\/p>\n\n

Morton stayed on Wall Street for more than 20 years working as a registered representative of several big firms before finally leaving in the mid-90\u2019s to continue his work as an independent analyst \u2013 removing the official affiliation his company had with any big brokerage house.<\/p>\n\n

Morton said the stock market\u2019s attitude toward newspapers has changed dramatically since he began his career\u2014and in fact, helped drive him away.<\/p>\n\n

\u201cI left because as time wore on, the people on the street were less interested in an analyst like me,\u201d Morton said. \u201cThey didn\u2019t care about what was going to happen five or 10 years down the road. They wanted to know about the next quarter for each company.\u201d<\/p>\n\n

In his role as a newspaper consultant, Morton has also written a regular column for the American Journalism Review since 1981. And he\u2019s become a key source for media reporters covering the economic health of the newspaper industry. One message he has frequently stressed was that the business was producing enviable profit margin despite Wall Street\u2019s lack of enthusiasm.<\/p>\n\n

Still, Morton acknowledged that those current 18% margins are down from about 22% a few years ago and there are problems on the horizon. He is particularly skeptical about whether newspapers will use the move to the Web to broaden their coverage and appeal or as an excuse to shrink their newsroom.<\/p>\n\n

Morton said the online world poses the greatest challenges and offers the best opportunities for the industry.<\/p>\n\n

\u201cIt has thrust the growing part of the business into a highly competitive environment,\u201d he said. \u201cThe new markets on the Web, things like auctions, can completely avoid ads altogether.\u201d<\/p>\n\n

Morton holds that if newspapers use the Web the right way, it could be of great benefit. \u201cI\u2019ve seen the P and Ls (profit and loss statements) of some news sites. Their margins are up over 50% in some cases,\u201d he said.<\/p>\n\n

There are real savings to be had for newspaper if they can move more and more of their publication online. If an advertiser shifts a dollar of spending in the local paper to only .40 cents online, the math can still work for newspapers, Morton said, but only with reductions in printing and delivery costs.<\/p>\n\n

The key for the industry, he stressed, is how the parent companies handle their online revenues \u2013 whether they use them to bump up profit margins or invest in reporting resources.<\/p>\n\n

That\u2019s a situation that Morton will now watch closely from semi-retirement.<\/p>\n\n

\u201cI still have my consulting business, which keeps me busier than I’d like to be,\u201d he said. But at least now I won’t have the distraction of having to produce the newsletter every month.\u201d<\/p>","protected":false},"excerpt":{"rendered":"

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