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Norman Pearlstine, a senior advisor at the Carlyle Group and former editor in chief of Time Inc., spoke at the 2008 Leadership in Media Forum on Wednesday morning about the future of newspapers and magazines.
"There are still plenty of reasons for owning a newspaper," Pearlstine said. "They remain viable business; they can be profitable; but they won't have the kinds of margins that they [had before the Internet]." However the industry is no longer for everyone: "Owning a newspaper is for the rich guy that didn't get a football team," he joked. "When the Internet came along, newspapers had very high margins and very little incentive for innovation," Pearlstine commented. "I think that editors in times of high margins were willing to let advertisers subsidize Pulitzer Prize-winning articles that weren't really of great interest to their readers." The Internet changed the dynamics of the industry. "What some editors thought of as high value, the consumer thought of as a commodity," Pearlstine added. He went on to suggest that newspapers may want to look at micro-pay models that allow them to receive revenues from readers beyond the locals that want the high-value content of papers like The New York Times and The Washington Post. Pearlstine is more optimistic about magazines. "I'm more excited about the future of magazines than I am about newspapers. But I do think that magazines need to reinvent themselves. Part of the problem in the U.S. is that it's hard to launch new magazines." "There are some very healthy magazines out there. The Economist has had a 50% increase in circulation in the last five years," he continued. "One of the things we're going to find with the flight of advertising to the Internet [is] that there will be a lot of fragmentation," Pearlstein said. "I think, aside from big television events, it's going to be hard to reach as large an audience as you'll be able to with a magazine. That's a competitive advantage for magazines." - George White Categories Deal Video
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